Cargo terminals operated by private companies in major ports before the introduction of the Large Port Authorities Act in 2021 may soon be allowed to impose market-based tariffs for their services. The Ministry of Ports, Shipping and Waterways has convened a panel to examine whether older operators of public-private partnerships (PPP) for cargo terminals can switch to market-driven pricing, similar to the provisions of the new law for private cargo handlers after 2021.

The Major Port Authorities Act granted price freedom to the 11 administered ports and recently established private cargo terminals, abolishing the Tariff Authority for Major Ports (TAMP) which regulated state-run ports. However, the fate of existing private terminals remained uncertain until this development.

The panel, chaired by Sanjay Sethi, chair of the Jawaharlal Nehru Port Authority, is tasked with proposing guidelines for the migration process. This decision has long been awaited within the port sector, as it will ensure that older private operators can switch to market-driven prices without violating existing concession contracts.

A mechanism is envisaged whereby older terminals can levy market-driven tariffs, while the royalty or revenue share owed to port authorities would be based on these tariffs, taking into account the minimum guaranteed throughput (MGT) set out in contracts. This approach protects volumes and allows operators to apply market prices.

The move will level the playing field between large and non-large ports, encourage investment and revive stressed terminals. Transparency will be maintained through regular tariff updates on operators' websites and indexed market rates. By aligning all terminal operators, the ministry aims to create a coherent framework for sustainable growth in the sector.