Non-major ports too may come under TAMP jurisdiction

Non-major ports too may come under TAMP jurisdiction

...may not be allowed to wean away Major Ports’ cargo with lower tariffs

Some of the thriving small ports may be halted in their tracks from becoming a runaway success!

The Shipping Ministry is reportedly planning to bring even the 187 non-major ports in the country—a few of them with capacities larger than some of the Major Ports—under the jurisdiction of the Tariff Authority for Major Ports (TAMP).

This move is expected to reduce the ability of a number of these smaller ports to attract cargo from Major Ports, because the TAMP regulation may well deprive them of the freedom to fix competitive tariffs.

At present, TAMP regulates tariffs of only Major Ports.

"We are in the process of regulating the tariffs of all those non-major ports that are engaged in export and import activities in the first phase. There are 43 such cases. Gradually, we will regulate the tariffs of other non-major ports too. Their regulations will be done through TAMP," a Shipping Ministry official indicated.

Several rounds of discussions in this connection have already taken place, he admitted.

Under the Constitution, only the Union government can build and administer Major Ports, but nowhere does it define the size of a Major or minor port. State governments govern their intermediate and minor ports.

Gujarat had taken advantage of this policy loophole and set up several ports, both in the public and private sectors. Many of them have grown bigger than the so-called Major Ports in terms of cargoes handled. Mundra Port & Special Economic Zone, Gujarat Pipa-vav Port Ltd, Porbandar and Sikka are among the largest in the non-major category.

As per estimates, the port sector, at present, handles 733 million tonnes of cargo throughput every year and the minor ports account for 35 per cent of this.

Gujarat’s Sikka was the country’s top port in 2004-05 and currently occupies second position in terms of volumes after Visakhapatnam Port! Gujarat has as many as 40 intermediate and minor ports along its 1,600-km coastline.

The proposal to regulate the tariffs of non-major ports was reportedly suggested by some Major Ports that were losing cargoes because of their high tariffs to smaller ports.

"Major Ports cannot match the low tariff charged by minor ports as they cannot go lower than the tariff set by TAMP. The tariff cannot be matched even though TAMP allows the Ports to give rebates. This is because the Ports have to share the revenue based on TAMP’s tariff," another official in the Ministry explained.

At a meeting of the Maritime State Development Council two years ago, the Union government had raised concerns over the non-major ports’ freedom to fix tariffs. "At that time, we had told them that we have our own regulatory mechanism and they were convinced.

"Other states like Maharashtra also have a similar mechanism and don’t need the Centre’s control over its ports. If there is such interference by the Centre, how would the ports recover the huge investments they have made?" asked a Gujarat Maritime Board (GMB) official.

TAMP feels that regulating the tariffs of non-major ports may be a long-drawn process as states were sure to oppose the move.

TAMP member, Mr Arvind Kumar, however, feels that the move may not be all that detrimental to the non-major ports. "Oil traffic accounts for almost half of all the cargo handled at the ports. And the demand for oil is only going up. So, even if a port charges lower tariff, it will still earn higher profits due to higher volumes," he argued.

Source : Exim News Service - New Delhi, Nov. 9