Although the introduction of the draft tariff guidelines by the shipping ministry is a move in the right direction, the fact that it is applicable prospectively leaves existing terminal operators dissatisfied.    

The draft guidelines, if implemented, would not be applicable to the existing 16 private terminals that have been operating for several years. These terminals would be governed by their respective guidelines framed in 2005. It may be noted that the validity of the 2005 norms ended in 2010 after a five-year run, but has been extended many times. The last extension ended in December and the ministry recently extended the norms further till June. No solution is in sight for existing terminal operators.

This has become a contentious issue between the government and the private terminal operators.  Experts opine that the government must solve the sticky issue of tariff setting by TAMP, which has been dampening investor sentiment in port projects.

It has been a long standing demand of terminal operators of major ports to dismantle Tariff Authority for Major Ports (TAMP) as its regulations are said to be undermining efficiency and profitability of these operators.

The shipping ministry is unable to dismantle TAMP without Parliament’s sanction. The ministry needs the approval of parliamentarians to amend the Major Port Trusts Act, 1963, to do away with TAMP, which would benefit all operators, old as well as new. A market-driven tariff regime with riders may not enthuse investors, experts argue.

Until such time, the government dismantles TAMP, the existing terminal operators cannot move towards a market determined tariff regime.