The Hindu Business Line : Tariff authority okays 10 pc average hike at Chennai port

TARIFFS on cranage and wharfage at the recently privatised container terminal in Chennai Port will be hiked by 10 per cent on an average following an order passed by the Tariff Authority for Major Ports (TAMP) on Friday (March 15).

However, TAMP has notified that penal charges will henceforth be applicable only when a cargo is removed from the container and stored as cargo.

As a result, the tariff regulator has totally removed the existing penal charges on demurrage cargo at the container terminal.

The penal charges will now be applicable only on limited container load (LCL) cargo, which necessarily requires de-stuffing at the port. LCL means the importer shares the container with other importers.

LCL cargo will not attract any penal charges if it is not cleared within three days called free period. However, from the fourth day to the tenth day, such cargo will attract penal charges at the rate of Rs 50 per tonne per day and thereafter at Rs 100 per tonne per day.

So far, the penal charges ranged from Rs 15 to an upper limit of Rs 50 per tonne per day after the 10 free days.

The penal charges were in the form of cargo demurrage and container storage. The first one is paid directly by the importers while shipping lines pay the second charge, which in turn is collected from the importers. Effectively, the importers were required to pay both the charges - one directly the other indirectly.

In its tariff order notified on March 15, TAMP had also reduced the free period for moving the cargo from the existing 10 days to three days in line with a suggestion made by P&O Ports in its proposal submitted to the tariff regulator for revising the charges at the Chennai Container Terminal Ltd (CCTL), the sources said.

The Chennai Port Trust had allowed a free period of 10 days for clearing the cargo when it was operating the container terminal.

"Overruling the objection raised by the user groups, TAMP has cleared the tariff hike at the container terminal now run by P&O Ports India Ltd," Government sources said.

The new tariff order for the Chennai container terminal will come into force from the day it is notified, i.e., March 15.

For the first time in the history of TAMP, three hearings were held by the tariff regulator with the user groups before issuing the tariff notification.

The last tariff revision at the container terminal then operated by the Chennai Port Trust was approved in end-1999 and came into force in April 2000.

During the interactive meetings with TAMP, the user groups had opposed a hike in the tariffs at the container terminal.

The existing infrastructure and the existing committed volume of business were given to P&O Ports on a platter and hence a hike in tariffs was unwarranted, they had argued.

Though the equipments handed over to P&O Ports were old and archaic with resultant impact on the productivity at the privatised terminal, the user groups submitted before TAMP that there was no need for a tariff revision at the container terminal run by P&O Ports from day one.

"They can install new equipments, improve the performance and seek a revision after two years," the trade had noted during the hearings.

P&O Ports has already ordered new equipments to be installed at the Chennai container terminal from Germany's Noell. Some of these equipments are expected to arrive in September this year.

The private operator had submitted a tariff revision proposal before TAMP seeking a hike averaging 25 to 30 per cent in various services provided at the container terminal.

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