Deregulation of Tariff for PPP projects at major ports by government

New guidelines for PPP projects to charge tariffs as per the current market conditions have been issued by the government

December 23, 2021

TAMP exempted from the new guidelines announced by the government.

New guidelines say that PPP concessionaires need to set tariffs as per market dynamics.

The trans-shipment will be 1 time that the usual 1.5 times per container.

For coastal cargo, the payable fee will be 40% rather than the usual 60%.

New tariff guidelines have been announced for public private participation projects (PPP) at major ports in India by the Shipping Ministry. Subject to the reform initiative, the shipping sector works towards deregulation of tariffs and taxes for PPP projects at these ports, which enables a fair field between the PPP decision makers and the private ports. 

TAMP also known as Tariff Authority for Major Ports has been exempted as per the new guidelines. As per the new Major Port Authority Act, 2021, the new guidelines announced that the concessionaires i.e the decision makers at major ports are to set taxes & tariffs as per market dynamics. These were brought into effect on November 3, 2021, as per the Shipping Ministry. 

Currently, PPP concessionaires manage half of the total traffic handled by the major ports in India. There were also a few constraints concessionaires had to follow guidelines by the TAMP. On the other hand, the private operators and PPPs were free to charge tariffs as per market conditions. With a lot of future PPP projects coming up, these new guidelines will be applicable to these projects. 

Sarbananda Sonowal, the Union Minister for ports, shipping and waterways said that concessions in tariff for trans-shipment and coastal shipping are levied by the government and are mandatory to follow, these will also apply to the upcoming PPP concessionaires. Along with this, the government has also taken the necessary steps to provide concessions to promote trans-shipment and coastal shipping. The trans-shipment (royalty payable) will be one time than the usual 1.5 times for a container. 

For coastal cargo, the concessionaire must pay 40% of the royalty for foreign cargo as compared to the 60% earlier as per the coastal concession policy. The tariffs should also be documented on the website for transparency reasons. These new guidelines will help the market economy sector flourish and enable the major ports to be much more competitive in nature.