The Hindu Business Line : Chennai Port agrees to offer concession to Hyundai Motor

AFTER tough negotiations, Chennai Port Trust and Hyundai Motor India Ltd have agreed on the terms and conditions for concessional wharfage and marine charges for export of automobiles through the port for a period of 10 years.

Accordingly, Chennai Port Trust has agreed to re-fix the wharfage at a volume-linked telescopic concessional rate as a special case for facilitating export of completely built units (CBU) of Hyundai through the port.

Taking a base volume of 30,000 units in a calendar year, there will be no concession in wharfage for volumes of up to 30,000 units. Till this level, the wharfage will be as per the prevailing scale of rate of the port.

The wharfage rate will be 70 per cent of the prevailing scale of rate for volumes between 30,000 and 50,000 units, 50 per cent of the prevailing scale of rates for volumes between 50,001 and 70,000 units and 30 per cent of the prevailing scale of rates for volumes above 70,001 units, a Port Trust official said.

The throughput for the purpose of calculating the concessional tariff would be from January 1 to December 31 every year.

Moreover, the marine charges, as per the prevailing scale of rates of the port, will continue for up to 20 vessel calls per annum. For 21 to 30 vessels, the marine charges will be 75 per cent of the prevailing scale of rates and for more than 30 vessels, the marine charges will be 70 per cent of the prevailing scale of rates.

"The reduction in wharfage and marine charges were cleared by the Board of Trustees of Chennai Port Trust at a meeting held recently," the official said.

The approval of the Board of Trustees would pave the way for the Port Trust to sign a memorandum of understanding (MoU) with Hyundai Motor India Ltd for export of automobiles through the port for 10 years.

The discount agreed by the Port Trust with regard to notified marine charges will be credited to the accounts of Hyundai based on the vessel calls. The discount shall be extended based on the discount percentage applicable to the number of calls of vessels declared.

On completion of 20 vessels during each calendar year, the concessional marine charges would come into effect for each vessel as per the agreed formula and the credit accrued thereof will be adjusted against the wharfage charges on quarterly basis.

"This modus operandi would thus ensure that the benefit is passed on directly to Hyundai whose efforts have resulted in inducement of greater number of mainline Roll-On-Roll-Off vessels calling at the port," the official stated.

From 3,360 cars in the year 2000, Hyundai has increased its export of cars through Chennai port to 75,871 cars in 2004.

When the MoU comes into effect, the prevailing C&F levied at the rate of Rs 40 per tonne per car will be scrapped.

Currently, the Port Trust is levying wharfage on Hyundai at the rate of 0.3 per cent of the f.o.b. price per car as per the prevailing scale of rates on exports routed through the port. Hyundai had also sought concessions in the prevailing marine charges to attract additional vessel calls to the port.

"The sizes of Ro-Ro vessels are very high in gross registered tonnage as compared to the dead weight tonnes and the Port Trust is collecting the marine charges on GRT basis as per the scale of rates," the official said.

As per the proposed MoU, Hyundai has agreed to pursue its export/import activities in Pure Car Carriers and Pure Car and Truck Carriers and strive to facilitate the export of similar cargoes such as trucks manufactured by other automakers in such carriers.

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