Rajat Sachar Adviser(E) Ministry of Shipping

1. RECENT REFORMS IN THE PORT SECTOR 3rd February, 2017 • Rajat Sachar • Adviser(E) • Ministry of Shipping

2. OUTLINE • Backdrop of Port sector reforms • Major Port Authorities Bill, 2016 – in Parliament • Revamp of Model Concession Agreement • Berthing Policy in Major Ports • Stevedoring Policy in Major Ports • Ease of Doing Business

3. Indian Maritime Sector: Overview • 7,500 Kmslong coastline • ~212 ports • ~70 coastal districts • ~1 bntonnecargo handled currently1 • ~90% of EXIM trade (by volume) handled at ports • ~111 waterways

4. Pillars of Sagarmala Programme Port-led Development Coastal community development Port Connectivity Enhancement Port modernisation Port-led industrialisation • De- bottlenecking existing ports • Capacity improvement at existing ports • New ports • Highways • Railways • Inland waterways • Pipelines • Multimodal Logistics Hubs • Industrial clusters • Coastal Economic Zones • Coastal Economic Units • Skill development • Coastal Tourism • Fisheries

5. Thematic studies and action plans developed across sector for implementation A • Alignment of (new) port capacity with key cargo flows B • Progression towards efficient modal mix leaning towards cheaper modes C • Aiming world class port efficiency through benchmarking & modernization D • Creating logistics infrastructure comparing to global benchmarks; aiming to reduce overall logistics cost E • Leverage port influence for industrialization and manufacturing F • Empowering coastal communities to participate in development opportunities G • Creatingan enabling environment for affiliated sectors H • Mobilize investments across sector

6. Commodities covering ~85% of port traffic were studied in detail to identify projects and themes for implementation • Coastal shipping revolution • Coastal industrial greenfield plants (steel & Cement) • Reduce time to export container by 5 days • Reduce cost to export by ~50 USD per container • 17% • 100% • 12% 14% • 20% • 37% • Total • POL • Thermal • Coal Steel & raw materials • Containers1 • Other cargo MTPA, percent, 2013-14

7. Port Modernization & New Port Development – Capacity build-up at Indian Ports Capacity build up at Indian ports MTPA, 2025 Cargo Traffic Port Capacity 3000+ 2015-16 2024-25 1 Capacity already accounts for a feasible occupancy rate (70%)

8. Port Modernization & New Port Development Modernization of existing Major Ports

9. Major Port Authorities Bill, 2016

10. Objectives of the proposed law • Major Ports Authorities Bill, 2016 to replace MPT Act, 1963 • A new legal framework to facilitate transition of the Ports to the global norm of Landlord Port Model • Modern governance structure • Reduce control of Government over Ports in day to day operations • Introduce new regime on fixation of tariff • Liberalisation in raising loans

11. Salient features of MPA Bill, 2016 • Reduction in number of Sections in Law from 134 to 65 • Slim and compact Board with 9-10 members against 17-19 members • No Government approval needed for operational decisions. • New tariff regime • Setting up of Adjudicatory Board • Residual functions of erstwhile TAMP • Dispute resolution between PPP Operators & Ports • To review stressed PPP projects & suggest remedial measures • Grievance redressal of Port users • Master Plan to be approved by Port Authority. • No Government approval needed for raising loans including Forex loans, provided the loans do not exceed 50% of the Capital Reserve.

12. Revamp of Model Concession Agreement

13. MODEL CONCESSION AGREEMENT (PORT SECTOR) • The present MCA was approved by Cabinet on January 3, 2008 • Ministry has awarded 65 projects based on MCA • Proposed revision based on the Committee Reports and experience of last two decades

14. Key Changes • New exit clause for bidder. • Revenue Share shall be payable on the quantity of cargo handled. • Provision for additional land. • Concessionaire is free to deploy higher capacity equipment/facilities for higher productivity. • Constitute a Review Board to look into disputes between Port and PPP Operators and also to review the Concession Agreement. • Providing for refinancing options.

15. Berthing Policy in Major Ports

16. Background and Objectives • Background • Dry bulk cargo makes up more than 26% of the cargo handled at the 12 major ports • Performance norms were not being used optimally for improving productivity. • Objectives • Reduce berthing time & overall turn-around time of ships; drive higher cargo throughput using the available infrastructure in the Major Ports • Improve utilization of port assets and create additional capacity without any significant capital investment. • Increase competitiveness of the Major Port by creating value for the trade through reduced logistics cost

17. Salient features • Standardized framework provided for calculations of norms, specific to the commodity handled and the infrastructure available on the berth. • Standardize anchorage charges to reduce berthing time & overall turn­around time of ships. • Drive higher cargo throughput using the available infrastructure in the Major Ports. • Introduce a system of incentives and penalties

18. Stevedoring Policy in Major Ports

19. Salient Features • Policy also applies to Mumbai Port and Haldia where stevedoring is carried out by the Ports. • Existing Stevedoring Agents have to switch over to the new Scheme • Exemption for all existing contracts till the date of expiry of the contract or 31st July, 2017, whichever date is earlier; e.g. Haldia • TAMP to notify the normative tariff based on a set of Guidelines • Tariff to be mandatorily displayed on the Port website • Port to appoint a nodal officer responsible for monitoring of Stevedoring and Shore Handling tariffs including complaints

20. Ease of doing Business

21. New Initiatives • To reduce congestion at Port gates, manual form 11 & 13 have been dispensed with by introducing Web based e -form 13. • To facilitate direct port delivery, Import General Manifest has been integrated with Terminal Operating Systems of Major Ports with Customs Software i.e. ICEGATE . • 27 out of 33 Shipping Lines at JNPT have implemented issuance of e-DO. • To enhance security and facilitate seamless movement of traffic across Port gates, RFID System is installed at Major Ports. • Procurement and installation of Containers scanners

22. THANK YOU