PSA International cuts rates at Chennai terminal
Shipping container cargo through India's second biggest container port, located at Chennai, will cost less for exporters and importers after the port tariff regulator cut rates by 12.23 percent at the facility run by PSA International, reported The Mint.
PSA's facility is one of the two private container loading terminals operating at the Union government-controlled Chennai port.
PSA International had asked for a 15 percent raise on the US$61 it charges customers for handling a standard container at the terminal. A rate revision was required because the validity of the existing rates ended on 31 December.
PSA International, the world's second-biggest container port operator, is fully owned by Temasek Holdings, the sovereign wealth fund of Singapore.
"An estimated additional surplus of $17.4 million will accrue during the (new) tariff cycle, if the existing tariff is allowed to continue till 2014," Rani Jadhav, chairperson of the Tariff Authority for Major Ports (Tamp), wrote in an order notified in the gazette of India on 14 February.
"As there is no justification for giving any increase over the existing tariff, the proposal of Chennai International Terminals seeking an increase of 15 percent is rejected," Jadhav wrote in the order. "A reduction of 12.23 percent is effected across the board in the existing tariff as warranted by the estimated cost position."
The new rate will be valid till 31 December 2014. Chennai International Terminals, wholly owned by PSA International, handles more than 400,000 standard containers a year. By 2014, it plans to handle more than one million standard containers.
"The terminal would incur a loss on the basis of existing tariff," Chennai International Terminals said in its application seeking a rate hike of 15 percent. This is the second rate cut ordered by TAMP in the past few days at a container gateway in India.
On 8 February, India's port tariff regulator notified a rate cut of 44.28 percent at Gateway Terminals India, the container loading facility that is 74 percent owned by APM Terminals Management at Jawaharlal Nehru port near Mumbai, India's busiest container gateway.
Chennai International Terminals said volumes were growing steadily after it started operations in September 2009. But with three quay cranes and 10 rubber-tyred gantry cranes, the terminal is in a weak position to compete with other terminals in the region.
"Hence, for strategic reasons and for competitive edge, we are investing $50.26 million to install additional container-handling equipment, including four rail-mounted quay cranes and eight rubber-tyred gantry cranes," a spokesman for the terminal said. The additional equipment will be commissioned in the third quarter of this year, he added.
"By deploying additional equipment, we will ensure faster vessel turnaround as shipping lines seek to minimise the amount of time spent in ports and prefer ports with faster vessel turnaround time," the spokesman said.
PSA has invested about $121.77 million to build the new facility. The firm won the rights to build and operate the terminal for 30 years in a public auction in 2007.
PSA's facility is one of the two private container loading terminals operating at the Union government-controlled Chennai port.
PSA International had asked for a 15 percent raise on the US$61 it charges customers for handling a standard container at the terminal. A rate revision was required because the validity of the existing rates ended on 31 December.
PSA International, the world's second-biggest container port operator, is fully owned by Temasek Holdings, the sovereign wealth fund of Singapore.
"An estimated additional surplus of $17.4 million will accrue during the (new) tariff cycle, if the existing tariff is allowed to continue till 2014," Rani Jadhav, chairperson of the Tariff Authority for Major Ports (Tamp), wrote in an order notified in the gazette of India on 14 February.
"As there is no justification for giving any increase over the existing tariff, the proposal of Chennai International Terminals seeking an increase of 15 percent is rejected," Jadhav wrote in the order. "A reduction of 12.23 percent is effected across the board in the existing tariff as warranted by the estimated cost position."
The new rate will be valid till 31 December 2014. Chennai International Terminals, wholly owned by PSA International, handles more than 400,000 standard containers a year. By 2014, it plans to handle more than one million standard containers.
"The terminal would incur a loss on the basis of existing tariff," Chennai International Terminals said in its application seeking a rate hike of 15 percent. This is the second rate cut ordered by TAMP in the past few days at a container gateway in India.
On 8 February, India's port tariff regulator notified a rate cut of 44.28 percent at Gateway Terminals India, the container loading facility that is 74 percent owned by APM Terminals Management at Jawaharlal Nehru port near Mumbai, India's busiest container gateway.
Chennai International Terminals said volumes were growing steadily after it started operations in September 2009. But with three quay cranes and 10 rubber-tyred gantry cranes, the terminal is in a weak position to compete with other terminals in the region.
"Hence, for strategic reasons and for competitive edge, we are investing $50.26 million to install additional container-handling equipment, including four rail-mounted quay cranes and eight rubber-tyred gantry cranes," a spokesman for the terminal said. The additional equipment will be commissioned in the third quarter of this year, he added.
"By deploying additional equipment, we will ensure faster vessel turnaround as shipping lines seek to minimise the amount of time spent in ports and prefer ports with faster vessel turnaround time," the spokesman said.
PSA has invested about $121.77 million to build the new facility. The firm won the rights to build and operate the terminal for 30 years in a public auction in 2007.