Central Port Authorities Bill 2016

  • It will replace more than the five-decade-old Major Port Trust Act 1963
  • It will enable port authorities to function like a corporate entity
  • It is in draft mode
Key proposals in draft:
  • Reduce the extent of litigation between Public Private Partnership operators and Ports.
  • Set up an independent Review Board to carry out the residual function of the erstwhile Tariff Authority for Major Ports (TAMP) for major ports and to look into disputes between ports and PPP concessionaries.
  • The board will also review stressed PPP projects and suggest measures to review stressed PPP projects. At present, there is no independent body to look into these aspects.
  • The draft bill has also proposed a simplified structure for the board by bringing it down to nine members. The board will include three to four independent members instead of the 17-19 under the Port Trust model.
  • Provisions have been made for inclusion of three functional heads of major ports as members in the board apart from a Government nominee member and a labour nominee member.
  • The disqualification of the appointment of the Board members, their duties and provision of the meetings of the Board through video conferencing etc., have been introduced on the lines of Companies Act, 2013, as has been the concept of internal audit.
  • The Board of Port Authority has been empowered to raise loans and issue security for capital expenditure and working capital requirements.
  • The need for Government approval for raising loans, appointment of consultants, execution of contracts and creation of service posts has been dispensed with.
  • A distinction has been made between the usage of land for port and non-port related activities in terms of approval of leases. The Port Authorities are empowered to lease land for port-related use for up to 40 years and for non-port related use up to 20 years, beyond which the approval of the Central Government is required.
Critical Appraisal:
  1. Government control prevails instead of a market driven policy
    • Rates at each of the major ports will be decided by the board of the respective port authorities or a committee formed by the board based on some tariff policy/guidelines.
    • The central government, will have the right to frame rules for, or to issue directions to, every port authority either individually or collectively in matters related to (among others) fixation and implementation of rates.
    • The rates set by a board-appointed panel will have to be ratified by the board prior to implementation.
  2. Unfair Competition
    • Another loophole or drawback in the bill is that the port authorities will also be tasked with setting rates for private facilities.
    • This will lead to unfair competition and a lack of a level-playing field because these ports also run cargo terminals that compete with private facilities therein.



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