Shipping Minister Nitin Gadkari never misses a chance to highlight the need to reduce India’s high logistics costs at every fora, but his Ministry appears to be looking in the other direction.
At the behest of the Ministry, the Tariff Authority for Major Ports (TAMP), has approved levy of Rs. 145 per container by all major port trusts and private operators therein as user charges towards Logistics Data Bank Services (LDBS) rendered by the Delhi-Mumbai Industrial Corridor Development Corporation Ltd (DMIDC).
The move will be an additional cost to the exporters and importers.
The 12 major port trusts handled a combined 9.135 million twenty-foot equivalents (TEUs) in FY18.
LDBS is designed to track movement of containers across the ports to the inland container depots (ICDs) and the end users. It was developed by DMIDC to integrate information available with various agencies across the supply chain to provide detailed real time information within a single window. The project is intended to provide near real time visibility of the container movement across the supply chain, thereby streamlining the container logistic movement.
Transhipment and coastal containers are, however, exempted from the levy.
Jawaharlal Nehru Port Trust (JNPT), India’s busiest container port, and its private terminal operators are already collecting such a user charge from 2016 at the rate of Rs. 145 per container. This levy is now being extended to other ports controlled by the Central government.
Since the levy is for the service/ facilities provided by the DMICDC, the major port trusts and private terminals operating therein would only be acting as the “collection agents” on behalf of the DMICDC. “Thus, levy of mandatory user charges (MUC) shall not result in additional revenue to the major port trusts and private terminals operating thereat and shall not put them in an advantageous position. Also, since no revenue is being generated on this account to the private terminals, no royalty/ revenue share shall be payable by the private terminals to their respective landlord ports, on this item,” TAMP wrote in the gazette notification.
Five per cent of the total MUC shall be passed on to the major port trusts and the BOT terminals operating thereat for collecting the MUC, according to the rate regulator for the major port trusts. The user fee of Rs. 145 per container prescribed by the regulator is the ceiling rate.
“The major port trusts and the private terminals operating thereat have the liberty to charge lower rates in consultation with DMICDC,” the rate regulator said.