India’s Tariff Authority for Major Ports approved a 25 percent increase in tariffs levied by Indira Container Terminal, the private terminal operator in the Port of Mumbai.
The revised scale of rates, notified April 24, is scheduled to remain in effect until March 31, 2013.
“Over the past few years, ICT’s best throughput performance was in fiscal 2010-11 when the terminal handled 51,593 20-foot equivalent units. Even if ICT handles the same level of volume during 2012-13, our analysis shows that the cost position still warrants a 23 percent increase in existing tariffs,” the port regulator said in its order. “Since the traffic of 51,593 TEUs may not be achievable in 2012-13, the increase of 25 percent sought by ICT appears to be justified”.
The private operator in its submissions attributed the declining box volume trend to a lack of backup infrastructure, shallow draft and high port charges. TAMP in December last year allowed the port to hike its cargo related charges by 30 percent and marine dues by 23 percent as part of a general tariff revision, despite the protests of user associations.
The increases, which have substantially pushed up vessel operating costs, are likely to put considerable pressure on port-terminal management’s ongoing efforts to woo more mainline calls and boost throughput.
ICT, which took over operations at the port container terminal in July 2008, is building a $300 million offshore container terminal under a 30 year concession agreement with the port authority. The project offers an annual capacity of 800,000 TEUs in the initial phase and will help the port handle deep-draft vessels.
Mumbai’s container throughput fell 20 percent year-over-year to 58,000 TEUs in fiscal 2011-12 ended March 31, according to latest figures released by the Indian Ports Association.