The Major Port Authorities Act 2021

Why in news?

• Government has announced new tariff guidelines for public private partnership projects (PPP) in major ports, aiming to make them more competitive and market-friendly.

More about the news:

• Under the new regime, private concessionaires at major ports will be able to charge tariff as per market conditions.
• The new tariff guidelines will replace the earlier tariff authority for major ports (TAMP).
• The fresh guidelines are part of the new Major Port Authority Act 2021, which came into effect last month on November 3.

The Major Port Authorities Act:

• The act seeks to provide for regulation, operation and planning of major ports in India and provide greater autonomy to these ports and to vest the administration, control and management of such ports upon the Boards of Major Port Authorities and for matters connected therewith or incidental thereto.
• It replaces the Major Port Trusts Act, 1963.

Aims and Objectives of the Act:

• It aims to promote the expansion of port infrastructure and facilitate trade and commerce
• Its objective is to decentralize the decision making and to infuse professionalism in the governance of major ports
• The act also aims at reorienting the governance model in central ports to landlord port model in line with the successful global practice
• It imparts faster and transparent decision making benefiting the stakeholders and better project execution capability

Application of the Act:

• The Act will apply to the major ports of Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, V.O. Chidambaranar, and Vishakhapatnam.

Major Port Authorities Board:

• Under the 1963 Act, all major ports are managed by the respective Board of Port Trusts that have members appointed by the central government.
• The Act provides for the creation of a Board of Major Port Authority for each major port.  These Boards will replace the existing Port Trusts.  

Composition of Board:

• The Board will comprise of a Chairperson and a deputy Chairperson, both of whom will be appointed by the central government on the recommendation of a selection committee.
• Further, it will include one member each from
  • Respective state governments
  • Railways Ministry
  • Defence Ministry
  • Customs Department.
• The Board will also include two to four independent members, and two members representing the interests of the employees of the Major Port Authority. 

Powers of the Board:

• The Act allows the Board to use its property, assets and funds as deemed fit for the development of the major port.
• The Board can also make rules on:
  • Declaring availability of port assets for port related activities and services
  • Developing infrastructure facilities such as setting up new ports, jetties
  • Providing exemption or remission from payment of any charges on any goods or vessels.
• Fixing of rates:
  • Currently, the Tariff Authority for Major Ports (TAMP), established under the 1963 Act, fixes the scale of rates for assets and services available at ports.
  • Under the act, the Board or committees appointed by the Board will determine these rates.

Financial powers of the Board:

• Under the 1963 Act, the Board has to seek prior sanction of the central government to raise any loan.
• Under the act, to meet its capital and working expenditure requirements, the Board may raise loans from any:
  • Scheduled bank or financial institution within India
  • Any financial institution outside India that is compliant with all the laws.
• However, for loans above 50% of its capital reserves, the Board will require prior sanction of the central government. 

Corporate Social Responsibility:

• The act provides that the Board may use its funds for providing social benefits. This includes development of infrastructure in areas such as education, health, housing, and skill development.
• These benefits could be provided for the Board’s employees, customers, business partners, local communities, environment and the society at large.

Public Private Partnership (PPP) projects:

• The act defines PPP projects as projects taken up through a concession contract by the Board.
• For such projects, the Board may fix the tariff for the initial bidding purposes.
• The appointed concessionaire will be free to fix the actual tariffs based on market conditions, and other conditions as may be notified.
• The revenue share in such projects will be on the basis of the specific concession agreement.

Adjudicatory Board:

• The act provides for the constitution of an Adjudicatory Board by the central government.
• This Board will replace the existing Tariff Authority for Major Ports constituted under the 1963 Act.
• It will consist of a Presiding Officer and two members, as appointed by the central government.
• Functions of the Adjudicatory Board will include:
  • Certain functions being carried out by the Tariff Authority for Major Ports
  • Adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires
  • Reviewing stressed PPP projects. 

PRELIMS QUESTION

Which of the following statements is/are correct regarding ‘Major Port Authorities Act’?

1. The Act provides for the creation of a Board of Major Port Authority for each major port

2. The Act empowers Board of Major Port Authority to fix the scale of rates for assets and services available at ports

Select the correct answer using the codes given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer