Indian Ports Association - Private Participation FRAMEWORK

Guidelines to be followed by Major Port Trust for private participation in the major ports

General Tender Conditions and Procedure

Private participation will be on the basis of open competitive bidding.

The tenders would be based on two cover system consisting of technical and price bids. After the issue of tender document, the port may arrange one or more pre-bid conferences for clarifications, if necessary.

The tender document will not give any kind of guarantee for financial returns to the entrepreneur.

The tender document should provide that port property, if any, being transferred to the entrepreneur, will be kept insured at the cost of the private entrepreneur. The private entrepreneur would not be permitted to transfer asset by way of sublease, sale, sub-contract or any other method without the previous approval of the port. The investors will not be allowed to abandon the services abruptly or dispose off land, machinery and other assets or to convert them partly or fully into non-port use.

All the provisions of the Major Port Trusts Act 1963, Bye-Laws, Rules and Regulations made thereunder, any administrative or other directions given under the said Act, or the Scale of Rates or a statement of conditions prescribed under the said Act, the Customs Act, and the other statutory enactment's in relation to the port including labour laws shall be fully observed and complied with by the Iicensee, and the port shall be kept indemnified harmless all claims or demands in this behalf, including any claims from labour.

The projects to be implemented through private sector should be given as wide a publicity as possible through advertisement in the national dailies. A copy of such advertisements in respect of major project may also be sent to foreign Embassies/Consulates in India and may be given publicity in international journals.

The Tariff Regulatory Authority may fix a ceiling tariff and leave the private entrepreneur free to charge upto the ceiling at the rates to be notified by the entrepreneur. If the Tariff Regulatory Authority is satisfied, a suitable period increase(s) in tariff may be permitted on justified grounds. At the time of revision of tariff again the revised tariff would only be a ceiling, with the port and the entrepreneur haring the freedom to charge below that tariff.

Environment clearance and other statutory clearance for privatisation project would be obtained by the Port Trust or entrepreneur depending on the project and requirement.

Where Central/State Public Sector Undertakings are port based industries and wish to create port facilities for their own captive use. they may be treated under the guidelines for port based industries. Other Central/State PSUs who wish to create ort facilities as a common user facility and not for their own captive use need to come through the tendering route at par with private entrepreneur. However, Public Sector oil units would be treated as being portspecific for the purpose of allowing them captive facilities and captive oil jetties/SBMs without recourse to the tender procedure.

Approval of the Central Government would be taken wherever necessary under Major Port Trusts Act, 1963.

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