Logistics

JNPT brokers new deal for inter-terminal rail transfer of containers

P Manoj Mumbai | Updated on July 30, 2019 Published on July 30, 2019

All the five terminals at JNPT signed a new memorandum of understanding amongst themselves.   -  Bloomberg

PSA’s complaint with CCI against rivals becomes redundant

The controversy over inter-terminal rail handling operations at Jawaharlal Nehru Port Trust (JNPT) has been resolved with all the five terminals at India’s biggest container gateway signing a new memorandum of understanding amongst themselves.

The new MoU will render a complaint filed by Bharat Mumbai Container Terminals (BMCT), a new facility opened by Singapore’s PSA International Pte Ltd at JNPT in February 2018, with the Competition Commission of India (CCI) redundant. PSA alleged in its complaint that rival terminals run by Dubai’s DP World (Nhava Sheva International Container Terminal and Nhava Sheva (India) Gateway Terminal (NSIGT) and Denmark’s APM Terminals Management BV (Gateway Terminals India) were “collaborating” on creating cost barriers, prejudicing the interests of BMCT.

CCI probe

In a preliminary order on November 9, CCI decided to probe the case further. DP World filed a writ petition in the Bombay High Court seeking to stay the preliminary order of CCI. The High Court declined to stay the CCI probe and the petition will be next heard on August 6.

A PSA official told BusinessLine that it will inform the CCI that with the signing of the MoU, “there were no issues from this point on.”

The rail terminals of the older one are in a close proximity to each other, whereas BMCT rail lines are at an average distance of 5 km from others. “Hence, the additional cost factor due to the large distance was a major hindrance to the inter-terminal transfer between BMCT and other terminals. Hence, a new agreement was designed and agreed upon by all the terminals and will come into effect from August 1,” JNPT Chairman Sanjay Sethi, who brokered the new deal, said on Tuesday.

Charges will be levied on shipping lines as per the existing charges (₹400 per TEU) approved by the Tariff Authority for Major Ports (TAMP) in 2007 for such transfers under the new agreement also. Besides, BMCT will pay an extra ₹500 per TEU to other terminals to compensate for the extra trucking distance they undertake to fetch containers arriving at BMCT. “The new agreement will improve the competitiveness of JNPT terminals and so increase both rail utilisation and overall volumes,” a spokesman for BMCT said.

Inter-terminal transfer of containers

The feud between the top global container operators relates to the inter-terminal transfer of containers, a system that is unique to JNPT, whereby container train operators run mixed trains that carry boxes designated for more than one container terminal.

It is the responsibility of the other terminals to send their trailers to fetch the containers from the “handling terminal” and move it to their respective terminals for further loading onto ships, according to the arrangement mutually agreed by all the terminals before PSA started operations at JNPT. The same process is followed for the import cycle also.

In its complaint to CCI, BMCT said that containers arriving on mixed trains at railheads other than the one at BMCT but destined for BMCT, were not cleared and delivered by NSICT and GTI on the same terms on which containers destined for NSICT, NSIGT and GTI are cleared among themselves.

Likewise, containers arriving at BMCT’s railhead but destined for any other terminals are not collected by the other container terminal operators at all, in sharp contrast to how they collect, clear and deliver such containers amongst themselves.

Therefore, BMCT is constrained to use its own trailers at its own cost, to collect containers destined for BMCT and arriving at the railheads of other container terminals and to deliver containers destined for the other terminals and arriving at its railhead.

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Published on July 30, 2019
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