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Rate revision in India delayed
2009/4/27
As the global recession hits cargo volumes, some of India''s dozen Union government-owned ports and private firms operating cargo handling terminals at these ports are seeking to delay tariff revision that was meant to be carried out in January, Mint reported.
Some of these ports are even exploring the option to withdraw rate revision applications filed with the Tariff Authority for Major Ports, the tariff regulator for such ports.
Tariffs are approved by the regulator for a three-year period. State-owned ports and private firms operating cargo berths at such ports are required to file revision applications at least three months before expiry of current tariffs. It takes the regulator four-five months to conclude the revision exercise.
But port officials say it is unreasonable to file for new rates now.
"The tariff, if decided at a time of economic turmoil, fluctuating foreign exchange rates and unpredictable volumes, will not reflect a true picture since the new rates have a validity of three years," said an official at Chennai port.
The dozen Union government ports handle close to 75 percent of India''s overseas cargo shipped by sea. In the fiscal year ended March 2009, these ports recorded a cargo volume of 530 million tonnes , a mere two percent increase from 519 million tonnes registered in the previous year. Some ports have even seen a decline in this fiscal.
State-owned ports also handle cargo at their respective ports in addition to private operators. Both argue that formulating a proposal has become difficult because they can no longer reasonably estimate volumes for the next three years. Guidelines say any request for extension of tariff validity will not be considered unless sufficient and justifiable reasons are given.
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2009/4/27