Chennai International Terminals Private Ltd (CITPL), the second private container terminal at the Chennai port, will start operations with the prevailing rates tariff approved for DP World Chennai , the existing competing private operator. The new terminal is likely to commence operations next week.
TAMP rates
The Tariff Authority for Major Ports (TAMP), which fixes tariff at all the major ports, in its order said that the tariff fixation for CITPL was only an interim arrangement and valid till June 30, to enable the new operator start operations.
Thereafter, the final tariff based on CITPL’s projections will be accorded after due process of tariff fixation by TAMP.
The Chennai Port Trust (ChPT) has signed a concession agreement (CA) with CITPL to convert the existing facility into the second container terminal through private sector participation for a license period of 30 years.
CITPL is a joint venture between PSA International of Singapore and Sical Logistics of Chennai.
The planned terminal capacity is 1.05 million TEUs (20-foot equivalent units)
“As a measure of abundant caution, it is made clear that allowing the CITPL to levy tariff at the level of the existing scale of rates of Chennai Container Terminal (now called DP World Chennai) should not be construed as an incidental approval of pass through of royalty/revenue share payable by CITPL to ChPT.
“It should be noted that the licence agreement signed by CITPL with ChPT contains a specific provision relating to inadmissibility of revenue share in computation of tariff of CITPL,” the TAMP said in its order.
Existing tariff
According to the tariff guidelines of March 2005, when a new facility is commissioned or the existing facilities are privatised by any port trust, the initial tariff to be allowed will not exceed the existing tariff level at the same port for comparable facilities.
If the adoption of existing tariff of port trust will cause hardship to the operator, then a separate cost based tariff will be allowed to him right from the commencement of commercial operations.
“Despite the position that adoption of the existing tariff prevailing at CCTL will lead to loss, as reported by the operator, the CITPL has proposed that it may be allowed to levy the existing tariff prevailing at CCTL for the operations at CITPL as initial tariff,” TAMP said in its order.
TAMP rates
The Tariff Authority for Major Ports (TAMP), which fixes tariff at all the major ports, in its order said that the tariff fixation for CITPL was only an interim arrangement and valid till June 30, to enable the new operator start operations.
Thereafter, the final tariff based on CITPL’s projections will be accorded after due process of tariff fixation by TAMP.
The Chennai Port Trust (ChPT) has signed a concession agreement (CA) with CITPL to convert the existing facility into the second container terminal through private sector participation for a license period of 30 years.
CITPL is a joint venture between PSA International of Singapore and Sical Logistics of Chennai.
The planned terminal capacity is 1.05 million TEUs (20-foot equivalent units)
“As a measure of abundant caution, it is made clear that allowing the CITPL to levy tariff at the level of the existing scale of rates of Chennai Container Terminal (now called DP World Chennai) should not be construed as an incidental approval of pass through of royalty/revenue share payable by CITPL to ChPT.
“It should be noted that the licence agreement signed by CITPL with ChPT contains a specific provision relating to inadmissibility of revenue share in computation of tariff of CITPL,” the TAMP said in its order.
Existing tariff
According to the tariff guidelines of March 2005, when a new facility is commissioned or the existing facilities are privatised by any port trust, the initial tariff to be allowed will not exceed the existing tariff level at the same port for comparable facilities.
If the adoption of existing tariff of port trust will cause hardship to the operator, then a separate cost based tariff will be allowed to him right from the commencement of commercial operations.
“Despite the position that adoption of the existing tariff prevailing at CCTL will lead to loss, as reported by the operator, the CITPL has proposed that it may be allowed to levy the existing tariff prevailing at CCTL for the operations at CITPL as initial tariff,” TAMP said in its order.