THE GAZETTE OF INDIA: EXTRAORDINARY

PART III—SEC. 4]

SCHEDULE

Case NO.TAMF/124/2000-CHPT

The Chennai Port Trust (CHPT)

. . -

Appiicant

ORDER

(Passed on this 14th day of February 2001)

The Chennai Port Trust (CHPT) has submitted a proposal for an 'amendment to

its Scale of Rates for allowing a rebate in-wharfage on iron ore shipped through mechanised

ore handling system after unloading at the Royapuram Railway Yard and intercarted to the

Port's stack yard.

2.1,

The CHPT presently levies a charge of Rs.50.40 per MT on iron ore shipped

through mechanical ore handling system. In addition, Re.0.90 per tonne is also charged for

cleaning the ore handling system for receiving and shipment of iron ore fines / calibrated iron

ore.

2-2.

M/s. Minerals Sales Private Limited (MSPL), one of the exporters of iron ore,

have approached the Port with a proposal to augment receipts of iron ore for export

unloading their ore manually at the Royapuram Railway Yard and intercart them to the stack-

yard through Trucks for shipment. The firm has requested for a rebate in the rates, as the Port

will not be carrying out the operation of wagon tippling and stock piling.

2-3.

The proposal of M/s. Minerals Sales Private Limited was considered by the

Board of Trustees of the CHPT and proposed to grant a rebate of 40% on the existing rates of

wharfage and cleaning charges for Iron Ore unloaded at Royapuram Railway Yard and

intercarted to the MOHP through Trucks. In its proposal, the CHPT has given the following

points;

0).

The present wharfage charge is inclusive of all operations from the time of

tippling of iron ore from the wagon by wagon tipplers upto putting into the holds

of the vessel and as the Port will not be carrying out the operation of wagon

tippling and stock piling in this case, a rebate of 40% is considered reasonable.

This is based on the fact that the receiving system constitutes about 40% of

the total system.

(ii).

When the ore handling plant was commissioned in 1977, the wharfage and

special charge for iron ore shipped through ore handling plant was fixed at

Rs.26.50 per tonne and the rate was recovered at Rs.12.60 per tonne (47.5%

of the consolidated rate) at the time of receiving and unloading the ore wagons

and Rs.13.90 per tonne at the time of shipment of iron ore. Later this was

consolidated into a single composite rate. Though the wagon tippling and

stacking are not done by Trust's mechanised ore handling plant in the case of

intercarting arrangement, the stack yard of the Port will be used by the

exporters for which no separate charges are collected as it is a part of the

composite wharfage.

(iii).

Considering the sbove aspects, a.i amount of Rs.0.36 (40% of Rs.0.90)

towards cleaning charges and an amount of Rs.20.16 (40% of Rs.50.40)

towards tippling and stock piling of iron ore through mechanised system

constitute the proportionate cost of services not rendered. The total amount of

Rs.2Q.52 per MT rounded of to Rs.20.00 per MT will be the reasonable rebate

and this can be extended to the exporters who directly bring the Iron Ore to the

stock pile area for shipment.

2.4.

In this backdrop, the CHPT has proposed the following amendments to its

Scale of Rates:

The existing note under Item No.2 under Scale 'F' tray be numbered as Note (a) and

new Note (b) may be inserted after Note (a)

"Note (bj:

A rebate of 40% ir. Item No.1 and 2 above rounded off to

Rs.20/- shall be given for the quantity of Iron Ore manually

unloaded from the wagons at Royapuram Railway Yard and

intercarted to the Mechanical Ore handling plant through

trucks at their (exporter's) cost for shipment. This rebate shall

be given only when wagon tippler and stacker are not available

because of being used by another party."

The above proposal of th© CHPT was circulated to various users /

representative bodies of port users. Pending receipt of written comments from the users /

representative body of port users, a Joint hearing In this case was held on 25 January 2001 at

the CHPT premises. During the joint hearing the following submissions were made:

The Chennal Port Trust (CHPT)

Our calculation Is specific. The 40% rebate is reasonable. We cannot Increase the

proposed rebate.

Fad oration of Indian Mineral Industry (HMO

(i).

The increase in ore traffic has resulted in increasing demand on facilities.

(II).

Additional expenditure for 'road-wav' is Rs.63/- PMT. We get a rebate of only

Rs.20/- PMT.

It should be at least Rs.25/- PMT i.e., 50% of the existing

wharfage rate.

M/s- Minerals Sales Private Limited (MSPL)

(i).

This will increase the traffic and sha'l be encouraged.

(il).

Spillage inside the port area Is avoided. 10% expenditure in cleaning can be

saved.

(in).

Cleaning charges should not be added.

The Metal and Minerals Trading Corporation fMMTC)

0).

40% rebate is with reference to installation cost. The system is 25 year old.

How can the Port go by the original cost?

(II).

Please calculate rates separately for receiving and tippling and shipment.

Tamil Chamber of Commerce (TCP

Export of new cargo (eg., Manganese) is willing to shift from the Morrnugao Port Trust

(MOPT). This is the right time for the CHPT to announce the concessions to attract

more cargo.

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

this case, and taking into account the arguments advanced at the joint hearing, the following

position emerges:

(i)

The CHPT Scale of Rates has a specific provision already for handling of iron

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART in—SEC. 4]

the interests of exporters who bring in the cargo by road without requiring the

facility of the wagon tippler. This can, therefore, be seen as a user-oriented

proposal.

(ii).

It is noteworthy that a similar entry was introduced in the Scale of Rates of the

Paradip Port Trust (PPT), Only, the action taken there was at the instance of

this Authority; It was not a proposal from the PPT.

(iii).

The MSPL, one of the interested parties, has asked for a bigger reduction on

the ground that the CHPT would be saving 10% in 'cleaning cost' alone since

there will be no spillage inside the port area. This claim is untenable for the

reason that the Board of Trustees of the CHPT has approved a 40% reduction

consolidatedly on 'wharfage and cleaning charges'.

(iv),

Likewise, the demand of the MSPL to calculate the rates separately for loading

and unloading is not very relevant. What is relevant in the context of this case

is the fact that the port will not be carrying out the operation of wagon tippling

and stock piling; everything else will remain the same. That being so, a

reduction of 40% has been considered to be reasonable. This is on the basis

that the receiving system constitutes about 40% of the total system. This

reasoning of the CHPT is reasonable and acceptable.

It has to be recognised in this context that, though the wagon tippling and

stacking are not done by the CHPT's Mechanised Ore Handling Plant in cases

of intercarting arrangement, the stack yard of the port will still be used by the

exporters for which no separate charge is levied as it has been integrated with

the composite wharfage charge.

(v).

That the new arrangement will result in an increase of traffic in the same cargo

or even emergence of new cargo like Manganese oannot be cited as grounds

for a bigger reduction. The CHPT must have taken into account these and

other commercial considerations while formulating its proposal.

(vi).

The MMTC has raised an objection about the 40% reduction being with

reference to a 25-year-old installation cost. Apparently, the MMTC wants the

present value to be reckoned with for this purpose. It is relevant here to point

out that we have not yet been able to Introduce the principle of marginal cost

pricing. All ports everywhere (including, probably, in all other countries) follow

the same practice. That being so, the question of dealing with the depreciated

value of the assets only for this case cannot arise.

(vii).

The demand of the FIMI that the reduction should be of the order of 50% (i.e.,

Rs.25/-) becausa of the fact that there will be an additional expenditure of

Rs.63/- for the 'road way' is more emotional than rational or economic. The

CHPT has categorically stated that its calculation is specific; the 40% reduction

is reasonable; and, it cannot be enlarged. There is no reason why this

categoric statement of the CHPT cannot be accepted.

(VIM).

The CHPT has proposed that this rebate will be given only when wagon tippler

and stacker are not available because of being used by another party. This

stipulation is understandable as the Port wants to protect its investments on

Tippling and stacking equipment; and,, does not want idling of the&e facilities.

The need for intercarting of ore from Railway yard may also arise when the

receiving system the Port is cut of commission due to breakdown or

maintenance. That being so, it is reasonable to allow the rebate when the

wagon tippler and stacker can not be spared by the Port for reasons like

maintenance, oveihaul and repairs in addition to non-availability because of

being hired by another party. It is noteworthy that A similar condition has been

stipulated by this Authority for cases of exemption from heavy lift charges.

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

application of mind, this Authority approves the proposal of the CHPT with the slight

modification mentioned in paragraph 4 (VIII) above. Consequently, the Scale of Rates of the

CHPT is amended as described below;

"The existing note in item 2 of Scale F, Chapter II; Book I is renumbered as note (a)

and a new note (b) as given below Is inserted:

Note (b):

A rebate of 40% in Item 1 and 2 above rounded off to Rs.20/- shall be

given for the quantity of Iron Ore manually unloaded from wagons at

the Royapuram Railwav yard and intercarted to the Mechanical Ore

Handling Plant through trucks for shipment at the cost of exporters.

This rebate will be allowed only when ths wagon tippler and stacker

can not be spared by the Port for reasons like maintenance, overhaul

and repairs or non-availability of these equipment because of being

hired by another party."

The CHPT is directed to incorporate the above provision in its Scale of Rates.

S SATHYAM, Chairman

[ADVT IMV/143/Exty /2000]

Printed by the Manager, Oovt oJ India

Press, Ring

P ' j u

Mayapun, Now Dclhi-110064

and

Published

the Controller of Publications, Delhi-110034