Logistics

Port tariff guidelines to stay for one more year

Mamuni Das New Delhi | Updated on April 18, 2011

Mr K. Mohandas





There will be no change in the norms to fix tariffs of terminals in major ports.

The Shipping Ministry has decided to extend the 2005 port tariff guidelines by one more year.

These guidelines – which were extended by a year on April 1, 2010 - lapsed on March 31, 2011.

The move will impact the terminal operators such as PSA Terminals, DP World and GTI, who had entered into concession agreements with port trusts before 2008.

The Shipping Ministry came with upfront tariff setting guidelines in 2008.

COMMITTEE

The Ministry had set up a committee to suggest changes in the guidelines.

“We have decided to extend the 2005 tariff guidelines by one more year. We will take a view after the committee submits its final recommendations,” Mr K Mohandas, Secretary, Shipping Ministry, told Business Line.

ISSUES

Port terminal operators had sought a review of some clauses of the 2005 tariff fixing guidelines of Tariff Authority of Major Ports (TAMP).

For instance, a clause specifies how tariffs will change in case actual traffic handled in a terminal is different from the initial projections.

In case, a terminal handles more traffic than initial projections, then the next round of tariffs will be revised downwards, says the clause.

The industry lobby body, Indian Private Ports and Terminals Association (IPPTA), had taken up this issue with the Ministry, saying that it guideline penalises efficiency of terminal operators.

However, changing this clause could imply increasing the revenue of terminal operators.

This makes the committee officials wary of suggesting any deviation.

IMPACT

Terminals that came up before 2008 could face the brunt of this clause whenever their tariffs are reviewed next.

Gateway Terminals of India (GTI), the container terminal operator at Jawaharlal Nehru Port, handled 1.85 million 20-feet equivalent unit (TEU) boxes in the last fiscal itself as against a projection of 1.58 million TEU for 2011.

This could mean lower tariff for GTI users with its new tariff slated to come into effect from January 1, 2012.

“We have had three set of guidelines for tariff fixation, each an improvement over the previous. We are all in a learning process,” Mr S.S. Kulkarni, Secretary General, IPPTA, said, indicating there is scope to incorporate changes in earlier guidelines.

Similarly, a section of Committee wants a change in the pre-2003 rules that allow royalty payout to port trusts as a pass through expense while fixing tariffs.

This is not acceptable to terminal operators who entered the sector in the pre-2003 tariff guideline regime.

> mamuni@thehindu.co.in

Published on April 18, 2011

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