TAMP cuts 35% in Chennai Container Terminal tariff

T.E. Raja Simhan Chennai | Updated on May 11, 2011 Published on May 11, 2011

A view of the Chennai Container Terminal (CCTL) (file photo): Bijoy Ghosh


The users of Chennai Container Terminal Pvt Ltd now have a reason to rejoice. The Tariff Authority for Major Ports (TAMP) has effected an across-the-board 35 per cent reduction in the terminal's tariff.

This is in contrast to a 13.77 per cent hike that the private container terminal operator belonging to DP World, Dubai, had sought based on future container traffic projections and investment made so far.

“The reduction is definitely a welcome move that will make Indian products more competitive,” said a user.

On May 5, the TAMP, which sets tariff in all the major ports, notified the revised rates for the terminal.

The revised tariff takes effect after 15 days and will be in force till March 31, 2013, says the TAMP order.

In view of the surplus position as depicted in the cost statement (table), there is no case for granting any increase in tariff as proposed by the CCTPL. There is, in fact, a strong case to effect a reduction in the existing levels of tariff at CCTPL, which handled over one million twenty foot equivalent units in 2010.

A part of the additional past surplus represents the amount already collected in the past over and above the amount that should have been collected according to the ‘cost plus' approach. The adjustment of lease rentals allowed in the past from the Arbitration Award was confirmed by the High Court of Madras.

The net surplus available of Rs 153.30 crore is to be adjusted by effecting a reduction in the existing tariff over the remaining tariff validity period of two years (2011-12 and 2012-13), the order says.

tariff validity period

TAMP said that CCTPL's tariff was fixed relying on the information furnished by the operator and based on assumptions made in various analysis. If this Authority, at any time, during the prescribed tariff validity period, finds that the actual position varies substantially from the estimates considered or there is deviation from the assumptions accepted herein, this Authority may require CCTL to file a proposal ahead of the schedule to review its tariff and to set-off the advantage according to the revised tariff guidelines accrued on account of such variations in the revised tariff.

Tobacco fumigation

On request from a large tobacco exporter, the CCTPL has proposed to reduce the existing rate of Rs 2,200 per 40 ft container to facilitate fumigation of tobacco containers to Rs 1,000 per 40 ft container. The users have endorsed the proposal of CCTPL to have lower rates for fumigation of tobacco containers. The reduction in income on account of prescribing lower rate for fumigation is quantified at Rs 11 lakh per annum by CCTPL. TAMP approved the proposal of CCTPL.

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Published on May 11, 2011
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