The Tariff Authority for Major Ports (TAMP), which sets tariff at all major ports, has asked the Chennai Container Terminal Pvt Ltd (CCTPL), operated by the Dubai Port World at Chennai Port, to reduce tariff by 35 per cent. The order came in response to a proposal submitted by the terminal operator to increase the tariff by 13.77 per cent.
It may be noted that this is the first time in the history of TAMP that such a big quantum of reduction has been directed and it is also the first time that Chennai Terminal is faced with the reduction direction.
TAMP order dated May 5 said that the revised rates for the terminal, which have been notified already, would take effect after 15 days and would be force till March 31, 2013.
CCTPL has moved a proposal to the Authority seeking permission to increase the rate based on its performance. It stated that its productivity has increased in spite of the terminal operating at close to its capacity.
“This has been achieved by a combination of investments in new container handling equipments, improved terminal operating systems and a host of process reengineering activities,” said the terminal operator.
The terminal’s throughput has increased from around 829,000 TEUs in 2006 to around 1.19 million TEUs in 2008. Crane productivity has been improved from 22 moves per hour per quay crane in 2006 to over 27 in 2009.
In response to the proposal, the Authority in its order said: “In view of the surplus position as depicted in the cost statement, there is no case for granting any increase in tariff as proposed by the CCTPL. There is in fact a strong case to effect a reduction in the existing levels of tariff at CCTPL”.
The statement, which was in the TAMP order, showed that 2010-11 operating income was Rs 295.97 crore and in 2011-12 and 2012-13 expected to be Rs 296.53 crore and overall Rs 889.03 crore. The net surplus was Rs 32.81 crore in 2010-11, Rs 58.75 crore in 2011-12 and Rs 61.75 crore and total Rs 153.30 crore.
The net surplus available of Rs 153.30 crore is to be adjusted by effecting a reduction in the existing tariff over the remaining tariff validity period of two years (2011-12 and 2012-13), the order says.
While welcoming the order, the trade representatives have questioned whether this order would be applicable only to CCTPL or to the second terminal operator in the same port. “Otherwise, it leaves an uneven playing field,” said a senior trade representative.