As Chennai Port Trust hikes user-charges, trade in a tizzy

TE Raja Simhan Chennai | Updated on July 25, 2019

The Chennai Port Trust has proposed a 20 per cent increase in vessel-related charges for petroleum, oil and lubricants and crude vessels, and a 10 per cent increase for RoRo, passenger and non-cargo vessels (file photo)   -  Bijoy Ghosh

The port has hiked vessel-related charges by 10-20 per cent and marine charges by 20 per cent

The Chennai Port Trust (ChPT) has proposed a stiff increase in user charges for vessel, cargo and marine. This move has upset the trade which claims that with severe competition from neighbouring Kamarajar, Katuppalli and Krishnapatnam ports, the rates need to be reduced.

ChPT is looking into their concerns.

Its chairman P Raveendran said, “We are having consultations. We will address their concerns surely. We may consider some changes in our proposal after consultation if required.”

The ChPT has proposed a 20 per cent increase in vessel-related charges (VRC) for petroleum, oil and lubricants (POL) and crude vessels, and a 10 per cent increase for RoRo, passenger and non-cargo vessels. Charges for container and general cargo vessels have been left untouched.

It has also proposed 20 per cent increase in marine charges such as hire of tugs and mooring crew, according to Revision of Scale of Rates (SoR)-2019 circulated by ChPT to port users. The SoR is effected once in three years with the existing rate due for revision from April 1, 2019. However, the Tariff Authority for Major Ports (TAMP) had extended the validity up to August 30 or till the revision of SoR, whichever is earlier.

The Chennai & Ennore Ports Steamer Agents’ Association said the proposed VRC is very high, which will have a greater impact on owners/trade with freight levels yet to improve.

G Raghu Shankar, Chairman, Logistics Committee, Southern India Chamber of Commerce and Industry, said that the Chennai port (which in 2018-19 handled 53 million tonnes of cargo) for the first time is facing challenges from neighbouring facilities that are threatening to penetrate a monopoly enjoyed for a long time. It would have been a prudent business decision if ChPT proposed a scaling down of SoR for the time being though it may require large explanations internally to reach such a bold initiative, he said.

The increase in VRC for RoRo vessels means 14.26 per cent after considering WPI based escalation of 4.26 per cent effective May 1, 2019. This could literally drive away business, he said. Port dues, pilotage and berth hire will all go up by 14.46 per cent and the cumulative effective could be crippling to the industry. The auto sector is already facing tough challenges. The increase is ill timed, he added.

The proposed 10 per cent increase in cereal, pulses, sugar, food items needs a rethink as these are essential commodities with direct impact on inflation and economy, he said.


The ChPT has also proposed stevedoring and clearing and forwarding charges are for a ‘composite rate’ for on board labour of cargo in comparison with time-rate wages, general levy and piece rate presently being paid. In composite rate there is absolutely no incentive for the stevedore to achieve higher productivity, said Ishwar Achanta, President, Chennai Port Stevedores Association.

With many stevedores already having all in, annual, rate contracts, this is an abnormal hike, which no port in India must have proposed which no stevedore can afford to absorb, he said.

Published on July 25, 2019

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