KOCHI: The central government decided to withdraw from determining rates for cargo and container movement at major ports. A board formed by the port authorities and the private companies responsible for port operation, will now decide the rates. This will bring market-controlled pricing similar to that in the petroleum and aviation sectors.
The draft guidelines have been released by the Union Ministry of Ports and Shipping. This will apply to Vizhinjam and Kochi ports. With this, competition will also intensify in the movement of goods. It is estimated that this will reduce the service rate.
The tariff is currently set by the central agency (The Tariff Authority of Major Ports). Consumers and exporters have raised complaints about the rates being too high. The rates are much higher compared to the rates at state-controlled ports.
Small ports handle 45 percent of the shipping traffic. This is why the move is to make large ports more professional and autonomous. At the same time, companies should pay the royalties to the port authorities as per the contract. Once the final notification is issued, the rate determination mechanisms will come into effect and the Major Port Trusts Act of 1963 will be repealed.
Rates yet to be decided:
“Currently, the maximum rate set by the Tariff Authority is being charged without any concession. This will be changed through the new system.”; Prakash Iyer (Chairman, Cochin Port Users Forum).