India’s Tariff Authority for Major Ports ordered a 10-percent reduction in tariffs currently levied by Indira Container Terminal, the private terminal operator at the Port of Mumbai.
The ruling comes after the company filed an application with the port regulator for a 25-percent hike in rates, citing huge deficits.
The revised tariff scale, effective immediately through March 31, 2012, is expected to provide substantial savings to container lines serving the west coast hub.
“There is no justification in granting the proposed increase of 25 percent. On the contrary, the tariff is to be reduced for the relevant period to fit into the cost-plus method adopted,” the authority said.
The private operator took over operations at the existing container terminal in July 2008 under a license arrangement with port management, and was allowed to apply previously-approved rates until a new tariff revision.
The company said the global trade downturn adversely impacted volume moving through the western gateway, having handled just 27,000 20-foot equivalent units in the first year of operations compared with a minimum guaranteed throughput of 72,000 TEUs.
“Even after a 25-percent increase, we will not make any profit. It will be barely sufficient to cover our costs,” the company said in its submissions.
Indira, a joint venture between Gammon India and Dragados SPL of Spain, is developing a $300-million offshore container terminal at the port on a 30-year build-operate-transfer basis.
While Mumbai remains a major gateway for general cargo, its box traffic has seen sharp declines in recent years primarily due to inadequate infrastructure and shallow draft, and the management is hoping that the new facility will help it attract more mainline calls.
From April to January, volume dropped nearly 50 percent to 47,089 TEUs from 83,975 TEUs in the year-earlier period.
The ruling comes after the company filed an application with the port regulator for a 25-percent hike in rates, citing huge deficits.
The revised tariff scale, effective immediately through March 31, 2012, is expected to provide substantial savings to container lines serving the west coast hub.
“There is no justification in granting the proposed increase of 25 percent. On the contrary, the tariff is to be reduced for the relevant period to fit into the cost-plus method adopted,” the authority said.
The private operator took over operations at the existing container terminal in July 2008 under a license arrangement with port management, and was allowed to apply previously-approved rates until a new tariff revision.
The company said the global trade downturn adversely impacted volume moving through the western gateway, having handled just 27,000 20-foot equivalent units in the first year of operations compared with a minimum guaranteed throughput of 72,000 TEUs.
“Even after a 25-percent increase, we will not make any profit. It will be barely sufficient to cover our costs,” the company said in its submissions.
Indira, a joint venture between Gammon India and Dragados SPL of Spain, is developing a $300-million offshore container terminal at the port on a 30-year build-operate-transfer basis.
While Mumbai remains a major gateway for general cargo, its box traffic has seen sharp declines in recent years primarily due to inadequate infrastructure and shallow draft, and the management is hoping that the new facility will help it attract more mainline calls.
From April to January, volume dropped nearly 50 percent to 47,089 TEUs from 83,975 TEUs in the year-earlier period.