The Hindu Business Line : ISPS code: Major ports may impose `security cess'

PORT users in the country may have to share part of the financial burden that implementation of the new International Ship and Port Facility Security (ISPS) code has placed on the major ports.

With the 12 major ports in the country close to receiving the ISPS compliance certificate, which will become mandatory from July 1, the ports are considering the option to impose a new surcharge, Security Cess, on their users to recover part of the costs incurred on implementation of the code.

Although a final proposal is yet to be drafted, industry sources say that imposition of the new surcharge is inevitable, given the significant investments that the ports have made to implement the code.

According to Capt. M.M. Saggi, Nautical Adviser to the Government, the 12 major ports had to invest about Rs 150 crore to implement the ISPS code, as outlined by the International Maritime Organisation (IMO), a specialised agency of the United National. "Apart from this, there will be an annual recurring expenses, as the ports would have to operate new facilities like water-side scanners, container scanners, which cost Rs 2 crore each, security cameras and explosive detection facilities as per the ISPS guidelines," he told Business Line.

The cost of implementation of the security code varies from port to port-- for example, in the case of JNPT, the cost is estimated to be about Rs. 15 crore, while for the other ports it will be lesser because of their size. For ships also the implementation cost will depend on the risk a ship carried (for example it is higher in the case of a LNG carrier) and the route that the vessel is plying. "Roughly, a ship would have to invest an average of $20,000 to implement the code," according to an official. As per the estimates worked out by the Organisation for Economic Cooperation and Development (OECD), the initial cost to implement the code on about 40,000 ships plying different on different routes will be about $1279 million, apart from a recurring expenditure of $ 730 per year.

India is one of the leading maritime countries where the ISPS certification process is nearing completion. The Directorate General of Shipping, which has been selected as the designated authority for implementation of the security code, has identified about 225 Indian flagged ships, including 175 foreign going, 12 major ports, 33 non-major ports and three ship repair yards in the country that would have to comply with the ISPS code.

The IMO had formulated the security code in the light of the increasing threat to ocean-going vessels in the form of mutiny, pilferage and thefts, illegal migrants and stowaways, piracy and armed robbery against ships, illicit drugs smuggling and terrorism.

The new code will be applicable to all passenger ships, high-speed pax crafts, cargo ships on international voyages and port facilities serving such ships. For implementation of the code, shipping companies will have to identify and train Company Security Officers, assess security requirement of ships, fit additional security equipment, prepare security plan for each ship and obtain plan approval from the respective governments. As for the ships, the Ship Security Assessment and Ship Security Programme () will have to be prepared and implemented, besides arranging for verification audit of the Ship Security Certificate (). As per the guidelines, the ports will have to assess threat and vulnerability of the facilities, obtain approval of assessment, prepare security plan and obtain statement of compliance before July 1.