India passes Major Port Authorities Bill to establish landlord port model

February 11, 2021: Indian Parliament on Wednesday passed the major Port Authorities Bill, 2020 that aims at decentralizing decision making and infuse professionalism in the governance of major ports by switching them to landlord port model.

Mansukh Mandaviya, minister of state (I/C) for ports, shipping &waterways moved the bill in Rajya Sabha and it was passed. Now the bill will go to the president of India for his assent.

“It imparts faster and transparent decision making benefiting the stakeholders and better project execution capability. The bill is aimed at reorienting the governance model in central ports to landlord port model in line with the successful global practice. This will also help in bringing transparency in operations of major ports. This will empower the major ports to perform with greater efficiency on account of full autonomy in decision making and by modernizing the institutional framework of major ports,” said the ministry of shipping release.

Rajiv Agarwal, CEO & MD, Essar ports, said, “The major ports Authorities Bill passed by the Rajya Sabha is indeed a revolutionary move in the Indian ports Sector. The bill will provide regulation, flexibility and self-governance to the major ports of the country. It will develop a faster and transparent decision-making process, which will help in the growth and development of major ports thereby enabling them to compete in the evolving market environment. Also, the move will certainly pave way for driving the country’s vision towards Aatmanirbhar Bharat and making India – a global manufacturing hub."

Features of major Port Authorities Bill 2020 
a.    The bill is more compact in comparison to the major Port Trusts Act, 1963 as the number of sections has been reduced to 76 from 134 by eliminating overlapping and obsolete sections.

b.    The new bill has proposed a simplified composition of the Board of Port Authority which will comprise of 11 to 13 members from the present 17 to 19 members representing various interests. A compact board with professional independent members will strengthen decision making and strategic planning. Provision has been made for inclusion of representatives of state government in which the major Port is situated, ministry of railways, ministry of defence and customs, department of revenue as members in the board apart from a government nominee member and a member representing the employees of the major Port Authority.

c.    The role of tariff authority for major ports (TAMP) has been redefined. Port Authority has now been given powers to fix tariff which will act as a reference tariff for purposes of bidding for PPP projects. PPP operators will be free to fix tariff- based on market conditions. The Board of Port Authority has been delegated the power to fix the scale of rates for other port services and assets including land.

d.    An adjudicatory board has been proposed to be created to carry out the residual function of the erstwhile TAMP for major ports, to look into disputes between ports and PPP concessionaires, to review stressed PPP projects and suggest measures to review stressed PPP projects and suggest measures to revive such projects and to look into complaints regarding services rendered by the ports/ private operators operating within the ports.

e.    The Boards of Port Authority have been delegated full powers to enter into contracts, planning and development, fixing of tariff except in national interest, security and emergency arising out of inaction and default. In the present MPT Act, 1963 prior approval of the Central Government was required in 22 instances.

f.    The board of each major port shall be entitled to create a specific master plan in respect of any development or infrastructure.

g.    Provisions of CSR & development of infrastructure by Port Authority have been introduced.

h.    Provision has been made for safeguarding the pay & allowances and service conditions including pensionary benefits of the employees of major ports