Kolkata Port Trust to impose royalty on cargo handlers

After deciding to claim damages from the Haldia Bulk Terminals (HBT), the Kolkata Port Trust is now planning to impose royalty on cargo service providers at the Haldia Dock Complex (HDC). With this move, the port authorities hope to overcome the losses it incurred due to the exit of ABG Haldia Bulk Terminals from berth No. 2 and 8 at HDC on October 28, a senior official told Business Standard.

The Kolkata Port Trust has also sought legal opinion on the matter before it sends the proposal to the shipping ministry for their consent, as mandated by the Major Port Trusts Act. “All tariffs have to be decided by the Tariff Authority for Major Ports (TAMP). Kolkata has had a major problem of expensive cargo handling due to the port’s riverine nature,” said K Mohandas, former shipping secretary.

The Kolkata Port Trust is in a tough financial situation with increase in expenditure and fall in cargo volumes due to economic slowdown. Its liability towards the pension fund alone is around Rs 3,200 crore. Currently, the handling agents do not have to pay any royalty to the Kolkata Port Trust, for the cargo handled by them. Without the consent of TAMP and the Central government, the Kolkata Port Trust cannot go ahead with its plan to levy any such charge.

Besides, the Kolkata Port Trust board is also likely to negotiate the issue of retrenched workforce at HBT-operated berths with the handling agents. According to people in the know, the port has negotiated a royalty of Rs 25 per metric tonne for the cargo handled, in case HBT is not operating at berths two and eight. The two berths were put up for bid in 2007 for providing on-board and on-shore services. ABG, which started cargo operations at the berth in September 2010, gave a termination notice to the port in October this year.

The Kolkata Port Trust has alleged that ABG illegally abandoned the terminal operations. In November, the port authorities had encashed the bank guarantee of Rs 4 crore provided by ABG at the time of signing the contract. The Port Trust had earlier refused ABG and its partner Louis Dreyfus to remove its equipment worth Rs 140 crore, including six cranes, 50 dumpers, 26 loaders and waybridges out of Haldia.

HBT — a joint venture between home-grown ABG Infralogistics and French Louis Dreyfus Armateurs — had pulled out of its 10-year contract for cargo handling operations, blaming political climate and “vested interest” by the port authorities.