Chennai International Terminal extends free storage time for DPD and DPE containers

P Manoj Mumbai | Updated on January 02, 2020 Published on January 02, 2020

Chennai International Terminal Pvt Ltd (CITPL), the facility run by Singapore’s PSA International Pte Ltd at Chennai Port, has extended the free time for storage of direct port delivery (DPD) and direct port entry (DPE) containers, in a bid to encourage cargo containers moving directly to and from factories.

The free storage time for DPD containers (imports) has been increased to five days from three days, while the free time for DPE containers (exports) has been extended to 15 days from seven days, CITPL said in a trade notice.

The change in the free storage period for DPD and DPE containers has been approved by the Tariff Authority for Major Ports (TAMP) and will take effect from January 24 and remain valid till August 2022.

The rate revisions approved by TAMP include a 12.5 per cent increase in terminal handling charges for dangerous goods and out of gauge containers to 37.5 per cent from 25 per cent.

Besides, the reefer monitoring charges and supply of electricity (including connection, disconnection, monitoring at reefer point) per container for a four-hour shift or part thereof has been increased by 10 per cent, the notice said.

CITPL’s rates will henceforth be worked out on the basis of new tariff setting guidelines framed by the Shipping Ministry in March 2019 for older build, operate and transfer (BOT) terminals at major port trusts.

Among the new rules, the most significant is to allow older cargo terminals to set rates for services to the extent needed to meet their annual revenue requirement (ARR).

The ARR (a cap) will be the average of actual expenditure for the past three years plus 16 per cent return on capital employed (ROCE).

The 16 per cent ROCE will be calculated on gross fixed assets - a departure from the earlier practice of computing the return on the net block of assets. It also includes capital work in progress and working capital.

The rate set by using the new guideline will be valid for three years and will be indexed annually to the wholesale price index (WPI), a measure of costs, to the extent of 60 per cent.

Under the earlier rate guideline, the returns of the terminal operating company diminished with each passing year due to depreciation, since it was worked out on the net block of assets. Servicing the royalty/ revenue share pay-outs to the port trusts in the face of declining returns had rendered their facilities unviable, the older terminals had argued, while lobbying for a change in the rules.

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Published on January 02, 2020
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