Indian Port Sector

The Indian Port and Shipping sector may witness a complete overhaul in the next 10 years, thanks to the government’s efforts in the policy and planning level to reform the sector.

The Sagarmala Programme

The National Perspective Plan for the Sagarmala programme was prepared and approved by the National Sagarmala Apex Committee on 9th April 2016 and released at the maiden Maritime India Summit 2016 on 14th April 2016 by Prime Minister Narendra Modi. A total of 173 projects have been initially identified under 4 projects types of Sagarmala viz Port Modernization, Port Connectivity, Port-led Industrialization and Coastal Community Development in the National Perspective Plan.

26 Port-Rail connectivity projects were identified under NPP, of which 2 have been completed and 18 are under implementation by Ministry of Railways. Most of these projects will be completed by 2019- 20. For one project, Indian Port Rail Corporation Limited has awarded the work to PMC and one other project is being implemented by the port itself. Remaining 4 projects are for implementation through JV/Non–Government Rail (NGR) model. The implementation of the projects identified under the National Perspective Plan, at an estimated investment of INR 4,000 billion, will be taken up by the relevant ports, State Governments/ Maritime Boards, Central Ministries, mainly through private or PPP mode, starting FY16-17.

New Port Act

With a view to aid its ambitious plan for the shipping sector, the Government of India has come up with several amendments in the existing laws governing the sector. The most important of these initiatives that has far reaching implications in the functioning of the port sector is the proposed ‘Central Port Authorities Act 2016’, which will replace the existing ’Major Port Trust Act 1963’. The Ministry of Shipping has already prepared a draft bill for the new legislation. This step is being taken keeping in view the need to give more autonomy and flexibility to the major ports and to bring in a professional approach in their governance.

After enactment of the law, port authorities will get more functional autonomy and will be mainly governed by the companies act. As per the draft, port related and non-port related use of land has been defined. A distinction has been made between these two usages 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. Similarly, the need for government approvals for raising loans, appointment of consultants, execution of contracts and creation of service posts have been dispensed with. The Board of Port Authority has been delegated power to raise loans and issue security for the purpose of capital expenditure and working capital requirement.

New Stevedoring Policy

The new Stevedoring & Shore Handling policy will come into effect from 31st of July. The existing stevedoring agents will have to switch over to the new Stevedoring & Shore Handling Scheme from that date and charge the ceiling tariff rate fixed. If they do not switch over to the new scheme, the license shall be terminated by the Port Trusts by giving due notice as envisaged in the regulations. The ports shall ensure that migration to the new Stevedores & Shore Handling Scheme is done by following the statutory provisions under the existing regulations. All existing contracts applicable to Stevedoring & Shore Handling operations would be allowed exemption till the date of expiry of the contract or 31st July 2017 whichever is earlier.

New Berthing Policy for Dry Bulk Cargo

Apart from this, the Ministry of Shipping has formulated a new Berthing Policy for Dry Bulk Cargo for all major ports which will come into effect from 20th August 2016. The main objective of the policy is to increase competitiveness of the major ports by creating value for the trade through reduced logistics cost. The policy will also provide a standardized framework for calculation of norms, specific to the commodity handled and the infrastructure available on the berth. It’ll also reduce berthing time and overall turn-around time of ships, drive higher cargo throughput using the available infrastructure in the major ports.

It is expected to improve utilization of port assets and create additional capacity without any significant capital investment, reassess the capacity of the berths based on the expected performance of the berth equipment and vessels derived from performance norms.

Source: Steel 360 Magazine Aug’16 Issue