PSA is planning to cut the throughput it handles at India's Tuticorin Container Terminal. This is due to a dispute with India's Tariff Authority for Major Ports, which wants to halve the port's revenues. PSA says this has made the terminal in the state of Tamil Nadu commercially unviable.
It is arguing that the reduced revenue it can charge shipping companies for each standard twenty foot container handled will not be able to cover the cash operating expense and the royalty payment for each box. For the year to March 2007, the port handled 377,000 standard containers.
This is 77,000 more than the annual minimum guaranteed throughput under PSA's terminal concession agreement.
PSA says it has no choice but to right-size its operations to match its concession commitment to the state government by handling 300,000 boxes a year. As a result, the port will be operating with two quayside cranes.
Some ships will likely experience a longer port stay as a consequence.
It is arguing that the reduced revenue it can charge shipping companies for each standard twenty foot container handled will not be able to cover the cash operating expense and the royalty payment for each box. For the year to March 2007, the port handled 377,000 standard containers.
This is 77,000 more than the annual minimum guaranteed throughput under PSA's terminal concession agreement.
PSA says it has no choice but to right-size its operations to match its concession commitment to the state government by handling 300,000 boxes a year. As a result, the port will be operating with two quayside cranes.
Some ships will likely experience a longer port stay as a consequence.