3 southern ports may cut vessel rates

The government may reduce the vessel-related charges of container vessels handled by Tuticorin, Cochin and Chennai ports 70-75 per cent to bring them on a par with the Colombo port.

The shipping ministry, however, proposes to exclude feeder vessels from paying the lower tariffs in a new tariff order expected shortly. According to the estimate made by a committee for reviewing such charges, which submitted its report in March 2003, Colombo's vessel-related charge was $2.62 per 20 foot equivalent unit ( TEU), which was much lower than other ports in India. The TEU rate at Chennai is $ 8.86, at Tuticorin it is $11.23 and $9.87 at Cochin.

"The actual tariff structure is still being worked out but the aim is to make Indian ports more competitive vis-a-vis neighbouring ports and attract the transhipment traffic, which at present is routed through Colombo," a port official said.

The reason for excluding feeder vessels was that the ministry wanted to encourage more mother vessels to call on Indian ports, the official added. He said the traffic of feeder vessels in India was appreciable even at present rates.

The move assumes significance in face of the fact that Cochin is being developed as a transhipment hub and with lower vessel-related charges, the port will give serious competition to Colombo. The order will entail a 73.45 per cent cut in vessel-related charges for the port.

The cargo-related charges in India were much below that of the international ports but the total amount to be paid by liners was hiked by high vessel-related charges, a port official said. Such a cut in vessel-related charges will make India competitive in terms of total charges.