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"The aim is to streamline and clarify issues raised by the private players on the basis of experience gained in the past to infuse transparency in the policy of private participation in the major ports sector," Shipping Ministry sources said.

NEW DELHI, April 8

THE Ministry of Shipping will issue revised guidelines for private sector entry into the major ports sector.

An exercise in this direction was flagged off here on Tuesday, with the Shipping Ministry top-brass convening a meeting of various stake holders in the sector, such as private operators, major ports, financial, technical and legal experts.

"The aim is to streamline and clarify issues raised by the private players on the basis of experience gained in the past to infuse transparency in the policy of private participation in the major ports sector," Shipping Ministry sources participating in the meeting said.

During the meeting, several leading private players in the major ports arena such as P&O Ports, PSA Corporation and J M Baxi came up with suggestions for the Ministry's consideration. To consider the inputs and recommend changes, a small committee, comprising representatives from the Government, major port trusts and private operators, is expected to be set up.

"The exercise is expected to be completed in a couple of months before revised guidelines are issued by the Ministry,' the sources said.

The revised norms will make private entry into major ports " more investor friendly".

On the basis of the experience gained in implementing the policy, the Shipping Ministry is veering around to the view that it should not lay down the law for investments by the private operators in erecting equipments at the facility being developed within a certain timeframe.

"Our aim should be to identify a good operator to run the facility. The rest should be left to his business judgment and freedom," the sources said.

Further, the revised norms will state that the draft concession agreement for the projects being developed at major ports by private entities would be discussed clause by clause with all the short-listed bidders and finalised before inviting price bids. "Thereafter, any deviations/concessions sought by the successful bidder will not be entertained," the sources said.

The revised guidelines will also clarify the Ministry's stand on setting up competing parallel facilities at major ports in order to promote intra-port and inter-port competition.

While revenue sharing would be the sole criteria for awarding the contract, the Government would collect an upfront fee from the private operators to the minimum extent possible. Private operators setting up greenfield projects at major ports will have the freedom to hire their own labour.

But, when an existing facility is being leased out to a private operator, he will have to take over the labour deployed at such berths/terminals.

The port workers will be given the option either to opt for the voluntary retirement scheme (VRS) offered by the port trusts or join the private operator. Alternatively, the workers can avail of the lien facility and join the private operator. "If any worker is not satisfied with the private operator, he can return to the port trust fold by resorting to the lien," the sources said.

Significantly, during the inter-active meeting, some of the private operators sought the Ministry's views on the role of the Tariff Authority for Major Ports (TAMP), the regulator for major ports in the country. "Pricing is a key issue in privatisation and the Government should clarify its policy on the regulator's role in this regard," a private sector official remarked.

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