The Ministry of Shipping (MoS) of the Government of India proposes to introduce the Draft Central Port Authorities Bill, 2016 (Draft Bill) with a view to allow more autonomy and flexibility to port authorities of major ports in India and to bring about transparency and professionalism in their governance mechanisms. The Draft Bill seeks to replace the existing legislative framework as under the Major Port Trusts Act, 1963 (the Act) in order to bring about all such necessary amendments. In this regard, the MoS in its press release dated June 10, 2016 reports certain salient features of the Draft Bill in comparison with the Act, as follows:
(i) Simplification of Composition of the Board: The Draft Bill provides that the Board shall comprise of only 9 members, including independent members in comparison with 17 – 19 members of the trust under the Act, in order to simplify decision making processes and also to improve efficiency. The Board under the Draft Bill shall also comprise of 3 functional heads of major ports and shall include a government nominee member and a labour nominee member in order to provide proper representation from all stakeholders in the decision making process.
(ii) General provisions pertaining to the Board: The Draft Bill makes a distinction between 'port related use of land' and 'non – port related use of land'. It provides that the Board shall have the power to lease land for 'port related use of land' for up to 40 years and for 'non – port related use of land' for up to 20 years. Lease of land for periods of time beyond such threshold shall be subject to approval of the Government of India. The Draft Bill provides greater autonomy to the Board by empowering it to raise financing by way of loans, appoint consultants, execute contracts and create posts of service. The Board has been delegated power to raise finance and issue security for the purpose of meeting its capital expenditure and working capital requirements. The Draft Bill introduces the concepts of Corporate Social Responsibility (CSR), duties of the members of the Board, disqualification of the members of the Board and conduct of meetings of the Board through video – conferencing and other audio – visual procedures in keeping with the requirements of the Companies Act, 2013. The power of the Government of India to take over the control of the functions of the port authority has been limited to situations involving 'grave emergency' and in cases of repeated defaults by the Board in performance of its duties. Further, the port authority shall be deemed to be a 'local authority' within the meaning of such term under the General Clauses Act, 1897 so that it can prepare appropriate regulations.
(iii) Obligations of the Board: The Board has to maintain books of accounts and financial statements in accordance with the Companies Act, 2013 and / or rules as specified by the Government of India. The Draft Bill introduces the concept of internal audit of the activities of the Board in keeping with the requirements of the Companies Act, 2013.
(iv) Tariff Authority for Major Ports (TAMP): The Draft Bill removes the function of regulation of tariff by the TAMP as provided under the Act. In this regard, the Board shall be delegated the power to fix the scale of rates for service and assets. It also provides for creation of an independent review board, to perform the residual function of the TAMP under the Act i.e. to look into disputes between the ports and the public private partnerships (PPP) concessionaires, to review stressed PPP projects, suggest measures to revive such projects and to look into complaints regarding services rendered by the ports / private operators.
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