The Hindu Business Line : Kochi port users turn down proposal to hike container tariffs

PORT users at Kochi have turned down the proposal of India Gateway Terminal Pvt Ltd (IGTPL) — a subsidiary floated by Dubai Ports International for container terminal operations in the port — to increase container handling tariffs in the terminal.

IGTPL had proposed a hike to the Tariff Authority for Major Ports (TAMP) in the range of 33 to 40 per cent for various activities, including the gantry crane, terminal handling operations and wharfage. TAMP had convened a meeting in the port last week in which all the port users rejected the proposal. TAMP officials, however, asked the terminal operator to justify the proposed hike and had also given IGTPL time till July 15 for formulising a revised proposal.

The Steamer Agents Association in the port said that there was no justification in demanding an increase and it would result in the diversion of cargo from Kochi to neighbouring ports. The members of the association pointed out that any increase in costs within 2-3 months of having taken over the terminal would send wrong signals to the shipping lines.

Currently, the handling charges in neighbouring Tuticorin Port is 20 per cent cheaper than the prevailing rates at Kochi. They said that the proposed increase by the terminal operator when compared with Tuticorin rates works out to be about 70 per cent higher and this would definitely result in the diversion of cargo.

As regards wharfage charges for laden containers, the association pointed out that the wharfage should not be applicable to transhipment boxes, as they are neither meant for export nor import and come under the composite rate without wharfage. According to the members, TAMP had even sought the comments of the association in this regard. Questioning the propriety behind the tariff hike move, the Cochin Chamber of Commerce stated that the proposal of the terminal operator should not be allowed and the existing rates should continue until a review is needed.

The chamber said that Kochi is already a high cost port when compared to other ports in South India and for these reasons, an attempt to increase the tariff was turned down by TAMP in 2004. The proposal, if implemented, would divert the captive cargo from Kochi and this would adversely affect the trade and industry in Kerala.

RGCT was taken over by IGTPL on April 1 and the proposal to enhance the tariff was too early and without any valid justification. During the takeover, the general impression of all the stakeholders was that the privatisation of the terminal would result in higher efficiency, which would, in turn, reduce the overall costs, the chamber said.

Rather than seeking an increase in tariff, the Container Shipping Lines Association (India) said that the IGTPL should focus on enhancing its revenues through productivity improvements, cost-saving measures, process re-engineering and re-deployment of direct labour.

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