Chennai container terminal's tariff hike plea rejected

The Tariff Authority for Major Ports (TAMP) has turned down the proposal of the Dubai Ports World-controlled container terminal at Chennai Port, the Chennai Container Terminal Ltd (CCTL), seeking 11 per cent upward revision of tariff. The TAMP is the tariff regulatory body of central government-owned major ports.

This would mean there will not be any increase in the tariff at the CCTL till December 2008. Senior TAMP official and CCTL executives confirmed the development. As a part of the privatisation policy, the government had given mandate to build, operate and transfer to P&O Ports (now owned by Dubai Ports) for 30 years.

The CCTL had earlier sought an increase of 18 per cent upward revision in its scale of rates charged at the terminal. The proposal for increase in tariff was submitted in the wake of Dubai Ports' rival company Port of Singapore Authority (PSA), along with Chennai-based Sical Logistics, bagging a Rs 500-crore second container terminal project at Chennai port.

"There could be a possible loss of volume with a new player coming at the port. The market is the same and the shipping lines are same. However, the TAMP turned down the increase in scale of rates," said a senior CCTL executive.

However, the TAMP said that the CCTL could submit review proposal much ahead of the predetermined schedule in case the traffic diversion was adversely impacting it owing to the second terminal.

"If there is any significant traffic diversion from the CCTL on account of commissioning of the second terminal, the terminal operator (CCTL) may, on or before 30 November 2008, apply to this Authority (TAMP) with relevant details for adjusting the tariff for the year 2009. The Authority will determine the quantum of revision in the tariff to be allowed," TAMP said, in its order.

The CCTL has handled 8,29,307 twenty foot equivalent units (TEUs) in the past financial year and is expecting to handle 9,14,00 TEUs in this fiscal. The second terminal of PSA-Sical at Chennai Port is likely to commence partial operations in January 2008, with full operations expected to start in July 2008.

Besides CCTL, Dubai Ports operates Nhava Sheva International Container Terminal (NSICT) at Jawaharlal Nehru Port Trust (JNPT), Mundra International Container Terminal (MICT) at Mundra (Gujarat), India Gateway Terminal (IGT) at Kochi Port and Vizag Container Terminal (VCTL) at Visakhapatnam Port.