MINISTRY OF SHIPPING GOVERNMENT OF INDIA

PUBLICATION FOR COMMENTS: “GUIDELINES FOR

DETERMINATION OF TARIFF FOR THE SERVICES PROVIDED BY MAJOR PORT TRUSTS, 2014”

The above-mentioned draft Guidelines is hereby published for comments of all concerned. The comments on the draft Guidelines may be sent through E-mail/Fax/Post at the address given below, latest by 14th February, 2014. By Post Shri. Prasanth C Deputy Director Ministry of Shipping Room No. 535, Transport Bhawan Parliament Street New Delhi-110 001 Or By E-mail:

1. cbsingh@nic.in

2. dd.shipmin@gmail.com

Or By Fax: 91-011-2335 0649 91-011-2335 0648

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\\ D R A F T \\

Preamble

The market conditions for provision of port services have undergone

significant change since liberalization in the Port sector and expansion of port

infrastructure following the introduction of Public Private Partnerships at Major Ports

since 1996. Moreover, non-major ports have since expanded rapidly and now have

a substantial presence which accounts for about 42% of the cargo share. Further,

there is no parity in the regulation mechanism between the major port trusts and the

non-major ports. Whilst tariffs of Major Port Trusts are regulated following cost plus

return approach, non-major port trusts do not fall under tariff regulation. A need is,

therefore, felt to give flexibility to the Major Port Trusts to react to the market forces

and also to encourage Major Port Trusts for better performance within the ambit of

Major Port Trusts Act, 1963. Hence, the Government hereby issues the following

directions:

REVISED GUIDELINES FOR DETERMINATION OF TARIFF FOR MAJOR PORT TRUSTS

I. GENERAL

1. PRELIMINARY

1.1. These directions are issued to the Tariff Authority for Major Ports (the

“TAMP”) under Section 111 of the Major Port Trusts Act, 1963 as amended

from time to time (the “MPT Act”), for fixation of tariffs at Major Port Trusts to

which the provisions of the MPT Act apply or are extended (the “Port(s))”.

1.2. The directions may be called ‘Revised Guidelines for Determination of Tariff

for Major Ports, 2014 (the “Guidelines”).

1.3. These shall come into effect from the date of issue, and unless reviewed

earlier or extended by the TAMP, shall remain in force for a period of

5 years.

1.4. These shall apply to all the Major Port Trusts to whom the provisions of MPT

Act, 1963, as amended from time to time, are applicable or extended.

These guidelines are not applicable to BOT / BOOT operators or any other

arrangement for private sector participation who on the date of

implementation of these guidelines are covered under the tariff guidelines of

2005, 2008 or 2013 issued by the Ministry of Shipping.

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1.5. These Guidelines will generally apply, inter-alia, in respect of the following:

(i). regulation of tariff levied by the port for services rendered or facilities

provided as specified under section 48 of the MPT Act, 1963.

(ii). fixation of charges, under section 49 of the said Act, for the use of

properties belonging to, or in possession or occupation of, the port or

any place within the limits of the port or the port approaches. Fixation/

revision of tariff for port lands will continue to be governed by the

Land Policy Guidelines issued by the Government from time to time.

(iii). fixation of fees under Section 49(A) and 49(B), of the said Act, for

(pilotage, hauling, mooring, re-mooring, hooking and measuring and

other services rendered to the vessels) and (port dues on vessels

entering the port) respectively.

(iv). fixation, under Section 50 of the said Act, of consolidated Scale of

Rates for combination of services.

(v). prescription of the conditionalities governing application of the tariff/

charges/ fees/ dues.

1.6. Unless the context otherwise requires, various terms used herein will have

the same definition as in the MPT Act, 1963, and the Indian Ports Act, 1908,

as amended from time to time.

1.7. If any difficulty arises in giving effect to the Guidelines, the Central

Government may, in consultation with the TAMP, issue such orders, not

inconsistent with the basic features of the Guidelines, as may be necessary

for removing such difficulty.

1.8. The TAMP, for reasons to be recorded in writing, may relax application of

any of the provisions of these regulations to a port or group of ports, on its

own or on an application made before it by the concerned Major Port Trust.

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2. GUIDELINES FOR DETERMINATION OF TARIFF A. DETERMINATION OF BASE SCALE OF RATES AND REFERENCE

SCALE OF RATES

2.1. The Reference Scale of Rates (RSOR) for commodity/category of

commodities, containers, vessel related services and various miscellaneous

services or combination of services as the case may be, shall be notified by

TAMP for each Major Port Trust based on a proposal from the concerned

Major Port Trust. Such proposal shall contain the proposed Reference Scale

of Rates and “Performance Standards”.

2.2. For the purpose of proposing the Reference Scale of Rates referred as

RSOR hereinafter, the Major Port Trusts will first draw Base Scale of Rates

hereinafter referred as BSOR covering tariff for all cargo / commodity /

container handling services, vessel related services and miscellaneous

services other than estate related charges. The Major Port Trust shall draw

the BSOR so as to achieve the Average Revenue Requirement (ARR) as

explained in Clause 2.3 to 2.8.

2.3. Each Major Port Trust will assess the average Annual Revenue Requirement

(ARR) which is the average of the sum of Actual Expenditure as per the final

Audited Accounts (as explained at Clauses 2.4. and 2.5.) plus Return on

Capital Employed (as explained at 2.6 and 2.7) of the three years 2010-11

(Y1), 2011-12 (Y2) and 2012-13 (Y3).

2.4. Actual Expenditure will be the total expenditure as reflected in the final

Audited Annual Accounts of the Major Port Trusts, subject to following

adjustments:

(i). All expenses (operating, depreciation, overheads) relating to Estate

related activity to be excluded.

(ii). As regards expenses related to Railways, consider 60% of the net

expenses i.e. (operating expenses + depreciation + overheads

relating to Railway activity - the income from Railway activity). In

case income from Railway activity is more than the expenditure, entire

railway related expenses need not be considered in the ARR

calculations.

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(iii). As regards one-time expenses like arrears of wages, arrears of

pension/ gratuity, contribution to the Pension Fund for the Past

liability, ex-gratia payments etc., only one fifth of the expenses is to be

captured in the computation of ARR. (Regarding the current wage

revision, treatment to be given in ARR is prescribed in Clause 2.5.)

(iv). Exclude interest on loans.

(v). Port may consider either actual pension payment or contribution to

pension fund as an item of expense.

2.5. Expenditure for each of the three years 2010-11 (Y1), 2011-12 (Y2) and

2012-13 (Y3) to be determined in the above manner. Thereafter, simple

average of the expenditure may be worked out, as shown herewith

[(Y1 + Y2 + Y3) / 3]. The annual impact of wage revision after adjustment of

provision made, if any, to be added to the average expenditure so derived.

2.6. Capital Employed will comprise of Net Fixed assets plus capital work in

progress as on 31 March 2013 reported in the Audited Annual Accounts and

working capital as per norms prescribed in clause 2.6.1. The fixed assets

created from Escrow account is to be included.

2.6.1. Working capital will comprise of inventory, sundry debtors and cash

balances. Limit on inventory for capital spares will be one year’s average

consumption and in case of other items of inventory the limit will be six

months’ average consumption of stores excluding fuels. This, however, will

not be applicable for customized spares. Insurance spares shall be part of

the equipment procurement cost. Limit on sundry debtors balances will be

two months’ Estate income & Railway Terminal charges payable by Indian

Railways and the limit on cash balances will be one month’s cash expenses.

2.7. Return on Capital Employed including capital work-in-progress is at 16%.

2.8. The entire Royalty / Revenue share received by the Major Port Trusts to be

utilised by the port for creation and modernisation of infrastructure facility

within a period of 5 years.

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2.9.1. The ARR determined by the Major Port Trust as on 31 March 2013 as per

clause 2.3 is the ceiling Annual Revenue Requirement based on which the

Major Port Trust will draw the Base Scale of Rates (BSOR).

2.9.2. For drawing the BSOR, the traffic to be considered would be either the

actual overall traffic handled exclusively by the port for the year 2012-13 (Y3)

or average of the actual overall traffic handled exclusively by the port for the

three years 2010-11 (Y1), 2011-12 (Y2) and 2012-13(Y3) [(Y1+Y2+Y3)/3]

whichever is higher.

2.9.3. Based on the Annual Revenue Requirement as ascertained at Clause 2.3

above and taking into account the traffic as at Clause 2.8.2, the major port

trust will have the flexibility to adjust the existing rates subject to a maximum

tariff hike of 35% and draw the BSOR within the ceiling Annual Revenue

Requirement.

2.9.4. In this regard, the Major Port Trust will furnish a detailed working of income

estimation indicating each of the tariff items proposed in the BSOR,

corresponding traffic as in 2.9.2. and ascertain that the sum of revenue so

determined from all the tariff items in the BSOR is within the ceiling ARR

determined in clause 2.3.

2.9.5. While drawing up the proposed BSOR, Major Port Trusts shall do away with

advalorem wharfage rate if any, in the existing SOR of the concerned Major

Port Trusts and propose specific wharfage rate in these cases taking into

consideration special care to be taken for handling this cargo or a market

determined tariff.

2.9.6. While proposing the BSOR and RSOR, the Pension Fund Levy and the

Special Rate for Dredging, if any, approved in the (then) existing Scale of

Rate of the Major Port Trust which was with the intention of meeting one

time liability will be done away with. The Major Port Trust shall not propose

any such levy in its proposal for notification of RSOR proposal.

2.9.7. Tariff arrangement for existing captive berths / facilities where a separate

tariff arrangement is prescribed in the separate agreement entered into by

the port and the concerned user, it may continue to be governed by the

respective agreement.

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2.9.8. Except for the modification prescribed at clause 2.9.1. and 2.9.2., status quo

shall be maintained in the existing conditionalities prescribed in the SOR of

the respective major ports. If the port is of the view that any of the existing

conditionalities need to be modified due to operational or any other

contingency, the port may propose such modification giving sufficient

reasons and justification thereof and capture the financial / revenue impact, if

any, in the ARR.

2.9.9. From the Base Scale of Rates (BSOR), so derived by Major Port Trust as on

31 March 2013, the Major Port Trust will propose Reference Scale of Rates

(RSOR) indexing the BSOR by 100% of the WPI applicable for the year

2013-14 communicated by TAMP to the concerned Major Port Trusts.

B. PERFORMANCE STANDARDS OF MAJOR PORT TRUSTS

2.10. The Major Port Trusts shall also propose Performance Standards for cargo

related services in terms of average ship berth day output, average moves

per hour in case of container handling and for vessel side services, the port

shall propose Performance Standards in terms of average turnaround time of

vessels and any other parameters that is found relevant by the Port.

Performance Standards proposed by the Major Port Trust along with fixation

of RSOR should be in line with the targets agreed by the concerned Major

Port Trusts in the Result Framework Document (RFD) and the RFD

accepted by the Ministry of Shipping for the year 2013-14.

C. UNADJUSTED PAST PERIOD SURPLUS, PAST PERFORMANCE

ANALYSIS

2.11. The additional surplus assessed by TAMP in earlier tariff Orders which

remain unadjusted will be transferred by Major Port Trust to Pension Fund to

augment the shortfall in the Pension Fund if any. Else, the Major Port Trust

may transfer the unadjusted additional surplus assessed by TAMP to

General Reserve and use the funds for the purpose of development,

creation and/ or modernization of the port infrastructure facilities.

3. PROCEDURE FOR FILING AND PROCESSING THE PROPOSAL

3.1. The proposals for fixation of RSOR, along-with conditionalities governing

them, for services rendered or facilities provided as well as the charges for

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use of properties and assets and Performance Standards shall be

formulated, in accordance with these guidelines as amended from time to

time, in such formats with such supporting details as may be prescribed by

TAMP. Each Major Port Trust shall file the proposal latest by 1 January

2014 or four months prior to the expected date of implementation of RSOR.

3.2. The Major Port Trusts while filing the proposal for notification of RSOR along

with the proposed Performance Standard to TAMP shall simultaneously host

the entire proposal in its website giving the designated email address of Port

as well as TAMP for comments of relevant stakeholder / users within 30

days’ time.

3.3. The Major Port Trusts shall submit its comments on the comments received

from Port Users to TAMP not later than 15 days from the last date of receipts

of comments from the port users.

3.4. As part of the consultative process, if necessary, hearing/s of a case or

proposal will be organised, jointly with the port and users of the port, either at

the Office of the Authority or at the port for fixation of RSOR for the initial

time.

3.5. On receipt of comments/ views of Major Port Trust on comments of users,

TAMP will proceed to notify RSOR along with the conditionalities and the

Performance Standards for each Major Port Trust within 120 days of receipt

of the complete proposal in all respects from the Port Trust.

3.6. The normal consultative process shall not be followed in a tariff case which

is specifically required to be reviewed to implement the Central Government

policy directive issued under section 111 of the MPT Act. This would be

limited to such items/ part of tariff to which directive applies.

3.7. The rates approved by TAMP in RSOR will be ceiling levels; likewise rebates

and discount are floor levels.

3.8. TAMP will normally apply uniform norms, concepts, principles and approach

of tariff setting at all ports.

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3.9. Unless otherwise different arrangement is specifically mentioned in the

respective tariff orders, revised/ modified charges will come into effect after

expiry of 30 days from the date of gazette notification. In exceptional cases

retrospective effect may be given for reasons to be recorded.

3.10. After notification of RSOR, from second year onwards TAMP will not

entertain representations filed by individual users, unless it is regarding non-

achievement of Performance Standards by the concerned port trust.

4. DETERMINATION OF PERFORMANCE LINKED SCALE OF RATES

4.1. The RSOR approved by TAMP above shall be automatically revised every

year after applying an escalation factor to the extent of 100% of Wholesale

Price Index (WPI) per annum as applicable for the relevant year.

4.2. However, the Major Port Trusts would be free to propose a Performance

Linked Scale of Rates from the second year of notification of RSOR of over

and above the indexed RSOR for the relevant financial year if the concerned

Major Port Trust achieves the target of “Excellent” in the RFD accepted by

the port and the Ministry for the immediate previous year with reference to

the performance parameters agreed and accepted in the RFD of the relevant

year. The increase sought in the proposed performance linked Scale of

Rates shall, however, not be higher than 15% over and above the indexed

RSOR for that relevant financial year.

4.3. In this regard, the proposal shall be submitted by the concerned port trust at

least 3 months before the 1st April of the ensuing financial year, to TAMP

along with a copy of the RFD of the concerned port accepted by the Ministry

of Shipping which show that the targets relating to the Performance

Standards agreed by them and accepted by the Ministry of Shipping for the

immediate Previous year has been achieved in real terms and is ranked

“Excellent” on those performance parameters.

4.4. While forwarding the Performance Linked Tariff proposal to TAMP, the Major

Port Trust shall simultaneously host the proposal in its website giving the

details of designated e-mail address of the Port as well as of TAMP to which

the representations under Clause 4.5.1. below, may be sent.

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4.5.1. The Port Trust shall submit its comments on the representations received

from Port users to TAMP, not later than 15 days from the last date for receipt

of comments from the Port users.

4.5.2. Consultation with users prescribed under the clause 4.4 and comments of

the Port Trust on the representations received from port users prescribed in

clause 4.5.1. is applicable only with reference to the first Performance Linked

Tariff proposal filed by the Major Port Trust and not for the subsequent

period. Grievance Redressal mechanism prescribed under clause 5 will take

care of grievance, if any, of the users relating to non-achievement of the

Performance Standards of the Major Port Trusts for the subsequent years.

4.6. On receipt of the comments from the Major Port Trust, TAMP shall proceed

to notify the Performance Linked Tariff of that year. If the Port Trust does not

submit its response within the aforesaid period, TAMP shall proceed to

determine the acceptability or otherwise of the Performance Linked Tariff

proposal based on available details.

4.7. In the event of Major Port Trust does not achieve the target of “Excellent”

with reference to the Performance Standards as stipulated in clause 2.10 of

the guidelines verifiable in the RFD accepted by the Ministry in the

immediate previous year, TAMP will not consider the proposal for notifying

the Performance Linked Tariff for the ensuing financial year and the Major

Port Trust shall be entitled to only the indexed Reference SOR applicable for

the ensuing financial year

4.8. If TAMP is satisfied that the Major Port Trust has achieved “Excellent” with

respect to the Performance Standards as stipulated in clause 2.10 of the

guidelines verifiable in the RFD accepted by the Ministry of Shipping in the

immediate previous year, TAMP would notify the Performance Linked Tariff

by 15th of March to be effective from 1st of April of the ensuing financial

year.

4.9. The Performance Linked Tariff would come into force from the first day of the

following financial year and would be applicable for the entire financial year.

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5. GRIEVANCE REDRESSAL

5.1. In the event any user has any grievance regarding non-achievement by the

Major Port Trust of the Performance Standards as notified by the TAMP, he

may prefer a representation to TAMP which, thereafter, shall conduct an

inquiry into the representation and shall forward its findings to the concerned

Port Trust with a direction to comply with the Performance Standards as

notified by the TAMP.

6. MANDATORY DISCLOSURES BY MAJOR PORT TRUSTS

6.1. All the Major Port Trusts shall furnish to TAMP annual reports on cargo

traffic, ship berth day output, average turnaround time of ships, average

pre-berthing waiting time as well as the tariff realized for each of its berth. In

addition, for the container berths, annual reports shall also be provided on

average moves per crane hour and average dwell time for containers. The

annual reports shall be submitted by the Ports within 60 days following the

end of each of the year. Any other information which may be required by

TAMP shall also be furnished to them from time to time.

6.2. TAMP shall publish on its website all such information received from Major

Port Trusts. However, TAMP shall consider a request from any Major Port

Trust about not publishing certain data/information furnished which may be

commercially sensitive. Such requests should be accompanied by detailed

justification regarding the commercial sensitiveness of the data/information

in question and the likely adverse impact on their revenue/operation of upon

publication. TAMP’s decision in this regard would be final.

7. OTHER ASPECTS

7.1. The tariff proposal for fixation/ revision of rates received will be registered as

a case and examined by TAMP.

7.2. TAMP will maintain a list of organisations at each port to be consulted on

tariff proposals of that port. It will review and update the list from time to time,

in consultation with the port.

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7.3. TAMP will pass speaking orders which shall be published in the Official

Gazette as required under the MPT Act, 1963, as amended from time to

time. TAMP while notifying the RSOR will moderate the tariff increase, if any,

considered by the Major Port Trust in the BSOR over the existing rate if

increase exceeds 35%.

7.4. Users will not be required to pay charges for delays beyond a reasonable

level attributable to the port.

7.4.1. The rates prescribed in the Scale of Rates are ceiling levels; likewise,

rebates and discounts are floor levels. The ports may, if they so desire,

charge lower rates and/ or allow higher rebates and discounts.

7.4.2. The ports may also, if they so desire, rationalise the prescribed

conditionalities governing the application of rates prescribed in the Scale of

Rates if such rationalisation gives relief to the user in rate per unit and the

unit rates prescribed in the Scale of Rates do not exceed the ceiling level.

7.4.3. The ports should notify the public such lower rates and/ or rationalisation of

the conditionalities governing the application of such rates and continue to

notify the public any further changes in such lower rates and/ or in the

conditionalities governing the application of such rates provided the new

rates fixed shall not exceed the rates notified by the TAMP.

7.5.1. Whenever a specific tariff for a service/ cargo is not available in the RSOR,

of that particular port, the concerned Major Port Trust can approach TAMP

for fixation of tariff for the said new cargo/ equipment/ service adopting the

tariff and performance standards if any fixed for comparable cargo /

equipment / service in any other Major Port Trust. If there is no rate

available in any other Major Port Trust or if the rate available is not

representative enough of the proposed new cargo/ service/ facility then, the

port may file the proposal for new cargo/equipment/ service with reference to

optimal capacity assessed or a market based rate.

7.5.2. Proposal for fixation of rate for use of a new facility or a new service shall be

forwarded to the TAMP at least 3 months prior to the expected date of

commissioning of the new cargo facility or a new service. For determination

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of tariff for new cargo / new service, TAMP will follow normal consultation

process as prescribed.

7.5.3. Simultaneously with the submission of proposal, the proposed rate can be

levied on an ad hoc basis till the rate is finally notified.

7.5.4. The ad hoc rate to be operated in the interim period must be based on

optimal capacity of the cargo / facility and must be linked to Performance

Standards and it must be in consultation with the concerned user (s).

7.5.5. The final rate fixed by the TAMP for new cargo / service for which rate is not

prescribed in the RSOR will ordinarily be effective only prospectively. The

interim rate adopted in an ad hoc manner will be recognised as such unless

it is found to be excessive requiring some moderation retrospectively.

7.6. Users shall pay interest on delayed payments and the port shall pay interest

on delayed refunds at the same rate.

7.7. The rate of interest will be 2 % above the Prime Lending Rate of the State

Bank of India.

7.7.1. The delay in payments by user will be counted beyond 10 days after the

date of raising the bills. This provision will not apply to the case where

payment is to be made before availing of the services/ use of port properties

as stipulated in the MPT Act, 1963 and/ or prescribed as a condition in the

tariff.

7.7.2. The delay in refunds by the port will be counted beyond 20 days from the

date of completion of services or on production of all documents required

form the user, whichever is later.

7.7.3. All dollar denominated tariff will be recovered in Indian Rupees after

conversion of charges in dollar terms into its equivalent Indian Rupees at the

market buying rate notified by the Reserve Bank of India, State Bank of India

or its associates or any other Public Sector banks as may be specified from

time to time.

7.7.4. The day of entry of the vessel into port limits shall be reckoned as the day for

such conversion. In respect of charges on containers, the day of entry of the

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vessel in the case of import containers and the day of arrival of containers

into the port in the case of export containers shall be reckoned as the day for

such conversion.

7.7.5. A regular review of exchange rate shall be made once in 30 days from the

date of arrival in the cases of vessels staying in the port for longer period.

The basis of billing shall change prospectively with reference to the

appropriate exchange rate prevailing at the time of review.

8. REVIEW OF ORDERS

8.1. Application for review of any tariff order will be entertained to the limited

extent of errors apparent on the face of records considered in the relevant

proceedings, provided such an application is filed within 30 days of the

notification in the Official Gazette.

8.2. TAMP may, suo motu, review its orders, for good and sufficient reasons. In

such proceedings normal consultative process will be followed.

II. TECHNICAL

9. CARGO RELATED CHARGES. 9.1. Cargo-related charges shall continue to be denominated in Indian Rupee

terms.

9.2.1. Wharfage rates shall be on per unit of either weight or volume of cargo

handled than value thereof.

9.2.2. Before classifying any cargo under “unspecified” category under the

wharfage schedule, the relevant customs classification should be referred to

find out whether the cargo could be classified under any of the specific

categories mentioned in the wharfage schedule.

9.3. Concessional tariff will be prescribed for coastal cargoes/ containers, as per

the policy directions of the Government. It is prescribed that the cargo/

container related charges for all coastal cargo/ containers, other than

thermal coal and POL including crude oil, iron ore and iron ore pellets should

not exceed 60% of the normal cargo/ container related charges.

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9.4. Major ports will be encouraged to adopt sliding scale of rates to motivate

greater performance by bulk/ captive facility operators with a view to attract

additional cargo. Within the overall ceiling rates prescribed, ports can decide

such tariff scheme on non-discriminatory and objective basis. Tariff increase

elsewhere shall not be allowed to off set reduction in revenue, if any, arising

due to such volume discount schemes.

9.5. Demurrage/ storage charges free days allowed shall be exclusive of customs

notified holidays and port non-working days. The number of free days may,

however, be proposed by individual ports.

9.6. If operational area is leased on rental to users, storage charges on

containers/ demurrage on cargo stored therein shall not be levied again.

9.7.1. Charges for stevedoring activity undertaken, or for supply of on-board

labour, by ports will be included in the Scale of Rates of the port.

9.7.2. The rates for stevedoring, wherever undertaken by the port as a separate

activity, will be prescribed on per tonne basis. Where only on-board labour is

supplied, actual wages plus percentage levy will be prescribed. In either

case tariff will be linked to productivity.

9.7.3. In the wages plus percentage levy system piece-rate payments will also be

recovered in addition to actual wages plus percentage levy. Ports should

revise the datum and rates of piece-rate scheme from time to time in terms

of the National Wage Settlements and Manning Scale based on National

Tribunal Award.

10. CONTAINER RELATED CHARGES

10.1. Generally, a composite box-rate, at the option of the port, will be encouraged

for basic container handling services such as Ship-Shore transfer,

movement between berth and the yard and lift off/ lift on at the yard, with

rebate to be allowed when any of these services are not provided. Similar

approach will be extended in the case of ICD containers.

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10.2. Performance of stowage and lashing/ unlashing of containers would be

treated as essential part of operations in the interest of efficiency/safety.

Charges therefore can be levied by ports, if they provide the service.

10.3. Subject to segregation of cargo-related charges (which have to be

rupee-denominated) from the composite box rate, container-related charges

will continue to be dollar-denominated in the case of foreign-going vessels

and rupee denominated in the case of coastal vessels.

10.4. Charges for ship-shore handling and storage of loaded and empty

containers will continue to be the same and not different. However, higher

charges would be allowed for containers having hazardous goods, reefer

and for any special services.

10.5. While prescribing charges for different sizes of containers, the following ratio

will be maintained:

Charge Containers of

Length upto 20’

Containers of Length above

20’ but upto 40’

Containers of Length above

40’

Handling Charges X 1.5 X 2 X

Storage Charges Y 2 Y 3 Y

[Note: There is a request from trade to treat 22’ feet container at par 20’ Container for the purpose of levy of tariff. This point may be examined and deliberated by the Major Port Trust and MOS while issuing the revised guidelines.]

10.6. The handling charges for transhipment containers shall be concessional.

Such charges shall not exceed 1.5 times the handling charges for the normal

handling operation in loading or unloading cycle. In the case of transhipment

of coastal containers, the concession in handling charges prescribed above

shall be calculated with reference to the applicable handling charges (which

are subject to the concessions specified in clause 9.3 above) for coastal

containers for the normal handling operation in loading or unloading cycle.

Illustration

Let X be the handling charges for normal import or export containers and Y

be rate for similar operations in respect of coastal containers (where Y is

arrived at based on X after giving the concessions specified in clause 9.3

above).

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Handling charges for transhipment containers will not exceed 1.5X in case of

ex-im containers and 1.5 Y in case of coastal containers.

10.7.1.Wharfage on the containerised cargo should be a fixed lump-sum amount

per TEU without reference to individual classification in the wharfage

schedule.

10.7.2.Demurrage can be charged separately on containerised cargo in addition to

ground rent (storage charges) on loaded container, only if additional services

to such cargo are required to be provided.

10.8.1.Charges for power supply and monitoring of reefer containers will continue

to be dollar denominated and levied on 4–hourly unit to begin with instead of

per 8-hourly basis as at present.

10.8.2.Charges for other services to reefer containers shall be levied if the port has

rendered the service at the request of users.

10.8.3.Premium to the extent of 25% on handling and storage charges can be

levied in case of hazardous containers. For over dimensional container, the

storage charge shall be based on the actual number of ground slots the

respective container occupies.

10.9.1.Free dwell-time (storage) allowed shall be exclusive of Customs notified

holidays and port non-working days. The number of free days may, however,

be proposed by individual port.

10.9.2.Free dwell-time (storage) period for import containers shall commence from

the day after the day of landing of the container and for export containers the

free period shall commence from the time container enter the terminal.

10.9.3.The storage charges on abandoned FCL containers/ shipper owned

containers shall be levied upto the date of receipt of intimation of

abandonment in writing or 75 days from the day of landing of the container,

whichever is earlier subject to the following conditions:

(i). The consignee can issue a letter of abandonment at any time.

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(ii). If the consignee chooses not to issue such letter of abandonment, the

container Agent/ MLO can also issue abandonment letter subject to

the condition that,

(a). the Line shall resume custody of container along with cargo

and either take back it or remove it from the port premises; and

(b). the line shall pay all port charges accrued on the cargo and

container before resuming custody of the container.

(iii). The container Agent/ MLO shall observe the necessary formalities

and bear the cost of transportation and destuffing. In case of their

failure to take such action within the stipulated period, the storage

charge on container shall be continued to be levied till such time all

necessary actions are taken by the shipping lines for destuffing the

cargo.

(iv). Where the container is seized/ confiscated by the Custom Authorities

and the same cannot be de-stuffed within the prescribed time limit of

75 days, the storage charges will cease to apply from the day the

Custom order release of the cargo subject to lines observing the

necessary formalities and bearing the cost of transportation and

de-stuffing. Otherwise, seized/ confiscated containers should be

removed by the line/ consignee from the port premises to the

Customs bonded area and in that case the storage charge shall

cease to apply from the day of such removal.

11. VESSEL RELATED CHARGES.

11.1.1.Vessel-related charges for foreign-going vessels will continue to be

denominated in dollars and recovered in Indian rupees.

11.1.2.However, in case of coastal vessels the vessel related charges should not

exceed 60% of the corresponding charges for other vessels. Further, these

charges should be denominated and collected in Indian Rupees only and

restatement of coastal rates with reference to prevailing exchange rate at the

time of each general revision of Scale of Rates will not be resorted to.

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11.2. Status of a vessel as borne out by its certification is the relevant factor to

decide whether vessel is ‘foreign-going’ or ‘coastal’. Efforts will be made by

the Ministry of Shipping in consultation with Ministry of Finance [Deptt. Of

Revenue] to get the Customs Act amended for the purpose.

11.3. Reduced Gross Tonnage as per the International Tonnage Certificate will be

reckoned with for levy of port dues in case of oil tankers with segregated

ballast tank.

11.4. Pilotage-cum-towage fee will continue to be composite and shall include one

inward and one outward movement with required number of tugs/launches of

adequate capacity and shifting/s of vessels for ‘Port convenience.’ Only

shifting at the request of vessels will attract separate shifting charges.

11.5.1.Berth hire charges shall be prescribed by grouping berths having

comparable services/ facilities with rebate for major components of services/

facilities not provided.

11.5.2.Composite berth hire charges for general cargo or multi purpose berths will

continue to include charges for use of wharf cranes (other than special

purpose cranes/ handling systems) during the course of import/export

operations with a provision for grant of rebate if on any occasion no wharf

crane could be made available due to breakdown, planned maintenance, or

any other reason.

11.5.3.Unit for levy of berth hire charges as well as anchorage fee, mooring fee,

roadstead charges, etc. which are linked to the duration of stay of a vessel

shall be hourly.

11.6.1.Berth hire shall stop 4 hours after the time of the vessel signaling its

readiness to sail. The time limit prescribed for cessation of berth hire shall

exclude the ship’s waiting time for want of favorable tidal conditions or on

account of inclement weather or due to absence of night navigation facilities.

11.6.2.There shall be a penal berth hire equal to berth hire charges of one days

berth hire charge for a false signal.

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11.6.3.The Master/ Agents of the vessel shall signal readiness to sail only in

accordance with favourable weather conditions and tidal movements.

11.7. Objective criteria or loading/ unloading norms to be achieved shall be

specified failing which penal berth hire charges will become payable. The

norms will have to take into account cargo type, handling equipment and

other facilities at the berth.

11.8. Tariff will be linked to the benchmark levels of productivity. It may provide

incentive to the port for better performance and disincentive for performance

below the benchmark levels. While fixing such benchmark levels, local

factors relevant to the port and seasonal variations will be borne in mind.

11.9. Hire charges of equipment/ craft need not be specified individually for the

concerned equipment/ craft; they should be prescribed for a group of craft/

equipment based on different capacity ranges.

11.10. The unit for levying vessel related charges will be Gross Registered

Tonnage (GRT) of the concerned vessel. In case of port dues and berth

hire, there will be a single slab of GRT. Pilotage and shifting charges will be

prescribed in three slabs as mentioned below:

(1). Up to 30,000 GRT

(2). 30,001 to 60,000 GRT

(3). Above 60,000 GRT

A reduction of 20% on the unit rate of the first slab will be effected for the

second slab and a reduction of 30% on the unit rate of the first slab will be

effected for the third slab on the incremental GRT.

12. REGULATION OF CHARGES LEVIED BY OTHER AUTHORISED SERVICE PROVIDERS

12.1. Charges levied by various service providers authorised by the Major Port

Trust, under Section 42 (3) of the MPT Act, 1963, to provide port services

specified in clauses (a) to (e) of section 48 ibid shall be regulated by TAMP.

12.2. In cases where authorisation arrangement u/s 42(3) is other than by way of a

BOT concession agreement, ceiling rates will be prescribed for such

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services to be applied commonly at the concerned ports without reference to

individual service provider. For this purpose, proposals for regulating these

charges should be initiated by the concerned Major Port Trust after

identifying such authorised services coming under the ambit of tariff

regulation.

12.3. In the cases where TAMP has already prescribed ceiling rates for commonly

applicable for service providers authorised by Major Port Trust under Section

42(3) other than BOT arrangement, the tariff determined shall be subjected

to automatic indexation as prescribed in clause 4.1. of the guidelines.

12.4. In case there is no ceiling tariff prescribed in the concerned Major Port for a

particular service / facility under such arrangement, the port shall adopt the

tariff prescribed for the similar service/ facility prescribed in any other Major

Port Trust. If there is no tariff prescribed in any Major Port Trust or the rate

prescribed is not representative for the cargo/ service/ facility envisaged, the

Port Trust may file a proposal with reference to optimal capacity or based on

rated capacity with reference to the technical specification of the service/

facility/equipment. The proposal of Port Trust shall contain the Performance

Standards to be achieved by the service provider and tariff linked to

Performance Standards should be proposed.

12.5. The Port Trust concerned will ensure, by suitably including necessary

condition in the authorisation arrangement that the authorised service

providers do not charge more than the prescribed ceiling rates.

13. LEASE OF PROPERTY

Guidelines issued by Government in these matters from time to time will be

followed by TAMP.

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