Policy shift in shipping tariff to hit Kochi port’s income

TIN news:   The Cochin Port Trust, which is still recovering from serious financial troubles over the past five years, has suffered a setback with the Union Ministry of Shipping deciding to keep in abeyance an order on dollar-linked coastal shipping tariffs.
The Union Shipping Ministry described the decision to keep the dollar-linked charges in abeyance till currency fluctuation issues are addressed as a reform measure to promote coastal shipping.
However, trade unions at the Kochi port here alleged that the move was aimed solely to help foreign vessels engaged in coastal cargo operations.
Trade union sources claimed that the Port Trust could lose up to Rs.12 crore a year in vessel-related charges on account of the shift.
For a port like Kochi which is struggling to make ends meet, the numbers mean trouble.
Austerity measures
The Port has gone through a period of austerity measures to surmount a shortage of money stemming from increased maintenance dredging costs combined with stagnation in cargo throughput.
Port trade union sources also claimed that dollar-related charges on coastal services was one of the reasons for the Port’s commendable performance during the last financial year, which ended on a high with a handsome operational surplus.
The Union Shipping Ministry maintains that promotion of coastal shipping is one of its major endeavours and that the scheme for concessions on coastal vessels and cargo/container related charges was revised in September 2015 in keeping with its aims.
Exchange fluctations
The revision provided for restatement of the rates for coastal service taking into account the exchange fluctuations of the Indian rupee against the U.S. currency so that the vessel-related charges for coastal services did not exceed 60 per cent of the corresponding charges for other vessels.
This was notified in by the Tariff Authority for Major Ports (TAMP)
But, later, TAMP pointed out that there was “steep increase in rates” of charges on coastal vessel/container services when compared to the pre-revised level at “a few ports”.
Hindrance
The situation had proved to be a hindrance to the Ministry’s intention to promote coastal shipping.
Therefore, the Ministry decided that the 2015 September instructions should be kept in abeyance.
The Tariff Authority for Major Ports has been directed by the Union Ministry to prescribe the coastal cargo/container-related charges for all major ports as well as the private operators.