Port corporatisation to begin with JNPT

The Indian government has embarked on a plan to convert 12 major ports to corporate entities – a move that would give these ports the much-needed freedom to set tariffs and compete with foreign and Indian private ports to which they are losing traffic, the Financial Express (India) reported.

According to a senior government official Mumbai's Jawaharlal Nehru Port Trust (JNPT) would be made a company in 2010-11, and the process for corporatisation of at least two more ports would be initiated in the same fiscal.

Ennore Port is the only corporate entity among major ports in the country – it was corporatised in 2001 – while all others are governed by trusts set up under the Major Port Trusts Act 1963 (MPTA), which has many restrictive provisions.

Being trusts under MPTA, the tariffs of major ports are fixed by the Tariff Authority for Major Ports (Tamp).

Currently, a method of upfront fixation of tariffs for specified periods on the basis of a commitment to share revenue with the government, the landowner, is being followed by Tamp.

Marmugao and Mangalore ports and Haldia Dock Complex are the entities that are likely to be corporatised soon after JNPT. Explaining the rationale behind the move to corporatise major ports, the official said, "MPTA has many outdated provisions that inflate port charges. This has resulted in foreign ports taking away traffic from our major ports which anyway are finding it difficult to compete with the more efficient private ports in the country. A corporate tag would accord them the autonomy required for improving efficiency of operations and competing with private players."

(Source: www.schednet.com)