The Standing Committee on Transport, Tourism and Culture has submitted its report on the Major Port Authorities Bill, 2016.
The Bill repeals the Major Port Trusts Act, 1963 and seeks to provide greater autonomy and flexibility to major ports.
What are the major recommendations?
Port governance structure - The Bill provides for the creation of a Board of Major Port Authority for each major port.
Under the 1963 Act, all major ports are managed by the respective Board of Trustees.
It noted that the Bill provides the government more flexibility and power to allow private players in the port sector.
It recommended that the Ministry should address stakeholder concerns regarding the possible full privatisation of ports in future.
It advised the Ministry to ensure that the administrative, managerial and financial control of the port remains with the Board of Major Port Authority.
Board Composition - Other than the Chairperson and deputy Chairperson, the committee recommended having other members in the Board of Port Authority.
These include members from the respective state governments, the Defence Ministry, the Customs Department, few independent members who are experts in port activities.
It emphasized the need for a better representation of employees of the port on the Board.
It thus recommended appointing a minimum of two labour representatives, one of whom should be a serving employee.
Voting Powers - The bill provides that all questions will be decided by a majority of votes of the members present and voting.
The Chairperson or the person presiding will have a second or casting vote in case of equal votes.
The Committee recommended deleting this provision because it would impact the functional and strategic independence of the Board.
Land Contracts - The 1963 Act prescribes certain maximum value and a maximum period of 30 years for contracts dealing with port land.
It deals with acquisition, sale or lease of immovable property.
Any contract extending that value needs prior approval of the government.
However, the recent Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port.
Also under this, the contracts on sale or lease of immovable property can be for a maximum term of 40 years exceeding which would require a prior approval of the government.
The Committee noted that this provision does not provide clarity on the extent of land ownership of the Port Authorities.
It thus recommended retaining the provisions of the earlier Act itself.
Raising loans - The Bill provides for the ports to raise loans even from institutions outside India that is compliant with all the laws.
However, the Committee has noted that raising loans from private or foreign financial entities may give such entities control over the port management.
It recommended that the provision should be amended to ensure that the administrative control of the Port Authority always remains with the government.
It also recommended that any loans obtained from entities other than the government must be approved by the central government and RBI, and be notified.
Others - The committee recommended that while handing over port related activities to private operators, national security and safety should not be compromised.
This is particularly in reference with ports handling defence cargo.
It recommended that no new ports must be established in the 100 km vicinity of an existing major port, without the authority’s permission.
This is because new ports that come up in the vicinity of major ports affect their business and profitability.
