Explained: All you need to know about The Major Port Authorities Bill, 2020

Indian Parliament

Rajya Sabha on February 10 passed the Major Ports Authorities Bill 2020 with 88 votes for and 44 against it. The Bill was passed in Lok Sabha during the Monsoon session on September 23 last year.

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.

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, according to PRS Legislative Research, a not-for-profit group involved in legislative research.

The Board will comprise of a chairperson and a deputy chairperson, appointed by the Centre on the recommendation of a selection committee. It will have a member each from the state governments, the Railways Ministry, the defence ministry, and the customs department. The Board will also include two to four independent members, and two members representing the interests of the employees of the Major Port Authority.

The Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port.

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 that is compliant with all the laws. However, for loans above 50% of its capital reserves, the Board will require prior sanction of the central government.

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 access to and usage of the port assets, and different classes of goods and vessels, among others, according to PRS Legislative Research.

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 Congress, the Left, DMK, Trinamool Congress, RJD and the SP had opposed the legislation terming it the move to privatise ports.

“This Bill is nothing but a retraction of the Singapore model. When there was hue and cry that there cannot be the privatisation of ports, it adopted a policy of so-called corporatisation. Thereafter, it ultimately privatised its ports. So, corporatisation is the first step. The next in the offing is privatisation,” TMC MP Sukhendu Sekhar Ray said in Rajya Sabha

Minister of State (Independent Charge) Mansukh Madaviya said in Rajya Sabha that in the new Bill, 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.

“In the port sector in the last six years, we have doubled the profit. Profit has increased, liabilities have come down. For modernisation, 300 projects are ongoing,” he said.

“This Bill is not to privatise any port, but it is to ensure that our ports can properly compete with private ports,” the minister said in response to Opposition’s charge that the Bill is aimed at privatising ports

The BJD and YSRCP supported it. Some Opposition members said the legislation would adversely affect states’ rights.