NEW DELHI, April 26: A specific implementation model for free ports in India has been modified by the Raunaq Singh Committee under the aegis of the ministry of commerce and new criteria for the selection of the locations has been added.According to the new criteria, the free ports can come up in a location where minimum port facilities exist. Secondly, it should be near a major shipping route, or be able to generate enough activities to justify a free port.
With this in mind the IIFT committee is considering some specific objectives. Accordingly four to five free ports have now been suggested for India. However, this was contrary to what the inter-ministerial committee's report which had suggested two free ports, one on the east coast and one on the west coast.
Specific types of free ports have been suggested in the modified model.
Free Port specialising in financial services. Port specialising in ship repair and maintenance services. Port specialising in trans-shipment services(as more than 50 per cent of Colombo port's business is because of the Indian goods). Port specialising in services like tourism, trading and related activities, besides other services like super-speciality hospitals, high tech education, software, etc. However this would not mean that the free ports cannot do other activities specified for them, the idea being to avoid overlapping.If five free ports are developed in India, then the costs will also be less as duplication of efforts will be avoided and the prevailing comparative advantages in specific ports can be used to the fullest extent. There would be enough activity for four to five free ports.
In India, the activities depend on domestic economy not merely on foreign business.
In fact, it has been pointed out, there is no need for the whole city or town to be a free port and only the port area and specific bonded areas needed for different activities can be part of the free port and the insulation as followed in the existing EPZs.
TheIIFT committee has identified the following locations to be developed as free ports:
Mormugao as a free port focussing on tourism and ship maintenance services. Nhava Sheva in Mumbai as a free port or offshore financial centre. New Mangalore port as a free port focussing on services including financial services, medical, software services and as a transit port. Tuticorin port to specialise in transshipment services. Vishakapatnam as a free port specialising in ship repairs and maintenance services.The committee has recommended that the jurisdiction of the free ports should be limited to the identified port only and the town or the city where such a port is located or is to be located.
It has been suggested that the free port should have a free port authority (FPA) with members from the central government, state government, port authorities, members from chambers of commerce and representatives from Reserve Bank of India.
Decision making should be left to the FPAwithin the given guidelines for the free port. Also, there should be a coordinating body between the different ports in India and that trade should be allowed between the free ports.
It has been pointed out that the identified locations should make intensive study on the type of activities in the different free ports that should be carried out alongwith the possible investors in these ports.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
