Though it has been seven years since private players were allowed in the ports sector, it has not had any remarkable consequences. As many as 38 projects worth Rs 7,640 crore (Rs 76.40 billion) have been identified, but only 45 per cent of them have received commitments of Rs 3,247 crore (Rs 32.47 billion).
The fate of the remaining 21 projects remains uncertain -- while around 10 have only reached the bidding stage, the others are still at the processing stage.
Of the 17 approved projects expected to create 61.53 million tonnes of capacity, only eight with a capacity of 35 million tonnes have been completed.
The Tenth Plan had envisaged investments of Rs 11,256.92 crore (Rs 112.57 billion) by the private sector to add 126 million tonnes of additional capacity. This now seems difficult.
"The private operators have been cautious about investing in the ports sector because of the restrictive policy environment," a senior executive at P&O, which manages three container terminals at Nhava Sheva, Chennai and Mundra, said.
One of their main grievances had been the regulation of charges by the tariff authority for major ports, he said.
He pointed out that the fixing of a ceiling would not help and ports must be given more freedom to fix their own rates in view of the increasing globalisation and greater business opportunities.
The shipping ministry recently issued directions asking the Tariff Authority for Major Ports to fix a tariff ceiling and floor discount rates.
Differential charging and adjusting charges in tune with market forces were an accepted business practice and the requirement to take permission from TAMP for every little change in rates would affect the functioning of the ports, the official said.
He also said private players would come in only if they were assured sizeable traffic.
The complaint over Concor setting high charges could be countered by allowing competition in the inland transport of cargo to the hinterlands.
Port operators might be interested in investing in developing an alternative to Concor services. This could either be a dedicated service or a shared facility with all-India operations, he said.
Ports problems
- The Tenth Plan had envisaged investments of Rs 11,256.92 crore by the private sector to add 126 million tonnes of additional capacity.
- The restrictive policy environment is keeping private operators from investing in ports.
- One of the main grievances of the private sector has been the regulation of charges for major ports by the tariff authority.
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