THE GAZETTE OF INDIA

EXTRAORDINARY

|PARI III—SEC 4|

SCHEDULE

Case No. TAMP/106/2000-COPT

The Cochin Port Trust (COPT)

...

Applicant

O R D E R

(Passed on this 5th day of January 2001)

This case relates to a proposal from the Cochin Port Trust (COPT) on

rationalisation, amendments / additionts to its Scale of Rates.

The present Scale of Rates of the COPT was notified in January 1999. While

compiling the same many terms and conditions which existed in the previous Scale of Rates

were simplified and incorporated While implementing the present Scale of Rates, however, the

COPT has found that 3ome of the clauses are vague and leave scope for different

interpretations. Accordingly, the COPT Board at its meeting dated 30 August 2000 resolved to

make the amendments/additions in the Scale of Rates to clarify some of the existing provisions

The proposals of the COPT and the circumstances warranting such

amendments, as is brought out by the COPT, are given below.

(j),

(a).

In page No.24 of the present Scale of Rates under the clause 3 - "Berth

Hire Charges", it is indicated that the Defence vessels occupying a berth

and requesting to keep the adjacent berth or berths vacant shall be

charged additional berths hire charges for the berth/berths kept vacant

taking into account, the same GRT of the vessel berthed

(b).

However, the same section provides that any other vessel occupying

berth or berths and requesting for adjacent berth or berths to be kept

vacant shall be charged with additional Port dues, Pilotage and Berth

hire for such berth kept vacant

This gives an indication that the

Defence vessels lhave to pay only additional berth hire charges, while

other vessel have to pay additional port dues, pilotage and berth hire

charges on account of berth kept vacant.

(c).

In the previous Scale of Rates all vessels including Defence vessels

were being subjected to additional Port dues, and Pilotage in addition to

berth hire. Therefore, to do away with the existing distinction between

Defence vessels and any other vessel for levying charges when

adjacent berth is to be kept vacant the COPT has proposed to substitute

the existing Clauses 3(1) and (2) with the following:

"(1)

Any vessel occupying a berth(s) and requesting for any other

adjacent berth or berths to be kept vacant for their convenience

or due to the nature of the cargo to be handled at that particular

berth or for any other reasons, shall be charged with additional

Port dues, Pilotage and Berth Hire for each such berth or berths

kept vacant. The GRT of the vessel actually berthed shall be

reckoned for computation of the dues to the port.

(2)

The requisition for keeping the adjacent berth vacant may be

given either by the vessels' agent or by the consignee /

consigner, or the berth(s) may be kept vacant by the Port

considering the nature of the cargo handled- In all such cases,

the additional Port dues, Pilotage and Berth him shall be

collected from the vessel agent / steamer agent, along with the

normal charges, since they are vessel related charges.'

(n)

In the pro-revised Scale of Rates 7 days of demurrage free period excluding

Sundays and Holidays was provided for export cargo in addition to the days the

vessel (in which shipment is effected) remains in port But in the present Scale

of Rates, though free days on export cargo has been enhanced to 15 days, the

vessel's stay in port is also accounted for demurrage computation if the

shipment starts / continues beyond 15 days from the date of carting This is an

anomaly, which needs to be rectified

From the very beginning the principle

adopted in the port has been to provide free days for both exports and imports in

addition to the vessel's stay in port Therefore, the existing para 3 under clause

(e) "Free days" at page No. 28 has been proposed to be substituted with the

following

' In caae of export or transshipment, from the day following the dote of

admission of cargo /container the demurrage shall accrue from 16th day

in case of exports / containers and from 31st day in case of trans-

shipment containers till the time of commencement of shipment In other

words the cargo shall not attract any demurrage during the stay of the

ahip in Port on which the shipment is effected '

(ill)

Presently there is no separate charge envisaged for lifting the hatch covers

utilising the shore cranes and therefore Rs.200/- prescribed as hire charges of

wharf electric crane is being charged per lift of a hatch cover

As there is no

specific rate prescribed for this operation, it is not possible to maintain proper

records and recover the charges During rainy season, the hatches are opened

and closed frequently without prior requisition and it may not be possible to keep

record of all such events

It has, therefore, been proposed to provide specific

charge for opening / closing hatches using the shore cranes by adding the

following as clause (D) under the "Wharf Electric Crane charges for the Second

Operation"

' (D)

Whenever Electric Shore Cranes are used for opening / closing the

hatch Ra 400/- per shift shall be received per hook irrespective of the

number of opening and closing of the hatch "

A copy of the proposal was circulated to the concerned representative bodies of

port users for comments

The Cochin Steamer Agents' Association (CSAA) and the Cochin

Customs House Agents' Association (CCHAA) have fully agreed with the COPT proposal The

SCI has intimated that it has no comments to offer in this regard

The Indian National

Shipowners' Association (1NSA) has mentioned that no wharfage rate is being proposed for

export or coastal movement of motorised vehicles by car earners and requested for a

promotional rate for such movements

A joint hearing in this case was held on 19 December 2000 in Cochin Dunng

the joint hearing the following submissions were made

Indian Naw

(i).

Why charge Port Dues and Pilotage? We are not using any additional services

Pilot is not fixed for any particular berth

There is, therefore, no question of

opportunity cost All variable costs should be removed Only fixed cost should

be recovered

(ii).

This additional levy may discourage vessels from calling at the COPT

Indian National Shipowners' Association

(i)

We agree with the views of Indian Navy

(u)

If other berths are vacant in normal course, will this additional charge be still

levied?

i l ^ i /tn/l-'ffti/ - 3

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART III—SEC. 4]

The Cochin Steamer Agent's Association fCSAA)

Port due and pilotage shall not be charged because in any case the*other ships

will pay later.

Container Shipping Lines Association (India)

(i).

Has there been any case of vessel having diverted because of this, thereby

causing loss of Port due and pilotage?

(ii).

In any case, as Navy says, all variable costs must be excluded.

(iii).

In the name of opportunity cost, we should not be required to pay for activities

not actually performed.

(iv).

We pay for cargo handling, we hire a crane. How does it matter what use w» put

it to?

(v).

Definition of 'wharfage' needs to be clearly stated. Hatch is not always placed

on wharf.

The Cochin Customs House Agent's Association

(i)

We agree with the views of Indian Navy.

(ii).

Tariff includes a profit margin. Why should other components of tariff be

recovered as 'opportunity cost¹? Only the profit margin should be recovered.

Cochin Port Trust (COPT)

(i)

We have to pay the pilot whether pilot is used or not We have to recover

opportunity cost to earn the tariff in lieu thereof.

(ii).

There is very little variable cost in pilotage it mostly consists of fixed costs.

(iii).

It is not correct to say that crane is hired for any use. There are restrictions on

usage of crane.

(iv).

We only wish to rationalise and remove ambiguities. We are not introducing

anything new. Even today Rs.200A Is being charged for every act of hatch

operation. With this change users will save.

(v).

This proposal is not motivated by any audit observation. There is no audit

objection Our motivation is totally tariff rationalisation and also, removal of all

subjectivity and discretion.

(vi)

By such reservation of berth of one vessel, we may also loose goodwill of the

vessels kept out.

With reference to the totality of information collected during the processing of

this case, and based on a collective application of mind, the following position emerges;

(i),

The COPT proposal is not for introducing any new rate or conditionalities. It is to

be seen as an elaboration and correction of the existing provisions in the Scale

of Rates to remove any ambiguity, subjectivity and discretion. The COPT

deserves to be complimented for raising this user-oriented proposal which will

introduce a measure of transparency in its Scale of Rates

(II).

When the adjacent berth(s) is required to be kept vacant, a port's revenue

earning asset is forced to idle. Whether the berth would have remained Idle In

the normal course of activities is irrelevant. When a specific request is made to

keep the berths vacant the port is entitled to be compensated for the opportunity

of revenue earning foregone

Some of the users objected to the proposal of levying Port Dues and Pilotage

fees also on account of the berth kept vacant

The suggestion is to segregate

the costs and profit margin and to seek compensation for fixed costs and profit

margins only The COPTs argument is that there is little variable cost in such

operation Be that as it may, it is to be recognised that payment of port dues and

pilotage are Incidental to the vessels stay In the Port (at berth)

Services

covered under Port Dues and Pilotage are not optional services, which,the

vessels may decide not to avail of

These services being mandatory in nature,

the loss of revenue to the port includes the Port dues and Pilotage fee which it

would have earned, if the berth requested to be kept vacant had been occupied

by some other vessel

It Is, therefore, reasonable for the Port to seek

compensation for the total vessel related charges

It is noteworthy that this provision already exists in the Scale of Rates

The

proposal is only to set right the confusing wording

(in)

The COPT has proposed to levy the additional vessel related charges from the

vessel agents

It is relevant here to mention that requisition for keeping the

adjacent berths may be given by the consignee / consignor also, and, the Port

can also decide to do so considering the nature of cargo handled In view of this

arrangement proposed, it becomes necessary for the Port to intimate the vessel

agents in advance about such an action by the shippers or by the port itself

(iv)

Th« porfs proposal about limiting demurrage on exports upto the time the

shipment commences is reasonable

This will provide relief to exports

shipments carted and shipped when the vessel's sailing Is delayed due to

various reasons

The proposed clause, however, needs to be reworded to

provide clarity of the intention

In fact, it is more apposite to add this exemption

under clause 10(d) relating to 'Demurrage' instead of clause 10(e) The wording

can be as follows

'In cases of export / transhipment cargo/containers, however,

this levy shall cease when the nominated vessel commences

loading*

(v)

The COPT proposal about charges for wharf cranes used for hatch opening /

closing is to be seen in the context of elimination of accounting hassles and

doing away with field level exercise of discretion

A rate of Rs 200/- is already

prescribed in the Scale of Rate for wharf crane usage The Port has proposed to

consider two such usages for determining the rate for hatch opening / closing

The proposed rate is reasonable, when seen alongwrth the port's proposal to

charge this rate irrespective of the number of openings and closings of the hatch

in a shift.

The CSLA objection appears to be misplaced in the COPT context since the port

has only proposed to charge (at the existng rate) a fixed rate irrespective of the

number of operations. A portion of crane hire charges may be included in the

berth hire. However, the usage of crane is relevant

It can be only for cargo

handling operation This is augmented by the fact that the balance portion of the

crane hire charge (not included in the berth hire) is included in the wharfage or

handling charges

•

[

—

In the result, and for the reasons given above, and based on a collective

application of mind, this Authority approves the following amendments in the COPT Scale of

Rates:

(i).

The existing clauses 3(0 & (ii) in D.

Berth Hire Charges under terms and

conditions are substituted with the following:

"(a).

Any vessel qjfcupying a berth or berths and requesting for any other

adjacent berth or berths to be kept vacant for their convenience or due

to the nature of the cargo to be handled at that particular berth or for any

other reasons, shall be charged with additional Port Dues, Pilotage and

Berth Hire for each such berth or berths kept vacant The GRT of the

vessel actually berthed shall be reckoned with for computation of the

dues to the Port

(b).

The requisition for keeping the adjacent berth vacant may be given

either by the vessels' agent or by the consignee / consigner, or the

berth(s) may be kept vacant by the Port considering the nature of the

cargo handled, provided advance notice of such action is given by the

Port to the vessel-agent. In all such cases, the additional Port Dues,

Pilotage and Berth Hire shall be collected from the vessel agent /

steamer agent, along with the normal charges, since they are vessel

related charges".

(ii).

The following sentence is added at the end of the existing sub-para 3 under

clause 10 (d) - 'Demurrage' in General conditions relating to Cargo Related

Charges :

"'In cases of export / transhipment cargo/containers, however,

this levy shall cease when the nominated vessel commences

loading'.

(iii).

The following clause is added at the end of the existing rates schedule for 'Wharf

electric cranes - charges for second operation':

"(a)

Whenever Electric Shore Cranes are used for opening / closing the

hatch, Rs. 400/- per shift per hatch shall be charged irrespective of the

number of openings and closings of the hatch".

The amendments approved under para 7 (i) above shall take effect on expiry of

30 days from the date of notification of this order.

S SATHYAM, Chairman

[ADVT /lII/IV/143/Exly/20()0]

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