In the past one year, the government has unveiled a plethora of initiatives aimed at developing the port sector as well as sustaining its growth. Several measures were taken to lessen the impact of Covid-19 as well. As a result, after registering negative growth rates during the first half of 2020-21, the sector started witnessing a deceleration in the rate of cargo contraction from June-July 2020 onwards.
Indian Infrastructure provides a snapshot of key policy and regulatory developments in the ports and shipping sector over the past one year…
- In December 2020, the Ministry of Ports, Shipping and Waterways (MoPSW) (erstwhile Ministry of Shipping) issued the draft of the Indian Ports Bill, 2020 for public consultation. The bill will repeal and replace the Indian Ports Act, 1908. Among other things, it seeks to enable the structured growth and sustainable development of ports to attract investments in the sector. This, in turn, will ensure optimum utilisation of the Indian coastline by effective administration and management of ports.
- The MoPSW has invited comments on the draft of the Dredging Guidelines for Major Ports, 2020. The guidelines are to be followed by major ports to ensure implementation of dredging projects for cost effectiveness and delivery of projects as per schedule.
- The ministry has also issued drafts of the Merchant Shipping Bill, 2020; Aids to Navigation Bill, 2020; and Coastal Shipping Bill, 2020, for public consultation. While the Merchant Shipping Bill aims to repeal and replace the Merchant Shipping Act, 1958 (Act No. 44 of 1958) and the Coasting Vessels Act, 1838 (Act No. 19 of 1838), the Aids to Navigation Bill proposes to replace the Lighthouse Act, 1927, to incorporate global best practices, technological developments and the country’s international obligations in the field of marine navigation.
- In another notable development, the MoPSW has extended the 80 per cent discount on vessel-related charges and cargo-related charges given to coastal roll-on-roll-off vessels by another two years. The discount, which was first introduced in September 2016 for a period of two years, expired in September 2018. The scheme has now been extended till January 2022.
- In another significant development, in another the Major Port Authorities Bill, 2020, was passed in the parliament in February 2021. The bill aims to decentralise the decision-making process and infuse professionalism in the governance of major ports. It has redefined the role of the Tariff Authority for Major Ports. Port authorities have now been given the right to fix their tariffs which will act as reference tariffs for purposes of bidding for public-private partnership (PPP) projects.
- In order to provide affordable and timely resolution of disputes in a fair manner, the MoPSW launched the Society for Affordable Redressal of Disputes-Ports (SAROD-Ports). At a time when all the major ports are likely to shift to the landlord model, SAROD-Ports is expected to instil more confidence in private players and put an end to disputes while saving legal expenditure and time.
- Earlier, in July 2020, the Paradip Port Trust (PPT) approved the berthing policy for vessels for 2020-21, with effect from August 1, 2020. PPT also gave its nod for the Priority Berthing Scheme for dry bulk cargo for coal berths 1 and 2 at the mechanised coal handling plant, and general cargo berths.
In November 2020, the Central Board of Indirect Taxes and Customs notified a new policy and guidelines for setting up container freight stations (CFSs), inland container depots and airfreight stations. As per the new guidelines, the locations will be classified as green, blue and red.
Meanwhile, a new Captive Policy for Port Dependent Industries has been prepared for addressing the challenges of renewal of concession period, scope of expansion, and dynamic business environment.
Earlier, in December 2019, the Recycling of Ships Bill, 2019, became an act after receiving the consent of the President of India. In addition, India decided to accede to the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, 2009. The Recycling of Ships Act, 2019 restricts and prohibits the use or installation of hazardous materials, which applies irrespective of whether a ship is meant for recycling or not.
Initiatives in light of Covid-19
The outbreak of Covid-19 resulted in unparalleled challenges for the maritime sector. From reduced cargo operations to unclaimed cargo lying at ports, shortage of labour and raw material, disruptions in supply chains and additional measures to ensure adherence to social distancing norms, the pandemic impacted every sphere of the port sector. Even so, the sector was allowed to operate and the government undertook a series of initiatives to lessen the impact of the pandemic.
Right at the onset of the pandemic, the MoPSW unveiled a relief package allowing firms running cargo terminals at major ports on a PPP basis to defer their revenue share, royalty and equipment hire charges without any interest for the months of April, May and June. The ministry also directed major port authorities to implement its advisory issued on April 21, 2020, stating that no penal charges would be levied on port users during the lockdown period, along with 30 days of recovery time. Other initiatives taken by the MoPSW, along with the port authorities, include not imposing container detention charges on export-import shipments or any new or additional charge, extending free storage time, waiving the late fee, reducing pilotage and berth hire charges, providing exemptions or remissions on penalties during the lockdown period, and urging importers to clear their consignments at the earliest so that customs areas remain unclogged.
The country’s biggest container handling major port, the Jawaharlal Nehru Port Trust also announced relief measures to support port users and end users in light of the shortage of drivers for transporting containers by truck between the nearby CFSs, factory/catchment areas and the port. Meanwhile, the Directorate General of Foreign Trade extended the existing Foreign Trade Policy (2015-20), which was valid up to March 31, 2020, for one year till March 31, 2021. A number of other changes were made including extending the date of exemptions by one year and extending the validity of duty-free import authorisation and export promotion capital goods authorisations for import purposes. Besides, a number of technological initiatives were taken to keep the port operations running. From enabling electronic communication of PDF-based final electronic out-of-charge copy of bill of entry, to the issuance of e-Gate passes to importers/customs brokers, introduction of e-office system, etc., both ports as well as customs authorities didn’t leave any stone unturned to lessen the impact of the pandemic.
In sum
The Covid-19 outbreak has severely affected the maritime sector in multiple ways and has put the much-anticipated maritime recovery in jeopardy. To this end, the adoption of technological advancements is a sure-shot way to ensure sector growth. The maritime sector needs to focus on attracting more investments, improving efficiency and ensuring sustainable development of ports. The policy guidelines formulated and implemented should be robust, investor-friendly and equitable to enable optimum utilisation of the Indian coastline.