The Hindu Business Line : Hike in Chennai box terminal service charges draws flak

USERS of Chennai port are against the tariff increase sought by Chennai Container Terminal Ltd for services provided by it. The hike is over 20 per cent, and does not include the 17 per cent interim increase that CCTL got from the Tariff Authority for Major Ports in November last year, according to an industry source.

On reefer connection charges, CCTL recommended a revised rate of $10.18 from $5.50 per eight-hour shift including plug-unplug, monitoring and electricity. The present recovery does not cater to even the variable costs towards electricity supplied by the Tamil Nadu Electricity Board, CCTL said.

At a hearing organised by the Tariff Authority for Major Ports (TAMP) here on Friday, the users pointed out that the hike was "unjustified", especially with trade on the increase.

When the Chennai Port Trust was handling the container terminal, they generated an annual profit of over Rs 50 crore for a few years out of the yearly 3.50 lakh TEUs (20-foot equivalent units) throughput.

The profit was after meeting expenses towards payment of idle wages, pension, gratuity and medical reimbursement. But, the private operator does not have any of these major expenses to incur, said the Southern India Chamber of Commerce and Industry in its presentation to the authority. The TAMP fixes tariff structures at the major ports.

Further, CCTL did not provide to the trade the cost formula for the increase. "This is the first time in the TAMP's history that cost formula has not been provided to the trade," said a source who attended the meeting.

Normally, every port trust in the country provides the formula on which the tariff was worked out. If CCTL does not reveal the formula, all the port trusts would do the same. "The trade would be left in the dark about the formula," the source said.

In its tariff revision submitted to the TAMP in December 2003, CCTL pointed out that the container traffic handledby it during 2002 was 3.95 lakh TEUs and it expected to end 2003 with 4.89 lakh TEUs, a 23.50 per cent increase. This increase, over and above the normal growth, registered at 12 per cent happened due to increase in port's efficiency resulting in bringing back traffic to Chennai from the Tuticorin and Kochi ports.

Keeping in view the present trend of 12 per cent growth rate and considering the fact that competition will be on the rise with new ports coming up, CCTL projected a growth rate of 13 per cent for 2004 and 10 per cent for 2005.

The port users on the other hand felt that CCTL's projections were lower than expected and that the terminal would handle more traffic.

An official of SICCI said that the ad hoc increase sought for by CCTL would adversely affect exporters. With the dollar rate coming down and the procurement usually happening in the beginning of the year, even a marginal hike would affect exporters, who would switch to the neighbouring ports.