Trade bodies flay JNPT deal with Maersk-Concor

Trade bodies spearheaded by the Indian Merchants Chamber (IMC) have opposed the award of the contract to develop the third container terminal at the Jawaharlal Nehru Port Trust (JNPT) to a Maersk-Concor consortium.

The trade bodies contend that the move would lead to a monopoly situation for the consortium for 30 years.

The industry has jointly appealed to the Union minister of shipping, T R Baaloo, to reconsider the decision. Maersk is the world's largest shipping line and is also one of the world's premier container terminal operators.

Nanik Rupani, president, IMC, said at a press conference, on Monday, "The government seriously needs to reconsider this bid. They need to realise that with this 30-year concession agreement, Maersk will be the terminal operator and also the customer of this terminal. This can be exploited by Maersk to unfairly structure the new terminal tariff such that they pay the government an artificially lower royalty."

He added, "Traders and users will also feel the burden of higher costs resulting in losses of hundreds of crore of rupees to the government for the next three decades due to a monopolistic Maersk-Concor consortium."

"There is already evidence at Pipavav (a Maersk port) having the least pendency. There is no legitimate explanation for this. Also Concor, instead of focusing on issue like acute shortage of rail container handling capacity in this high-demand scenario, is increasingly getting into monopolistic deals," said, Mark Fernandes, chairman, logistics management & infrastructure (transport) committee, IMC.

He said, "Exporters/importers will be forced to use Maersk instead of other shipping lines as the only solution to ensure timely rail transit of cargo."

Further, S R L Narasimhan, general secretary, WISA, said, "JNPT having three container terminals between 600-700 metre length, will not contribute to being a hub-port.

This will jeopardise JNPT's advantage vis-à-vis other ports such as Colombo, Jebel Ali, Sallalah and Dubai which have berths above 1,500-2,000 million under single management control.

Moreover, Maersk is a privately held company and its stocks are not publicly quoted. This makes Maersk non-accountable to any regulatory authority. The government must rethink its decision as this mean a huge national risk for three decades."

The shipping fraternity fears that if the consortium of Maersk (the largest container shipping line in the world) and Concor (the monopolistic inland logistic provider of container movement) are given the control of the terminal operations and the transportations requirements, it will prove to be detrimental to the interest of the community and the consumers at large.

Apart from IMC, the Western India Shipping Association (WISA), Bombay Custom House Agents' Association (BCHAA) and shipping operators came together to voice their concerns on the government's decision of handing over the control of the JNPT container terminal to the Maersk-Concor consortium.

The industry is also considering the possibility of a delegation of trade bodies calling on the prime minister, the finance minister and the commerce minister.