Govt moots EoI system for allotting captive cargo berths

The shipping ministry plans to do away with the current practice of nominations and introduce a system of expression of interests (EoIs) for allotment of captive berths for cargo handling. The ministry is in the process of altering its captive port policy to establish the right price discovery mechanism for dedicating port berths to industries for exclusive operations.

The policy has been in place since 1996 and essentially provides for exclusive berthing facilities for industries, like iron ore handling for steel units, coal for thermal power companies, among others.

Speaking on the matter, a senior ministry official said on condition of anonymity, “We have initiated the process of modifying the policy to bring in more transparency. Draft amendments to the policy will be in place soon and we may then take it up to the Cabinet for approval.”

Explaining what the ministry seeks to attain from the policy, the official said, “As of now the guidelines are very vague. We need to have very concrete price discovery mechanisms. One of the plans is to prefer inviting EoIs from interested parties than going through nominations prevalent now because we also need to be conscious about the fact that there might be a number of parties interested in the dedicated berthing facility. This will lead to right price discovery as well.”

Even though the ministry has embarked on a mega public-private partnership (PPP) drive, envisaging awarding of port projects worth Rs3 lakh crore in the next 10 years as per its ‘Vision 2020’, it still finds a reason in awarding berths for exclusive operations. “A PPP operator will do it for everybody. But if thermal power industries, steel industries, or crude oil-based industries handle their own cargo, we get a guaranteed throughput,” the official said.

In another policy initiative, the government is planning to pen regulations to weed out restrictive trade practices in the shipping sector, especially containerised cargo. All these guidelines are proposed to be part of a Shipping Trade Practices Act, which the ministry is formulating currently. The move will check the shipping lines forming a cartel jeopardising the cargo movers.