Shippers Oppose Dollar Tariff For Jnpt Terminal

Shippers in the western region have written to the Tariff Authority on Major Ports (TAMP) opposing the the move by Nhava Sheva International Container Teminal (NSICT) to link the tariff for its Jawaharlal Nehru Port Trust (JNPT) project to the US dollar.

NSICT promoted by global major P&O Australia Ports is constructing an over Rs 700 crore container terminal at JNP, near Mumbai. It has written to TAMP that it be allowed to link the entire tariff to the US dollar. Two trade organisations Indian Merchants Chamber (IMC) and Western Indian Shippers Association (WISA) which represent the shippers have written separately to TAMP in response to NSICt's move. Shippers will be NSICT's customers.

 

There are two components to the tariff charged at any port. These are vessel related charges and cargo related charges. While, vessel related charges are generally dollar denominated but collected in Indian rupees, cargo related charges are denominated in rupees.

Shippers (exporters and importers) have no objection to the vessel related charges being denominated in dollars but object to the cargo related charges being denominated in dollars as well. They contend that the JNP tariff which forms the basis of the tariff to be charged by NSICT does not provide for denomination of cargo related chrages in dollar terms.

JNPT too runs a container terminal adjacent to proposed NSICT one. "The cost of all the services to be provided by NSICT for which cargo related charges will be collected will be in rupees.There is no justification for the entire tariff to be denominated in dollar terms," says S R L Narasimhan, secretary of WISA.

NSICT has stated that shippers currently pay dollar denominared tariff at Mumbai Port for which they have no objection. It has also contested the shippers contention that none of the services for which cargo charges are collected involve a foreign exchange component. "Dwell time (storage) charges has always been charged in US dollars.The equipment used for handling cargo like gantry cranes are not locally manufactured and have to be imported. This constitutes a major expenditure in dollars," NSICT has stated.

Narasimhan contends that the Mumbai Port case is an aberration and cannot be used as a benchmark. A decision from TAMP on the controversial issue is expected. By end Septemeber, 1998. NSICT has written to TAMP at the insistence of the financial arranger to the project, HSBC, which feels that this will facilitate raising of lonas for the project.