• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Amit Mitra

Mumbai , Oct. 22

SHOULD all non-tradable vessel-related charges at Indian major ports be reverted back to rupee terms from the existing dollar terms?

This question is increasingly doing the rounds in the Indian ports and shipping circles, especially in the light of the fact that the country's foreign exchange reserves have crossed the $90 billion mark and the exchange rate has become "steady and favourable".

Informed sources say that even the Tariff Authority for Major Ports (TAMP) feels that the question of whether vessel-related charges could again be denominated in Indian rupees needs to be considered. In fact, this issue forms part of the agenda for the on-going series of discussions TAMP is having with major ports, as part of its exercise to review and restructure the guidelines for tariff regulation.

It has been since 1991 that all trade dealings in major ports that involve direct or indirect link to foreign currency remittances were denominated in dollar terms, with the conversion done initially with reference to the exchange rate notified on June 30, 1991. "Now, with the country's foreign exchange position having undergone a sea change, the view that non-tradable services should not be denominated in foreign currency has been gaining currency of late," an industry analyst told Business Line.

As a fall-out of this debate, another question regarding prescribing of composite berth hire charge has cropped up. Actually, under the existing norms of composite berth hire charge, all berths having similar facilities would have the same rate. But, over the years, at some ports the same composite rate continues, even though facilities provided at the berth, especially in regard to the number and capacity of shore cranes and transit sheds, have drastically changed. "If the composite berth hire rate is to continue, there is a need to prescribe separate rates for berths having comparable facilities, especially number and capacity of cranes," according to the analysts.

The issue has acquired a new dimension in the wake of inadequacy of draft during the monsoon months at some ports due to seasonal silting. A section of port users across the country feel that the scheme of tariffs need to prescribe a lower rate for the monsoon months so that smaller vessels can be preferred during this period.

In fact, on the issue of composite berth hire charge, there has been a suggestion for "unbundling" of the composite charges. It was in 1986 that composite rates for certain essential inter-dependent services such as pilotage, towage, shore cranes and birth hire were introduced. This was done mainly to achieve a single window service — in other words, once the agent pays the hire charges in advance on the basis of the expected stay of his vessel, the prescribed number of crane shifts would be made available.

Sources say that this does not appear to have fully materialised at some ports. Thus, a question has arisen on whether the shore crane and pilotage & towage charges should be separated from the composite berth hire charge. "For example, a modern container vessel can come alongside the berth without the assistance of tugs or mooring launches. Therefore, the question of unbundling of composite charges should be examined from various perspectives," analysts point out.

Article E-Mail :: Comment :: Syndication

Stories in this Section
SriLankan keen on more flights to India

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line