Tariff Authority for Major Ports (TAMP)
Tariff Authority for Major Ports (TAMP) is a multi-member statutory body with a mandate to fix tariffs levied by major port trusts under the control of Union Government and private terminals therein. It is mandated not only to fix the rates but also the conditionality’s governing application of the rates.
Section 47-50 of the Major Port Trust Act, 1963 provides the legal backing for TAMP.
The Government of India took a policy decision in 1996 to develop the first private terminal in India at Jawahar Lal Nehru Port Trust (JNPT), Mumabi through public-private partnership (PPP) route. In order to enable private sector participation in major ports sector, the Government of India in October 1996 issued a set of guidelines which, inter alia, provided for creation of a tariff fixing body. Accordingly, the Major Port Trusts Act, 1963 was amended and Tariff Authority for Major Ports (TAMP) was created in April 1997. Tariff Authority was created as a regulator for fixing tariff at all major port trusts so that the PPP projects would have a central body to regulate tariff instead of private operators fixing it themselves.
TAMP fixes tariff based on tariff guidelines, which are issued to it by Government of India, Ministry of Shipping as policy directions. Bidding for projects takes place based on prevailing tariff guidelines. At present, 3 sets of tariff guidelines are in existence viz. 2005, 2008 and 2013.
Recent Reforms in tariff regulation
When TAMP was formed in 1997, non major ports collectively handled less than 10 per cent of port traffic. In 2012-13 they handled 389 million metric tonnes of cargo, with a share of 42 per cent of total traffic, indicating a shift in traffic to non-regulated operators.
The emerging trends in this market in India suggest that intra as well as inter port competition exists. There is intense competition between the major and non-major ports and this competitive environment is expected to deepen and broaden further when ongoing port development projects get completed. The public-private partnership model is bound to create a highly competitive port services market where market forces themselves will play the role of an effective regulator. In such a scenario subjecting the major ports to the regulatory control of the TAMP and allowing the non-major ports the freedom to fix and revise their tariff structure appears to be unfair.
An inter-ministerial task force set up by the Planning Commission in 2012 recommended that since there is sufficient competition in the sector, tariffs need not to be regulated in major ports. It suggested that in the medium term, the Ministry of Shipping may take steps for amending the Major Port Trust Act 1963 so that tariffs at major ports are determined by competitive market forces in conformity with the international practice.
As an interim measure, therefore, the Government recently announced new guidelines for tariff setting in Major Ports. This new Guidelines impart flexibility to the Major Ports in determination of tariff. The new tariff guidelines have come into effect from 31st July 2013.