A new Tariff Guidelines for setting tariff for port services was announced by Ministry of Shipping (MoS) on 31st July 2013. It is aimed to level playing field in Ports Sector by providing flexibility to major ports and private terminal operators at major ports to set market linked tariffs.
The guidelines will be applicable to any Major ports and any other PPP arrangement after 31st July 2013 for a period of 05 years unless revoked or modified earlier. Projects governed by the 2005 Guidelines and the 2008 Guidelines remains unaffected.
The port trust proposes the reference tariff for each service or category of service along with the performance standards to TAMP. The reference tariff remains the maximum fixed tariff at the concerned major port trust provided with escalation of 60% of Wholesale Price Index (WPI) per annum. In no tariff has been fixed for a commodity in the Major Port, the notified tariff of other Major Port which is representative enough with justification will be considered for reference tariff purpose. TAMP to notify the said tariff within 15 days of receipt of such proposals.
Port-wise and commodity-wise reference tariff and performance standard to be notified every 05 years as on 1st of April. Subsequent bids to be evaluated on basis of prevalent reference tariff.
Tariff determination for private operator awarded terminal of PPP basis, tariff determination will be as follows.
From Commercial Operation Date (COD) to 31st March of same – tariff limited to reference tariff
From second year onwards – Operator is free to propose performance linked tariffs with tariff cap of 115% of the reference tariff for corresponding year.
Such proposal to be made 90 days before 1st April of the concerned year and operator meeting performance standard has to be supported by certificate from independent engineer as appointed under the concession agreement for the terminal.
Non-achievement of performance standards in last 12 months leads to non-consideration of performance linked tariff notification for the following year.
PPP operator will share revenue based on the reference tariff or the performance linked tariff prevalent in the year. In case the operator charges a tariff less than the notified tariff, the revenue share continue to be linked to indexed or notified tariff for the year.
Similar process is to be followed by terminals owned by the port trusts but the independent engineer certifying the adherence to performance standards would be a panel drawn by Indian Ports Association (IPA).
Ports users can send comments as the proposal would be hosted for the purpose on the website of the Major Port. Captive berths awarded on PPP basis would follow the same process.