The Hindu Business Line : TPT extends special rate to ships calling at Berth No. 8

SHIPS calling at Berth No.8 in Tuticorin Port will now have to pay a special rate for capital dredging of 30 per cent on all the applicable vessel related charges such as berth hire, pilotage fee and port dues to the Port Trust.

The Tariff Authority for Major Ports (TAMP) has approved the special rate for capital dredging at Berth No.8 through a Gazette Notification issued on May 21. The special rate for capital dredging would be implemented with retrospective effect from March 28, 2003 and the proceeds would be credited into a separate account maintained for capital dredging to be utilised for the sole purpose of servicing the Japanese yen loan taken by the Port Trust earlier to fund its capital dredging project.

A special rate for capital dredging of 30 per cent on all the applicable vessel related charges is already being levied by the Port Trust since 2000, with the approval of TAMP, on ships using the deep draft berths VOC III, VOC IV, Coal Jetty I, Coal Jetty II and the oil jetty to meet the debt servicing cost of the foreign currency loan.

This is now being extended to Berth No 8 (also a deep draft berth having a draft of 10.7 metres) though the dredging cost of Rs 45 crore incurred in this regard was not financed out of the foreign currency loan availed of by the port earlier, but from the internal resources.In fact, the tariff regulator has rejected the Port Trust's proposal to levy a special rate for capital dredging on ships using the Berth No 8 from the sole point of view of recovering the investment of Rs 45 crore made from its internal resources for dredging the berth.

According to TAMP, the basic rate should take care of this aspect.

"It has to be recognised that a special charge is generally considered by the Authority to recover any abnormal one-time liability which cannot be met from any other source so that such one time liabilities are not perpetuated in basic tariff. Investment from internal resources of a port will not qualify for such special treatment," the regulator has noted.

But, like the berths already subjected to the special charge, Berth No. 8 also fits into the definition of deep draft berths. The depth in the channel is definitely relevant to the vessels at Berth No.8 — one without the other may not be of any substantive significance to vessels.

Further, when ships calling at other deep draft berths pay for the debt servicing cost of capital dredging expenditure, it will give rise to an anomalous position if a similarly placed facility at Berth No.8 is excluded from the scope of the special charge, it explained.

TAMP also said that user organisations such as the Tuticorin Custom House Agents Association, Tuticorin Chamber of Commerce and Industry and Indian Chamber of Commerce and Industry have objected only to the retrospective application of the special charge and its quantum and not on the issue of extending the rate to Berth No.8 per se.

Users have demanded that the special rate be levied from October 2003 when the Berth No.8 was fully commissioned. But the Port Trust has argued that part of the berth was commissioned in February 2003 itself and vessels of 200 metres length overall (LOA) have berthed since then.

"As the facility was put into use since February 2003 and the Port Trust had proposed to levy the special charge retrospectively from March 2003, the proposal of the Port Trust cannot be negated," TAMP has ruled.