Hyundai signs pact with Chennai port

Hyundai Motor India Ltd (HMIL) has signed a 12-year concession agreement with the Chennai Port Trust (ChPT) to extend its relationship in exporting cars from the port.

The agreement was signed to mark the 125th anniversary of the port starting operations in the presence of Tamil Nadu chief minister M Karunanidhi.

As per the MoU, ChPT will give concessions to Hyundai Motor India in wharfage rate, vessel-related charges and carrying and forwarding levy charges from the port until 2018, depending on the number of cars exported in the financial year.

HMIL has consented to export its completely built units (CBUs) manufactured at its plants in Tamil Nadu as well as other HMIL plants in the ChPT hinterland for a period of 12 financial years.

HS Lheem, managing director, HMIL, said the company had so far exported over 3 lakh cars from India and was looking at increasing its export obligations considerably over the years when its second plant would become operational in 2007.

"A mutually beneficial agreement with the port trust will not only help us reduce our export costs, but also give reasonable returns to the port given the number of cars we export every year," he said.

As per the agreement, HMIL will pay as less as 10 per cent of the port's scale of rates if the number of cars handled at the port in a financial year exceeds the 1.5-lakh mark.

The wharfage concessions will be: 50 per cent of the port's scale of rates for volumes between 30,000 units and 50,000 units; 40 per cent for units between 50,001 and 70,000; 30 per cent for units between 70,001 and1 lakh; and, 20 per cent for units between 100,001 and 1,50,000.

There will be no concession if the number of cars handled in a financial year is less than 30,000. ChPT has also agreed to provide concessions in vessel-related charges to HMIL for vessels exclusively carrying HMIL-built CBUs for exports.

For anywhere between 21 and 30 port calls and cumulative gross registered tonnage (GRT) of between 10,00001 and 15,00000, HMIL will pay 75 per cent of the port's scale of rates; 70 per cent of port dues for the 31st to 40th port calls and cumulative GRT of between 15,00001 and 20,00000; 65 per cent of port dues and berth higher charges in addition to 70 per cent of pilotage for port calls between 41 and 50 times and cumulative GRT of between 20,00001 and 25,00000; and, 60 per cent of port dues and berth hire charges in addition to 70 per cent of pilotage for port calls between 51 and 60 times involving cumulative GRT of 25,00001 and above.

ChPT will also set up a multi-level car parking facility inside the port area.