The Shipping Ministry has come out with new guidelines for determination of tariff for projects and major ports in the country. The simplified guidelines, which will come into force with immediate effect, are expected to pave way for increased investment flows into the port sector.

Beside providing for tariff to be indexed to inflation, the new norms also set out performance standards for port projects to improve accountability and ensure improved quality of service.

Announcing the guidelines in Mumbai recently, Union Minister for Shipping G K Vasan said, “The new guidelines allow the competitive market forces to play a greater role in tariff determination and impart flexibility.”

Under the new guidelines, the highest tariff for a commodity at a major port fixed under 2008 tariff guidelines, indexed to 60% of WPI would become the Reference Tariff on which the bidding would take place. The private operator under the new guidelines has the freedom to charge any amount up to a ceiling of 15% over and above the applicable indexed Reference Tariff for that financial year provided the operator has achieved the minimum performance standards as committed by him in the Concession Agreement.

The Ministry has set an ambitious target to award 30 port projects during 2013-14, which would add 288 million tons per annum (MTPA), with an investment of approximately `25,000 crore.

Important projects which will be covered under the new guidelines include: the 4th Container Terminal at JNPT, Container Terminal at Kandla, Diamond Harbour Container Terminal at Kolkata Port and Bulk Terminals in Paradip, Cochin and Mumbai Ports.

During 2012-13, the Ministry awarded 32 port projects at an estimated cost of `6,765 crore, entailing capacity an addition of 136 MTPA.

The projects already awarded will not be covered under the new guidelines. 2005 and 2008 guidelines shall continue to apply to projects bid under them, the Ministry said.