Govt grants two-year extension to rate discount scheme for coastal vehicle carriers

In an effort to promote coastal shipping, the Shipping Ministry has allowed state-owned port trusts to extend by two years an 80 per cent discount in vessel-related charges and cargo-related charges given to roll-on-roll-off (Ro-Ro) ships that ferry cars and trucks along the coast.

The discount scheme, first introduced in September 2016, ended in September 2018, after a two-year run. The extended scheme will now be valid till January 2022.

“The Shipping Ministry has directed the major port trusts to extend the scheme by two years,” a ministry official said. The scheme will take effect 30 days after it is notified by the Tariff Authority for Major Ports (TAMP), the rate regulator for state-owned ports.

The discount in vessel-related and cargo-related charges for coastal transportation of vehicles through Ro-Ro ships, Ro-Pax, pure car carrier, pure car and truck carrier and pure truck carrier is in line with the ministry’s thrust to promote coastal shipping.

Vessel-related charges or marine charges include port dues, berth hire and pilotage.

The ministry is seeking to promote movement of cars and automobiles along the coast to tap a fuel efficient, cost-effective and environment-friendly mode of transport compared with road and rail.

As a step in this direction, in September 2015, the government allowed foreign registered Roll-On Roll-Off (RoRo), Hybrid Roll-on Roll-off (Hybrid Ro-Ro), Ro-Ro-cum-Passenger (Ro-Pax), Pure Car Carriers (PCC) and Pure Car and Truck Carriers (PCTC) to operate along the country’s coast by easing a so-called cabotage law, which allowed only Indian registered ships to carry cargo on local routes. The relaxation of the cabotage rule for these categories of ships will run through September 2020.

To make the discount sustainable for shipping service providers, the major port trusts have been asked to carry out intensive marketing for demand generation, he said.

Prior to September 2016, Ro-Ro vessels operating purely on local routes were allowed a discount of 40 per cent over that of the foreign going vessels, according to a government policy for coastal shipping.

With the increase in discount to 80 per cent, it is expected that shipping service providers will be able to attract more automobile cargo through the coastal route and decongest the already congested roads and railways. This will also make Ro-Ro ship service operations more sustainable.

If the Ro-Ro vessels carry other domestic cargo/containers, those will be entitled to a 40 per cent discount only, as per the policy, the official added.

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