MARAD PROPOSES CHANGE IN SUBSIDY CALCULATIONS

MARAD PROPOSES CHANGE IN SUBSIDY CALCULATIONS

The Maritime Administration wants to change the method used in calculating operating subsidies paid to U.S.-flag shipping companies.

The agency said the change is needed because it was forced to recall its overseas representatives whose main duty was to report on foreign-flag shipping costs.The changes the agency proposes, published in the April 26 Federal Register, affect the cutoff dates for calculating the subsidies. Marad would, in effect, push the critical periods and dates back a year.

In working out the bulk carrier operating differential subsidies, Marad now estimates foreign wage costs as of Jan. 1 of the fiscal year for which subsidy is to be paid.

In converting those costs to U.S. dollars, the agency uses the average month-end exchange rates for July through January.

The change would simply move the base period for calculating foreign wage costs back a year and stretch the period for determining the appropriate foreign exchange conversion to a full year, July through June, straddling Jan. 1 in the year for which the subsidizes are to be paid.

Marad explained that without its foreign representatives, withdrawn late in 1987, it will take longer to obtain the needed foreign costs.

Marad asked comment on the proposed modifications by June 27.