Kolkata port eyes royalty floor for cargo handling

A six-member committee headed by the chairman of the Kochi port, Paul Antony, is likely to recommend regulation of shore handling operations at major ports but Kolkata has come up with its own solution for handling agents for dry bulk cargo.

The board of the Kolkata port has suggested a minimum royalty of 10.5 per cent on a proposed ceiling rate approved by the Tariff Authority for Major Ports (TAMP), the regulator for the 13 ports that are under the administrative control of the shipping ministry. The ceiling on the handling fee for dry bulk cargo has been fixed at Rs 119.48 a tonne. The fee could be levied by all the major ports, the committee has recommended.

In a complaint by Mansukh D Vasava, Lok Sabha member from Gujarat, it was alleged private handling agents are working at ports illegally in violation of the Major Port Trusts Act, 1963, charging shippers fees not approved by the government and not sharing revenues with the ports. Following this, the Prime Minister's Office had asked the shipping ministry to provide details of appointments of stevedores and the fees charged by them in all major ports. The Kolkata Port Trust, on the directions of the shipping ministry, has come up with its own solution for handling agents for dry bulk cargo. The board of the port has suggested a minimum royalty of 10.5 per cent on the ceiling rate approved by the TAMP. The port has laid out details of the bidding process, which will be based on the highest royalty shared through auction. This will be applicable to all firms willing to undertake shore handling of cargo with valid handling agency licence issued by the port trust.

The handling agents would be required to provide services including lateral transportation of cargo between jetty and storage area, loading of unshipped cargo, cleaning of berths, jetties, wharves, and removal of foreign materials like boulders and coal from empty wagons.

However, for the other 11 major ports, the committee constituted under the Indian Ports Association is not sure about charging royalty from shore handling agents. The committee is of the view this will increase costs, making the ports less competitive. The committee in its report has said even if royalty is not a cost item in the tariff, it will get factored in while doing business.

The committee has recommended that normative tariffs should be fixed for stevedores and shore handling agents, as required under the provisions of the Major Port Trusts Act, with provisions for accommodating port-specific differences. This tariff will be a ceiling rate within which competition can be brought in among different agents.