The Hindu Business Line : Port users oppose revision of rates in Kochi

Kochi, June 22 There is rising discontent among the shipping circles here over the proposal for an overall increase in scale of rates, saying that it would be detrimental to the interests of the port considering the overall economic slowdown being witnessed in the shipping sector.

This was evident at the joint hearing convened by Tariff Authority for Major Ports to determine the merits of the proposals to increase the rates.

The representative of Indian Ship Owners Association (INSA) pointed out that Kochi is one of the most expensive ports in the world by way of port cost. It is 600 per cent costlier than Colombo Port and 330 per cent over Dubai.

The port cost of a 1,200 teus with the recent revision is $19,000 at Kochi against $3,300 in Colombo and $5,700 in Jebel Ali. Compared to other west coast Indian ports, Kochi is 1.4-1.6 times higher.

Besides, ancillary charges for common user facilities are higher too, resulting in high operating costs. Considering all these factors, the proposal for increase is ill-timed. At a time when Kochi is gearing up to convert to an international container port, it would be sensible to reduce port and handling cost and improve operating efficiency, he added.

Voicing similar fears, Mr Satish Murti, President of Cochin Chamber of Commerce and Industry, said the scale of rates in the port has always been on the higher side compared to neighbouring ports and the port is known as one of the ‘more expensive ports’ with its several inherent problems. The existing tariff coupled with the tariff levied by the terminal operator IGTPL is acting as a disincentive to port users, he said.

With Vallarpadam project and other infrastructure projects nearing completion, it is imperative that the port projects itself as a cost-effective efficient port to attract business, he added.

Requesting TAMP to refrain from revising rates, the chamber President said the terminal operator in April 2005 enhanced the tariff by 16 per cent, which was implemented in two stages. This increase impacted the export-import trade. He cited that around 60 per cent of coffee, which used to move through Kochi is now being shipped via Mangalore and Chennai. Besides, around 30 to 40 per cent of the port’s import volume of raw cashew is now being diverted through Mangalore.

The chamber suggested that IGTPL focus on increasing their revenues by increasing the productivity levels coupled with adequate cost saving measures. They should focus on marketing the terminal to double throughput.

Referring to the proposal of the port, Mr Murti said the increase in the estate rentals are excessive and will affect the competitiveness of the business houses located on the Willingdon Island. At a time when the global economy is in the grip of an unprecedented recession, the chamber felt that the timing and extent of the proposed increase in rentals in the range of 148- 153 per cent is inopportune.

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