India’s Tariff Authority for Major Ports ordered a 12.23 percent reduction in tariffs levied by Chennai International Terminals, a PSA International facility.
The decision came after the private terminal operator filed an application with the port regulator for a 15 percent hike in rates, as part of a general tariff revision.
“According to our analysis, an estimated additional surplus of $17 million will accrue during the tariff cycle if the existing tariff is allowed to continue till 2014. As there is no justification for giving any increase over the existing tariff, the proposal of CIT is rejected and a reduction of 12.23 percent effected across-the-board as warranted by the estimated cost position,” the authority said.
The revised tariff scale, which is expected to provide substantial savings to container carriers calling at Chennai, would remain in force until December 2014.
CIT is Chennai’s second box facility with an annual throughput capacity of 1.5 million 20-foot equivalent units. The terminal recently took delivery of four ship-to-shore quay cranes and eight rubber tired gantry cranes, bringing the total number of QCs to seven and RTGs to 18. The new cranes are expected to be in operation from May onwards, officials said.
The authority earlier ordered DP World-managed Chennai Container Terminal to cut rates by 35 percent but the Dubai-based company succeeded in obtaining a ruling in its favor from the local High Court to temporarily set aside the tariff revision.
Chennai, struggling in recent weeks to clear up a container backlog, handled 1.56 million TEUs in fiscal 2011-12 ended March 31, up from 1.52 million TEUs the previous year.