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P. Manoj

New Delhi , Jan. 18

THE Shipping Ministry has decided to cut vessel-related charges for coastal ships by a further 10 per cent and extend the concession to coastal cargo/containers also.

As per the decision, the vessel-related charges for coastal vessels shall not exceed 60 per cent of the corresponding charges for foreign-going vessels.

Currently, the coastal vessel rates are prescribed at 70 per cent of the foreign-going vessel rates, which in other words imply a discount of 30 per cent. By pegging the vessel-related charges at 60 per cent of the foreign-going vessel rates, the discount is being raised from 30 per cent to 40 per cent.

The concession, which was so far limited to vessel-related charges for coastal vessels, will now be extended to coastal cargo/containers as well.

Accordingly, the cargo/container related charges for coastal cargo/containers other than thermal coal and POL including crude oil shall not exceed 60 per cent of the normal cargo/container-related charges, implying a discount of 40 per cent.

Besides, the vessel-related charges for coastal vessels will be de-linked from fluctuations in foreign exchange rates. The coastal vessel rates are prescribed in rupee terms whereas foreign-going vessel rates are denominated in dollar terms.

The new concessional vessel related charges for coastal vessels and cargo/container related charges for coastal cargo/containers have been endorsed by the Tariff Authority for Major Ports (TAMP) through a gazette notification issued on January 12 on the basis of a policy direction issued by the Shipping Ministry under Section 111 of the Major Port Trusts Act, 1963.

The new rates will come into force from February 1 at all the major ports and the private terminals at major ports.

"The coastal rates will not automatically increase on account of exchange rate variations. They are to be delinked from dollar denominated rates, if any, prescribed for other categories of vessels/containers. The charges for coastal cargo/containers and vessels shall be denominated and collected in Indian rupees", TAMP has said in its notification.

Cargo/container from a foreign port, which reaches an Indian port for subsequent transhipment to another Indian port, will also qualify for the concessional rates in relation to the charges relevant to its coastal voyage.

In other words, cargo/containers from/to Indian ports carried by vessels permitted to undertake coastal voyage will qualify for the concession.

However, the concession envisaged does not apply to the operations of loading/unloading on arrival/departure from/to a foreign port.

"The concessional cargo/container related charges will be levied only for handling the consignment in relation to its coastal voyage", says the tariff regulator.

Further, the concessional cargo related charges will be levied on all the relevant handling charges for ship-shore transfer and transfer from/to quay to/from storage yard including wharfage.

Whereas, the concessional container related charges is applicable on the composite box rate.

The new scheme is being introduced on a pilot basis for a period of two years.

"With the above concessions, more cargo is expected to be carried through the coastal route, thereby reducing congestion on the existing rail/road network," a Ministry official said.

Out of the total domestic cargo of 1,515 million tonnes moved during 2002-03, about 120 million tonnes was carried through coastal shipping, translating into a share of just 7 per cent. It is very low compared with the European Union, where coastal shipping has a 43 per cent share.

"Our goal should be to divert at least 5 per cent or 75 million tonnes per year of the cargo moved by rail and road as on today in the next 10 years. In addition to the incremental cargo of 100 million tonnes to be moved by coastal shipping, the share of coastal shipping should reach a level of 12-13 per cent of the total domestic cargo by 2012," the official said.

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