The Hindu Business Line : Tuticorin Port Trust gets TAMP nod to hike land lease rental

THE Tariff Authority of Major Ports (TAMP) has allowed the Tuticorin Port Trust (TPT) to increase annual lease rentals of the port land leased out to SPIC to Rs 708 a sq m from Rs 555.

The revision is with retrospective effect from January 1, 2002 and will be valid till December 31, 2006 the authority said in a recent order.

The TAMP, which fixes tariff for the country's major ports, said that the rental was due for revision in January 2002 itself.

But the port trust has delayed filing its proposal for revising lease rental by almost three years.

The port trust clarified to the authority that this delay was due to misplacement of the relevant file and requested it to condone the delay.

The authority suggested that the port trust enquire into the matter and take appropriate action against those responsible for misplacing the file.

SPIC was allotted the port's land measuring 2,325 sq m and 1,085 sq m in the VOC wharf on a 30-year lease.

In its submission to TAMP on the revision, SPIC said that the 28 per cent increase in the lease rent was exorbitant.

The Union Government controls the price of fertilisers and the difference between the cost of production and the selling price is being given as subsidy.

The price structure does not cover any change in lease rentals. Hence, the proposed increase will be a substantial burden on it. The company requested for consideration a five per cent increase in the lease rental once in five years.

In its reply the port trust said that the increase proposed in the lease rent was as per the conditions stipulated in the lease agreement entered into with SPIC. It was also in accordance with the orders passed by the TAMP in May 2000.

The port trust also said that the increase was not exorbitant. The lease rent was meant for the port's land used by the lessee.

Any upward or downward fluctuation in the market price of the commodities produced by the lessee was not a relevant parameter while considering revision of lease rentals, it added.

SPIC's request for five per cent increase in lease rent once in five years was not justifiable, according to the port trust.