The Indian Ports Bill, 2020 governs both major ports and non-major ports. It will replace the antiquated Indian Ports Act, 1908. The Bill seeks, inter alia, to enable the structured growth and sustainable development of ports to attract investments in the port sector for optimum utilisation of the Indian coastline by effective administration and management of ports. It shall further ensure greater investment in the Indian maritime and ports sector through the creation of an improved, comprehensive regulatory framework, including the creation of the Maritime Port Regulatory Authority (MPRA), state maritime boards, adjudicatory bodies and appellate tribunals for the resolution of disputes and to curb any anti-competitive practices etc.

The Bill also seeks, inter alia, to create an enabling environment for the growth and sustained development of the ports sector in India through the formulation of the national port policy and national port plan in consultation with coastal state governments, state maritime boards and other stakeholders.

Various provisions of the Indian Ports Act have been updated to ensure the greater safety, security, pollution control, performance standards and sustainability of ports. The Bill ensures that all up-to-date conventions/protocols to which India is a party are also suitably incorporated.

Key features of the Bill include:

The Bill contains 95 sections as against 68 sections of the original Act by bringing in new provisions and making the new Act more comprehensive.

The Bill provides for the formation of a Maritime P ort Regulatory Authority (MPRA) consisting of a chairperson to be appointed by the central government and two members to be appointed by the central government as full-time membe rs, which shall include one member (legal) and two members to be appointed by rotation from the coastal state governments.

The functions of the MPRA shall be to advise the central government on matters relating to the national port policy and plan, formulate short-term and perspective plans for development of the port sector and co-ordinate the activities of the planning agencies for optimal utilization of the coastline of India, to make recommendations on the necessity, feasibility and viability of new and/or existing ports, assessing efficiency, economy, capacity and competitiveness of the existing ports/ facilities etc. The government may, after obtaining prior recommendation from the MPRA, determine (a) whether the Act shall be extended to any port in which the Act is not in force or to any part of any navigable river or channel which leads to any port and in which the Act is not in force; (b) specially extend the provisions of the Act to any port to which they have not been so extended; (c) withdraw the Act or any part thereof in which it is for the time being in force, fix and alter the port limits etc.

The Bill envisages the setting up of adjudicatory boards by each state government. These adjudicatory boards will have powers to adjudicate any dispute relating to or connected with non-major, PPP concessionaires, state maritime boards, captive users or port officials or port users or port service providers or port. The appellate tribunal, for the purposes of the Act, is designated the adjudicatory board constituted under section 54 of the proposed Major Port Authorities Act, 2020.

Every state government for a port other than a major port shall constitute, for the purposes of the Act, a maritime board for the state to be known as the state maritime board. The functions of the state maritime board shall be to initiate plans, execute works and generally to promote the use, development, and improve the functioning of non-major ports.

The major areas of concern are in respect of powers given to the MPRA to recommend defining or altering port limits, fixation of tariffs etc which have hitherto been under the purview of the state governments in respect of non-major ports. While some central planning is essential to prevent haphazard growth of ports, such centralization should not impinge on the autonomy of the state governments which will have a direct bearing on the functioning of private ports in states.

The MPRA will also have powers inter alia to specify the model terms and conditions for different types of contracts entered into for the purpose of executing port activities, port operations, port services or port works, including those contracted out to third parties. It is not clear whether the contractual rates between the PPP operators in major and non-major ports and third-party service providers also come under the purview of the regulator. From the point of view of operational freedom for the PPP operators, there is a need to review such provisions.

The MPRA will also have power to make such regulations or guidelines or directions, which shall be binding on the ports, port officers, port operators, port service providers etc. This gives the MPRA power to set regulations that are binding upon port operators which may interfere with the provisions of the concession /licence agreements. It needs to be ensured that concession / licence agreements made with PPP operators will continue as they are with no changes in the terms and conditions.

The Bill provides that an appeal shall lie against any order, other than an interlocutory order, of the appellate tribunal, to the Supreme Court. It is not advisable that any orders passed by the MPRA and the tribunal ought to directly be subject to the appellate jurisdiction of the Supreme Court of India. The Bill must provide that routine matters, including fixation of tariffs and / or other administrative issues in relation to any port (major or minor), should be subject to the appellate jurisdiction of the High Court under whose control the port is situated. The Bill may consider that matters of policy, including the introduction of new ports, etc., be subject to the appellate jurisdiction of the Supreme Court.

The port tariffs will be determined by each port subject to the supervisory control of the MPRA. It seems this provision is applicable to all the ports, including major ports. But the port charges related to major ports are governed by the Major Port Authorities Bill, which envisages giving tariff freedom to port operators. This contradiction needs to be removed and PPP operators should be given complete freedom in levying market-determined tariffs.

Having said that, the Bill is a welcome step in the right direction and will lead to uniform and sustainable development of ports in India, bringing in greater transparency, lower transaction costs and quality infrastructure.