by JOC Staff | May 12, 2011 9:46AM EDT
India’s Tariff Authority for Major Ports ordered a 35-percent reduction in the scale of rates currently applied by Chennai Container Terminal, a DP World-managed facility.
The ruling comes after the company filed an application with the port regulator for a near 14-percent hike in rates, citing huge deficits.
The revised scale of rates notified May 5 will take effect after 15 days and remain in force until March 31, 2013.
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“According to our analysis, there is no case for granting any increase in the tariff as proposed by the terminal operator,” the regulator said in its order. “There is, in fact, a strong case to effect a reduction in the existing level of tariff mainly because of additional surplus accrued in the past.”
The company in its submissions said it invested considerable amounts of money to acquire new equipment, and requested efficiency gains achieved through productivity improvements be considered while fixing new rates.
Local shipping circles said the revised rate scale is expected to provide substantial savings to ocean carriers serving the southeastern hub, the country’s second-largest container gateway.
Chennai handled a record 1.52 million 20-foot equivalent units in fiscal 2010-11, which ended March 31, 2011, growing a robust 26 percent year-over-year. Volume in April totaled 134,000 TEUs, up 9 percent from 123,000 TEUs a year earlier.
To cope with projected growth in traffic volume, the port authority initiated a series of capacity and infrastructure improvement plans that include development of a 4 million TEU deep-water container terminal through private participation and an elevated expressway to speed the truck flow to and from its cargo terminals.