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The Major Port Authorities Bill, 2020

Author: Brahamdeep Kaur



The Major Ports Authorities Bill, 2020, which seeks to replace the Major Port Trusts Act, 1963, was introduced in Lok Sabha by Mr. Mansukh Mandaviya, the Minister of State for Shipping, on March 12, 2020. This Bill was passed by Lok Sabha on September 23, 2020, and by Rajya Sabha on February 10, 2021, where 84 members voted in its favor and 44 members voted against it. It now requires the assent of the President of India to become an Act.


This Bill was introduced in Lok Sabha in 2016 for the first time and was referred to the Parliamentary Standing Committee which, after consultations submitted its report on the Bill in July 2017. Consequently, an official amendment to the Bill was introduced in the Lok Sabha in 2018 but was lapsed after the dissolution of the previous Lok Sabha.


In this Bill, the number of Sections has been reduced from 134 to 76 by eliminating the sections which were overlapping and obsolete. The Bill endeavours to provide for the regulation, operation, and planning of major ports in India and to vest their administration, control, and management upon the Boards of Major Port Authorities. Further, it seeks to empower these ports by providing them greater autonomy in decision-making.


The Bill will apply to all the major ports of India and provides for the creation of a Board of Major Port Authority for each major port which will replace the existing Port Trusts and will comprise of a Chairperson and a Deputy Chairperson. Both, the Chairperson and the Deputy Chairperson are provided to be appointed by the Central Government on the recommendation of a selection committee. Besides them, the board will include one member each from the respective State Governments, the Railways Ministry, the Defence Ministry, and the Customs Department and two to four independent members plus two members who will be working for the interests of the employees of the Major Port Authority.


The Bill also provides certain financial powers to the Board by providing it autonomy to use its property, assets, and funds for the development of the major port as it deems fit. The Board can also make rules regarding the declaration of availability of port assets for port-related activities and services, development of infrastructure facilities such as setting up new ports, jetties, and providing an exemption from payment of any charges on any goods or vessels. The Bill also provides autonomy to the Board to use its funds for providing social benefits as well which includes the development of infrastructure in areas such as education, health, housing, and skill development. These benefits could be provided for the employees of the Board, customers, business partners, local communities, the environment, andthe society at large. Further, the Bill also provides that the Board or committees appointed by the Board will determine the scale of rates for assets and services available at ports that were earlier fixed by the Tariff Authority of Major Ports as under the 1963 Act.


They may also determine rates for services that will be performed at ports, the access to and usage of the port assets, and different classes of goods and vessels, among others. Under the Bill, the Board may also fix the tariff for the initial bidding purposes for PPP projects which are considered to be the projects taken up through a concession contract by the Board. Further, the Board may also raise loans from any scheduled bank or financial institution within India, or any financial institution outside India that is compliant with all the laws to meet its capital and working expenditure requirements. However, for loans above 50% of its capital reserves, the Board will require prior sanction from the central government. It is notable that under the 1963 Act, the Board has to seek prior sanction from the Central Government to raise any loan.


The Bill also provides for the formation of an Adjudicatory Board by the Central Government which will replace the prevailing Tariff Authority for Major Ports constituted under the 1963 Act. It will consist of a Presiding Officer and two members, who will be appointed by the Central Government. The Adjudicatory Board will perform certain functions being carried out by the Tariff Authority for Major Ports and will be adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires, and will also be reviewing the stressed PPP projects and suggesting measures to revive such projects and to look into complaints regarding services which are provided by the ports or the private operators operating within the ports.


As regarding the penalties, the Bill provides that any person contravening any provision of the Bill or any rules or regulations will be punished with a fine of up to one lakh rupees. Furthermore, there are certain provisions for safeguarding the pay & allowances and service conditions including pensionary benefits of the employees of major ports as well.


This Bill is going to be very beneficial as it will help the ports to develop world-class infrastructure and will also enhance transparency in their functioning. They can nowwork with greater efficiency as a result of full autonomy in decision-making and modernization of the institutional framework of major ports. The Bill will also facilitate faster and transparent decision making which will benefit the stakeholders and will lead to better project execution capability.


Although the new Bill addresses the big hurdles that major ports have been facing, service quality and marketing are lacking at these ports as compared to private ones. Further, the Bill is also claimed to be aimed towards privatizing the ports and diluting the powers of the states on land use. Moreover, the mere creation of a mechanism is not enough.The board needs to operate with freedom and take decisions for the improvisation of service quality, efficiency, land usage, asset-monetization, tariff setting, and dispute resolution.


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