From UPSC perspective, the following things are important :
Prelims level : Various ports in India
Mains level : Corporatization of ports
Rajya Sabha has passed the Major Ports Authorities Bill 2020 with 88 votes for and 44 against it. The Bill was passed in Lok Sabha in September last year.
Major Ports Authorities Bill 2020: Major: Highlights
- The Bill provides for the regulation of major ports and will replace the Major Port Trusts Act of 1963, and a board of Major Port Authority for each major port will replace the current port trusts.
- The Bill will apply to the major ports of Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, VO Chidambaranar and Vishakhapatnam.
Boards to replace trusts
- Under the 1963 Act, all major ports are managed by the respective Board of Port Trusts that have members appointed by the central government.
- The Bill provides for the creation of a Board of Major Port Authority for each major port.
- These Boards will replace the existing Port Trusts.
- It will have a member each from the state governments, the Railways Ministry, the defence ministry, and the customs department.
- The Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port.
Board has financial powers
- Under the 1963 Act, the Board had to seek the prior sanction of the Centre to raise any loan.
- Under the new Bill, to meet its capital and working expenditure requirements, the Board may raise loans from any scheduled bank or financial institution within India, or any financial institution outside India.
- However, for loans above 50% of its capital reserves, the Board will require prior sanction of the central government.
The board will fix rates
- At present, the Tariff Authority for Major Ports fixes the scale of rates for assets and services available at ports.
- Under the bill, which now awaits President’s accent to become a law, the Board or committees appointed by the Board will determine these rates for services that will be performed at ports.
- The services would include the access to and usage of the port assets, and different classes of goods and vessels, among others.
- Under the 1963 Act, there are various penalties for contravening provisions of the Act.
- The penalty for setting up any structures on the harbours without permission, for example, may extend up to Rs 10,000, and the penalty for evading rates may extend up to 10 times the rates.
- Under the new Bill, any person contravening any provision of the Bill or any rules or regulations will be punished with a fine of up to Rs one lakh.
- Opposition parties had opposed the legislation terming it the move to privatize ports.
- They said that this Bill is nothing but a retraction of the Singapore model.
- When there were hue and cry that there cannot be the privatization of ports, it adopted a policy of so-called corporatization. Thereafter, it ultimately privatized its ports.
- So, corporatization is the first step. The next in the offing is privatization said the opposition.
What did the govt. say?
- The government has brought in a provision that will allow ports to take their own decisions. To change tariffs, the ports have to now approach the ministry.
- The port sector in the last six years has doubled the profit. Profit has increased, liabilities have come down. For modernization, 300 projects are ongoing.
- This Bill is not to privatize any port, but it is to ensure that our ports can properly compete with private ports.