Govt’s new PPP port guidelines link tariffs to market-determined rates

Union Ports, Shipping & Waterways Minister Sarbananda Sonowal on Wednesday announced Tariff Guidelines, 2021, for public-private partnership (PPP) projects at major ports. The new guidelines allow concessionaires at major ports to set tariffs in line with market dynamics.

At present, major ports’ PPP concessionaires handle around 50 per cent of the total traffic handled by all major ports in the country. “The biggest benefit of transition to market-linked tariff is that a level playing field will be provided to PPP concessionaires at major ports to compete with private ports,” the Ministry of Ports, Shipping and Waterways said in a press release.

Making the announcement, minister Sonowal said the government-mandated concessions in tariff for trans-shipment and coastal shipping would continue to apply to all future PPP concessionaires. “In fact, the government has gone a step further and made further concessions to promote trans-shipment and coastal shipping. The royalty payable for trans-shipment cargo will now be equal to (against 1.5 times earlier) the normal container. Similarly, for the coastal cargo, the concessionaire has to pay only 40 per cent of the royalty payable for foreign cargo (from 60 per cent earlier) in accordance with the coastal concession policy of the government. For transparency, the tariffs so fixed are to be hosted on the website of the concessionaire.

The minister added that these guidelines would usher in an era of market economy for the sector and go a long way in making the major ports competitive. He said the announcement of market-linked tariff guidelines comes at a time when the government is celebrating the current week as the ‘Good Governance’ week.

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