Date:27/04/2005 URL: http://www.thehindubusinessline.com/2005/04/27/stories/2005042701650700.htm

Back Experts call for TAMP expansion

Our Bureau

New Delhi , April 26

IN the backdrop of increasing private participation in the maritime sector, experts have called for wider regulations in the port sector. They also called for strengthening the Tariff Authority of Major Ports (TAMP).

"In principle, the Shipping Ministry agrees that TAMP's role should be expanded," said Mr D.T. Joseph, Secretary, Department of Shipping, at a seminar organised by the Confederation of Indian Industry.

However, on the issue of additional power to TAMP, he said, "Giving teeth legally can become an issue since it may lead to TAMP having parallel powers of a civil court."

"As we evolve towards competitive ports, there is a need to review rigid tariff regulation and check anti-competitive forces," said Mr A. Balasubramanian, Senior Vice-President, Infrastructure Development and Finance Corporation.

"TAMP may not be able to shoulder all responsibilities, thus some issues are best left to ports," he said.

The TAMP Chairman, Mr A.L. Bongirwar, said the regulatory body for the sector should have "clear, unambiguous objectives." He added the objectives should come in the form of an Act and that the regulator should be given powers to ensure its implementation.

Talking from the investor perspective, Mr H.R. Srinivasan, CEO, PSA India, said any operational strategy should protect the interest of consumers and ensure optimal utilisation of capacity and most efficient mobilisation of resources.

"When with an opportunity to invest in a terminal, investors seek an ability to predict future revenue accruals, expected levels of competition and demand," he said adding that tariff regulation is only a subset of regulatory mechanism.

He called for transparency, "especially in cross subsidy issues" and "the need to understand cost structure of ports."

Later, referring to a "recent 48-49 per cent revenue share bid," Mr Srinivasan said, "48-49 per cent revenue share is an untenable model unless there is cross subsidisation."

However, Mr Joseph, later said, "That operators are ready to shell out 48.99 per cent revenue share means they feel they are capable of sustaining operations at that level. In turn, it implies that margins are fairly high in the sector."