Date:24/08/2004 URL: http://www.thehindubusinessline.com/2004/08/24/stories/2004082401520900.htm

Back JNPT told to implement 10 pc cut in vessel-related charges

P. Manoj

"JNPT's arguments do not appear to affect its revenue position in the short term."

New Delhi , Aug. 23

THE Tariff Authority for Major Ports (TAMP) has ordered implementation of its earlier order issued on May 4 reducing the ceiling rates of all vessel related charges at the Jawaharlal Nehru Port Trust (JNPT) by 10 per cent.

Following a review petition filed by the port trust, TAMP had passed an order on June 11 to keep the operation of its May 4 order in abeyance subject to JNPT submitting a comprehensive proposal for review of tariff or at least a proposal for review of vessel related charges by July 15. In case, the port trust submitted a comprehensive proposal for tariff review, the portion relating to vessel related charges would be de-linked and taken up for consideration immediately, the regulator had said.

Responding to the TAMP order of June 11, the JNPT had filed a proposal seeking continuation of the existing tariff till a review was undertaken after the new guidelines for tariff fixation were finalised by the authority with the approval of the Shipping Ministry.

In its proposal, JNPT had calculated a purely terminal-based cost, excluding royalty/revenue share, vessel related charges and lease rentals accruing from its existing build, operate and transfer (BOT) contracts.

The JNPT has reiterated its view that BOT incomes should not form part of the operations of the port and should not be considered in the financial statements/cost calculations. But, TAMP has not accepted this view.

The decision to keep its earlier order in abeyance was taken primarily to take a re-look at the cost position to be furnished by JNPT along with its general revision proposal. However, the JNPT has not furnished the cost statements on the principles set by the authority. Besides, most of the arguments made by JNPT do not appear to affect its revenue position in the short term of one or two years, the regulator has said.

"In the absence of any well analysed cost position to show anything to the contrary, it may not be unreasonable to presume that the revenue/cost position reflected for the year 2003-04 (actuals) will not undergo any major change in the near future. There is no error in the earlier order of the authority reducing the vessel related charges by 10 per cent. The order of May 4 need not, therefore, be still kept in abeyance," TAMP said in an order passed on August 10, and notified in the Gazette on August 17.

In its order, TAMP has also extended the validity of the existing Scale of Rates other than vessel related charges of JNPT till March 31, 2005, and directed the port trust to file its revised proposal for general review of tariff by January 31, 2005.