Port tariff reforms are under way in India with the government agreeing to market-based guidelines according to a report in Port Finance International (PFI).
In the past port tariffs have been governed by a complicated formula based on return on capital and implemented by the Tariff Authority for Major Ports (TAMP).
However, the report states that the rules were widely seen as restrictive, hampering growth and have deterred investors.
PFI states that port operators such as PSA International, APM Terminals and DP World have been told to scale down existing rates instead of being allowed to increase their tariffs.
Operators have called for the abolishment of TAMP, however if this were to happen, then prices would inevitably rise.
TAMP regulations affect India’s 12 major ports which are controlled by the Indian government.
India’s minor ports do not have tariff restrictions and as such are attracting a raft of investors – investment is needed in road and rail infrastructure to transport goods to and from the ports.
The minor ports are with the gap in volumes handled by the different ports closing and the minor ports moving nearly 40% of all Indian cargo.
Projects approved from April 1 this year as part of the public-private partnership model will not be subject to the current restrictions.