Mumbai: PSA-Sical Terminals Ltd has resumed “normal operations deploying all the three quay cranes” from Thursday, 18 days after it reduced cargo handling capacity at its container terminal in Tuticorin port.
The decision to resume normal operations came after Eddie Teh, the group chief executive officer of Singapore government-owned PSA Corp., and Ashwin C. Muthiah, the vice-chairman of Sical Logistics Ltd, its local joint venture partner, met K. Suresh, the acting chairman of Tuticorin Port Trust, in Chennai to thrash out the issue.
“The meeting resolved that Tuticorin container terminal will go back to normal operation immediately deploying all the three quay cranes at its peak productivity,” said S.R. Ramakrishnan, managing director of PSA-Sical, which runs a 450,000 twenty-foot equivalent unit (TEU) capacity terminal at Tuticorin port.
One teu is the standard size of a container and is a common measure of capacity in the container business.
“PSA-Sical assures the shipping community that it will serve the export-import trade at full efficiency and reliability,” Ramakrishnan said.
“Notwithstanding the pendency of the issue before the Madras high court, all the parties shall work towards an amicable settlement in the overall interests of the trade,” said Suresh, the chairman of government-owned Chennai port, who is also holding additional charge of the Tuticorin port.
PSA-Sical had reduced capacity at the terminal by almost one-third from 15 July, in reaction to the tariff regulator’s refusal to allow it to raise charges for the services rendered.
The terminal, which handled 377,000TEU of cargo in the 12 months to March, decided to right-size its operations to meet its contractual commitment to the government of handling 300,000TEU a year. Consequently, from 15 July, PSA-Sical has been operating with only two quayside cranes as against the earlier three.
However, from 31 July, it had decided to restart the use of the third crane for ships of Bengal Tiger Line, its biggest customer at the Tuticorin port. The third crane will now be deployed for all the container ships calling at Tuticorin terminal.
A shipping ministry official said that PSA-Sical was “asked to resume normal operations as a precondition for starting a dialogue and arriving at a settlement on the vexed issue”.
Last year, PSA-Sical approached the Tariff Authority for Major Ports (TAMP), which sets prices for cargo handling at the 12 Union government-owned ports in the country, seeking an increase of around 30% on the Rs2,100 itwas charging per teu for its services.
TAMP responded by reducing the tariffs by around 54%.
PSA-Sical challenged this decision in the Madras high court and obtained a stay against the TAMP order. The case is before the court.
The company said the decision of the tariff regulator has made its operations commercially unviable. “The much reduced revenue per teu is not able to cover the cash operating expense and the royalty payment to the government,” the operator said in an earlier statement while announcing rationalization of services at the terminal from 15 July.