India's top container terminals defy regulator, refuse to set lower rates

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INDIA's top three container terminals have defied the Tariff Authority for Major Ports (TAMP) regulator's order to cut rates by ignoring the deadline for their reduction, reports Live Mint-Wall Street Journal.

TAMP "notified" the rate cut of 44.2 per cent in February to be applied by Gateway Terminals India at Mumbai's JN port after the firm sought a rate hike of 8.7 per cent. Gateway Terminals is an Hague-based APM Terminals, a unit of Denmark's AP Moller Group, which also owns Maersk Line.

"We haven't yet started billing the new rates notified by TAMP," said a top executive at Nhava Sheva International Container Terminal (NSICT), the facility run by Dubai's DP World at Mumbai's Jawaharlal Nehru (JN) port.

One shipping agent told Live Mint that the terminals in an agreement with shipping lines, their main customers, not to charge them the lower rates and settle bills later. "The idea is to see if they can get a stay order from the courts. Then they need not apply the new rates," the agent said.

The issue puts the spotlight back on the powers of TAMP, the regulator for ports controlled by the government, but even an agency spokesman said: "TAMP has no powers to enforce its own orders."

In February, TAMP notified a rate reduction of 12.3 per cent at Chennai International Terminals when the terminal had asked for a hike of 15 per cent. Chennai International Terminals is owned by Singapore's PSA International.

At least three Mumbai-based executives from three shipping lines confirmed that they have not been billed the new rates, but declined to be named.

On March 23, the Delhi high court dismissed petitions filed by three terminal operators seeking a stay on the rate cuts ordered by TAMP on jurisdictional grounds. But the Delhi court told Gateway and NSICT to seek redress at the Mumbai high court and Chennai International Terminals were told to go to the Madras high court where their respective terminals are located.

Said a TAMP spokesman: "No courts in the country have granted any stay against the TAMP order to cut rates at these facilities. So the TAMP orders have come into effect as per dates specified in the gazette."

And that would be February 23 for Gateway, February 29 for Chennai International Terminals and March 16 for NSICT, he said.

PK Agrawal, chief executive officer of Gateway Terminals, did not respond to calls seeking comment and PSA declined to comment too, said Live Mint.

The Container Shipping Lines Association (CSLA) lobby group said: "We are recovering THC only on an actual basis. We are not making any money out of this. There is no profiteering going on."

Source Shipping Gazette - Daily Shipping News

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