Centre releases draft guidelines on deregulating PPP port tariffs

09 Oct 2024 CW Team

The shipping ministry noted that while tariffs were previously regulated due to a limited competitive landscape, the evolving market conditions now necessitate deregulation. The initial aim of introducing tariff regulations in 2005 was to protect user interests while ensuring fair returns for ports and promoting competition and efficiency. However, significant shifts in the market and competitive landscape in the Indian port sector have occurred since then.

Under the new draft guidelines, PPP operators will have the authority to set their own scale of rates (SOR), subject to signing a supplementary agreement. Historically, major port authorities served both as service providers to end users and as the concessioning authority, making tariff regulations crucial for protecting the interests of both port users and PPP operators.

With the transition to a landlord port model and increased private sector participation, the relevance of fixed tariff regulations has diminished. Several PPP operators have expressed concerns to the ministry, indicating that they face disadvantages compared to fully private ports due to the lack of parity in tariff fixation, making PPP projects less attractive.

While the new regulations will allow greater pricing flexibility, they will not affect government revenues generated from these PPP projects, as there will be no changes to the royalty structure. The draft guidelines state that the royalty as a revenue share for major ports will not fall below the amount it would have received under the previous tariff fixation regime. This will be accomplished by converting the revenue share to royalty based on the project's previously determined Annual Revenue Requirement. (Business Standard)

In response to longstanding demands from private port operators for parity between recent winners of public-private partnership (PPP) projects at major ports and those with older contracts, the Centre has issued draft guidelines for tariff migration. These guidelines will enable concessionaires to transition to a market-based tariff regime. The shipping ministry noted that while tariffs were previously regulated due to a limited competitive landscape, the evolving market conditions now necessitate deregulation. The initial aim of introducing tariff regulations in 2005 was to protect user interests while ensuring fair returns for ports and promoting competition and efficiency. However, significant shifts in the market and competitive landscape in the Indian port sector have occurred since then. Under the new draft guidelines, PPP operators will have the authority to set their own scale of rates (SOR), subject to signing a supplementary agreement. Historically, major port authorities served both as service providers to end users and as the concessioning authority, making tariff regulations crucial for protecting the interests of both port users and PPP operators. With the transition to a landlord port model and increased private sector participation, the relevance of fixed tariff regulations has diminished. Several PPP operators have expressed concerns to the ministry, indicating that they face disadvantages compared to fully private ports due to the lack of parity in tariff fixation, making PPP projects less attractive. While the new regulations will allow greater pricing flexibility, they will not affect government revenues generated from these PPP projects, as there will be no changes to the royalty structure. The draft guidelines state that the royalty as a revenue share for major ports will not fall below the amount it would have received under the previous tariff fixation regime. This will be accomplished by converting the revenue share to royalty based on the project's previously determined Annual Revenue Requirement. (Business Standard)

Infrastructure Transport

17 Sep 2025

Chandigarh Metro cost climbs to Rs 25,000 crore amid delays

The long-awaited Chandigarh Tricity Metro project has seen its estimated cost balloon to nearly Rs 25,000 crore, following delays in approvals by the Union Territory administration. The cost, which stood at Rs 23,263 crore in February 2025, has risen by Rs 1,737 crore in just seven months, according to officials.The matter was raised during the transport standing committee meeting of the Administrator’s Advisory Council, chaired by AAP state president Vijay Pal. A presentation by Rail India Technical and Economic Service (RITES) strongly recommended that the Metro is the most suitable mass r..

Infrastructure Transport

17 Sep 2025

Mumbai Metro-3 may open fully by Dussehra

Mumbai is on the verge of a major transport milestone as the 33.5-km Metro-3 Aqua Line from Colaba to Aarey Colony nears full completion. Authorities are aiming to launch the entire corridor by Dussehra, pending final safety clearances.The project, executed in phases, has already brought relief to commuters. The first section between Aarey Colony and Bandra-Kurla Complex (BKC) opened in October 2024, followed by the BKC–Worli stretch in May 2025. The final Worli–Cuffe Parade segment is currently under safety inspections by the Commissioner of Metro Railway Safety (CMRS). A final review is ..

Infrastructure Transport

16 Sep 2025

Metro Line 2B Phase 1 to Boost Realty in Mumbai’s Eastern Suburbs

Mumbai’s real estate sector is set for a major boost as Phase 1 of Metro Line 2B, between Mandale and Diamond Garden, nears completion. The Mumbai Metropolitan Region Development Authority (MMRDA) has confirmed that mandatory rectifications are done, and inspections by the Commissioner of Metro Railway Safety (CMRS) have been carried out. The 5.39-km stretch with five stations forms part of the larger DN Nagar–Mandale corridor, designed to ease congestion and improve east–west connectivity. Passenger operations are expected by December 2025, with the full line slated for 2027. ..