Indian Planning Commission calls for cap on port handling fees

INDIA's Planning Commission is calling for a cap on container handling fees at the country's ports to end widely varying tariffs between ports and terminals within ports.

The recommendation was contained in a report by a task force on "Tariff Setting and Bidding Parameters for PPP [public-private-partnerships] Projects in Major Ports" drafted by Planning Commission members and others from the Shipping Ministry, Department of Economic Affairs and the Indian Ports Association, reports The Hindu's Business Line.

The Planning Commission said the wide variations in port tariffs may seem "irrational and unjustified."

At present, container handling fees at different ports are said to range from INR971 to INR3,540 (US$24 to US$90) per container. The Planning Commission found that at the port of JNPT, for example, the different terminals were charging between INR2,550 and INR3,540.

This is despite directives issued by the Shipping Ministry stating that the Tariff Authority for Major Ports set the tariffs for port terminals on a "cost-plus" basis, including an annual return of 15 per cent on capital employed, said the newspaper.