Mumbai Port Permitted To Offer $ Tariff Dollars

In a significant ruling, the Tariff Authority for Major Ports (TAMP) has allowed the Mumbai Port Trust (MBPT) to denominate the tariff for cargo-related charges for containers in US dollars. The order is a major blow to local shippers as they had written to TAMP protesting against the port trusts' decision to denominate cargo- related tariff in dollars.

TAMP had stated in an order dated August 22, 1998, "The proposal of the Mumbai Port Trust for denomination in dollar terms of charges relating to various left over vessels related items is approved".

The ruling assumes importance in the wake of the Nhava - Sheva International Container Terminal (NSICT), too, seeking to link cargo-related tariff to the US dollar for its proposed container terminal at Jawaharlal Nehru Port near Mumbai. NSICT, promoted by global major P&O Australia Ports, has also written to TAMP seeking permission for a similar step. There are two kinds of charges in any port, namely vessel-related charges and cargo-related charges. The former has been traditionally denominated in US dollars, but collected in Indian rupees. The latter has always been denominated in Indian rupees except for dwell time charges, which are usually denominated in dollars.

 

A row broke out when MBPT, earlier this year, denominated the tariff for various cargo-related charges pertaining to containers in US dollars. This came into force with retrospective effect from September 10, 1997. The charges, which were notified include cargo container charges, charges for container handling equipment, charges for reefer points, rates for supply of port trust labour and drinking water. These charges have to be paid by shippers (exporters and importers) to shipping lines or MBPT.

MBPT had contended that some of the charges, which should have been classified as vessel related, were wrongly classified as cargo-related charges. Hence, it was seeking to correct a mistake through this exercise.

TAMP has, however, rejected the inclusion of containerised cargo as a vessel-related item. It has stated in its order, "The authority does not approve inclusion of 'containerised cargo' in the list of vessel related items".

The Western India Shippers Association (WISA) had argued in its submission to TAMP that it is wrong to classify these charges as vessel-related.

It had also pointed out that a high level committee of the former ministry of shipping & transport had pointed out in 1985 that these expenses are incurred in local currency and have to be recovered back only in the local currency.