BackForeign terminal operators may get rate hikes under new norms
The rate calculation exercise using the new formula will be applicable from the next rate revision cycle which has become due for all the five terminals
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Bengaluru: The chances of global container terminal operators winning rate hikes for their facilities operating in India’s state-owned ports have brightened after the government changed the way it calculates revenue earned in excess of estimates.
The main beneficiaries of the rule change will be five terminals run by APM Terminals Management BV, DP World Ltd and PSA International Pte Ltd at Jawaharlal Nehru Port, Chennai Port and VO Chidambaranar Port.
These five facilities loaded a combined 5.28 million twenty-foot equivalent units (TEUs) in the year to March 2015 or about 66% of the 7.96 million TEUs handled by all the 12 Union government-owned ports during the period. A TEU is the standard size of a container.
The rate calculation exercise using the new formula will be applicable from the next rate revision cycle which has become due for all the five terminals. The surplus calculated in the immediate preceding/last tariff cycle will also be reworked as per the new norms while deciding the next revisions, a spokesperson for the shipping ministry said.
On 8 February 2012,the Tariff Authority for Major Ports (TAMP) notified a rate cut of 44.28% at the facility run by Gateway Terminals India Pvt. Ltd at Jawarhalal Nehru Port after the firm sought an increase of 8.72%. Gateway Terminals is majority owned by Denmark’s APM Terminals Management.
A week later, the regulator notified a rate reduction of 12.23% at Chennai International Terminals Pvt. Ltd in Chennai Port when the terminal had asked for a hike of 15%. Chennai International Terminals is fully owned by Singapore’s PSA International.
On 1 March, TAMP notified a rate cut of 27.85% at Nhava Sheva International Container Terminal Pvt. Ltd, the facility run by Dubai’s DP World Ltd at Jawaharlal Nehru Port, when the firm asked for a 30% raise.
In May 2011, TAMP slashed rates by 35% at Chennai Container Terminal Ltd, the facility run by DP World at Chennai Port, after the firm asked for a hike of 16%.
While courts in their respective jurisdictions have stayed the rate cuts, the cases are yet to be decided.
The shipping ministry effected the change on the basis of advice given by attorney general Mukul Rohatgi, who said the calculation of surplus should kick in only when the actual earnings are in excess of 20% of the cargo volume estimates based on which the rates were drawn up by the rate regulator, the ministry spokesperson said.
“The new norms come as a big relief to terminal operators reeling under rate cuts effected in the past," said a top executive at one of the terminals operating in Chennai Port.
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