In accordance with the provisions of Paragraph 144, " All ports are owned by the Government, but may be publicly or privately administered and operated. Foreign investment is allowed in port administration subject to conditions, which may be modified. "
Qn. Mexico wants to know what these conditions are and in what circumstances can they be modified?
Reply: It may be clarified that foreign investment is allowed in port operations and not in port administration, subject to the guidelines of Public Private Partnership (PPP) announced by the Government of India for major ports.
In fact, with the opening up of the Indian economy, the Government of India has allowed private sector participation in major ports to infuse funds, induct latest technology, improve management practices and above all addition of capacity. Foreign direct investment up to 100% is permitted for construction and maintenance of ports and harbours.
To encourage private sector participation, the Ministry of Shipping has already put in place guidelines for private sector participation. To ensure uniformity in bidding documents, model request for qualification (RFQ), request for proposal (RFP) and model concession agreement (MCA) documents have been standardized and adopted. The Government of India constituted Public Private Partnership Appraisal Committee (PPPAC) under the Chairmanship of Secretary, Department of Economic Affairs, Ministry of Finance to appraise the proposals under public private partnership (PPP) mode. The tariff setting mechanism has also been modified with tariffs being set upfront by the Tariff Authority for Major Ports (TAMP) before the projects are bid out on a revenue sharing basis. The PPP guidelines are subject to review and modifications in the future depending upon the changes in the port sector and economic condition of the country.
