Market-linked tariff for PPP port projects

Projects under public-private partnerships (PPP) at major ports will be able to now determine tariffs in accordance with market dynamics, according to new tariff guidelines unveiled by the Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal on Wednesday.

The move was necessitated after the new Major Port Authority Act, 2021 came into effect from November 3. “Currently, major ports’ PPP concessionaires handle around 50% of the total traffic handled by all the major ports in India. The biggest benefit of transition to market-linked tariff is that a level playing field will be provided to the PPP concessionaires at major ports to compete with private ports,” said a Ministry statement.

These new guidelines will be applicable for future PPP projects, including projects which are currently under the bidding stage.

Minister Sonowal said that the concessions in tariff for trans-shipment and coastal shipping will, however, continue to apply to all future PPP concessionaires.

The government also announced additional concessions and said that the royalty payable for trans-shipment cargo will now be 1.0 times (from 1.5 times earlier) the normal container. Similarly, for coastal cargo, the concessionaire has to pay only 40% of the royalty payable for foreign cargo (from 60% earlier) in accordance with the government’s coastal concession policy.

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