The Hindu Business Line : Govt plans differential tariffs at ports to woo mainline vessels

THE Government is planning to put in place a series of steps to reduce India's dependence on neighbouring ports such as Colombo, Singapore, Dubai and Salalah for transhipment of in-bound and out-bound cargo.

"Transhipment of Indian cargo taking place outside the country at present will be encouraged to be handled at Indian ports through concerted measures.

"These include providing differential levels of tariff for different sizes of vessels or for different cargoes to attract mother ships to berth at Indian ports, rationalisation of port dues and increasing the draft available at Indian ports," says the draft note on the National Maritime Development Programme (NMDP) to be considered by the Union Cabinet shortly.

"The basic idea behind the plan is that mainline vessels should come to Indian ports and containers should go directly to final destinations without being transhipped," a top Ministry official said.

Transhipment of cargo outside India leads to delay in cargoes reaching their final destinations besides entailing extra costs, eroding India's competitiveness in global trade.

Conceding that the high incidence of vessel related charges at Indian ports (when compared with the neighbouring transhipment ports) was a big disincentive for mainline vessels to call here, the official said that differential tariffs were being proposed to reverse this trend and make it attractive for mother vessels to dock at Indian ports.

"The differential tariffs will depend upon the size of the container ships, cargoes and the next port of call," he noted.

As a first step in this direction, the Ministry had, through an order issued last year, directed the major ports of Tuticorin, Chennai and Kochi to cut their vessel related charges and bring them on a par with the rates prevailing at Colombo Port, which poses the maximum competition to these ports in terms of container traffic. The Ministry admits that in the short term, the reduction in rates may lead to some shortage of revenue.

"But later, it would encourage more and more shipping lines to call at these ports. It is expected that the costs to trade and industry will come down both in terms of reduced needs for transhipment and less ocean freight from Indian ports to destination ports," the official explained adding that this will be in the overall interests of the domestic industry and the consumers.

Similar reductions in the vessel related charges are being contemplated at other major ports such as JNPT, Mumbai, Kandla, Kolkata, Haldia and Visakhapatnam.

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