Like other sectors of Indian industry that have any degree of government intervention, ports too have to live with the seeming paradox of administered prices and free market competition. Though ports are inching towards gradual corporatisation, this profoundly systemic change does not reflect on user charges so far. The Tariff Authority for Major Ports (Tamp) fixes tariffs for all major ports individually, and the ports have to adhere strictly to these rates. However, private investors can quote below Tamps notified rate. Minor ports too have the freedom to charge lower rates than those fixed by Tamp.
"Regulation should actually supplement and not supplant competition," says an industry source. Though ports agree that the absence of a regulator will lead to monopolistic tendencies given the high entry barriers, they point out that there should be some inherent flexibility in the tariff rates if ports are to be market-driven. For instance, Calcutta Port cannot lower its rates to attract traffic even though its traffic levels are declining steadily. Similarly, P&O at Nhava Sheva has manipulated a 30 per cent rate hike even while JNPT has only been given a 15 per cent rate hike. "Cost plus pricing is what is afflicting consumers in India. The business risk analysis should be done by the ports themselves and the regulator should not meddle in commercial calls," comments an industry expert. Counters ministry of shipping secretary MP Pinto: Earlier, port charges were high as ports passed on their inefficiencies to the users. But Tamp prevents this from happening now. However he admits that the present system hardly ensures a level playing field, forcing a rigid rate structure on major ports.
According to an official from a financial institution, an efficient transport network that connects all ports and cities will foreclose any monopolistic aspirations on the part of ports as can be seen in the case Nhava Sheva and the Chennai Port. Leading shipping lines are opposing P&O's proposal to Tamp seeking permission to revise upwards its rates at both the ports. Shipping companies fear that the new rates will be several times higher.
Meanwhile, the Centre is planning to abolish Tamp and institute in its place an appellate tribunal. Such a move is warranted as the government is amending the Major Port Trusts Act to allow the denotification of all major ports from its purview. This is the first step towards corporatisation of all port trusts as corporate ports don't come under the Act and hence under the jurisdiction of Tamp, remarks Pinto. The appellate tribunal will regulate all ports and terminals irrespective of their ownership - whether private or public.
also see : A
skewed equation
Are our ports ship-shape?
The
other point of view
The
road ahead
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