An Indian High Court of Appeals temporarily set aside a decision by port regulator Tariff Authority for major ports to reduce tariffs at the Chennai Container Terminal, a DP World-managed facility.
The interim court stay came in response to a petition filed by the private operator, challenging a 35-percent rate cut that was slated to take effect May 20 and remain in force until March 31, 2013.
“Until further notice from the terminal, DP World Chennai will continue invoicing our customers for services rendered at the terminal as per the scale of rates notified by TAMP in its order passed on June 19, 2008,” the company said in a trade notice.
DP World argued that a drastic reduction in current rates would make its operations commercially unviable, and a 13.77 percent rate hike that it had initially requested was necessary to offset huge deficits.
The port regulator in its ruling said there was a “strong” case to implement a reduction in previously-approved rates mainly in light of additional surplus accrued in the past. “The net available surplus of an estimated $34 million is to be adjusted by effecting in reduction in the existing tariff over the remaining tariff period of two years -- fiscal 2011-12 and 2012-13,” it said.
The Port of Chennai, India’s second-largest container gateway, has two container-handling facilities including the Chennai International Terminals operated by Singapore’s PSA International. The southeastern hub handled a record 1.52 million 20-foot equivalent units in fiscal 2010-11, which ended March 31, 2011, growing an impressive 26 percent year-over-year.
A planned 4-million-TEU deep-water facility, for which bidding is underway, will boost Chennai’s capacity to more than 6 million TEUs a year.
- The Journal of Commerce. HButler on 5/24/2011