TARIFF AUTHORITY FOR MAJOR PORTS

NOTIFICATION

New Delhi, the 26th November, 2001

No. TAMP/72/2001-CHPT.—In exercise of the powers conferred by Section 49 of the Major Port Trusts Act, 1963(38

f 1963), the Tariff Authority for Major Ports hereby approves the proposal of the Chennai Port Trust for inclusion of the

ate of lure charges for Tugs 'Nethaji' and 'Singaravelar' in its Scale of Rates as in the Order appended hereto.

SCHEDULE

Cgs* Wo.TAMPmtttOOI-CHPT

The Chennai Port Trust (CHPT)

Applicant

(Passed on this 5th day of November 2001)

This case rotates to a proposal received from the Chennai Port Trust (CHPT) about

inclusion of the rates of hire charge for Tugs 'Nethaji' and •Singaravelar' in rto Scale of Rate*.

2,1.

The CHPT has made the following points in its proposal:

(i).

Two tugs namely 'Nethaji' and 'Singaravalar' were acquired on 28 July 1095 and 17

June 1906 respectively.

(|0.

The hourly rate of the tugs was Initially fixed at Rs.25,500/- in the year 1998

provisionally, subject to revision. The rate was later revised based on the actual coat

and utilisation of tug* to R*.15,000/- (US $ 714) per hour or part thereof with effect

from 5 November 1990. This rate was fixed on mutual agreement between the CHPT

and Port users and in terms of the (then) existing provision under Book-I, Chapter IX,

Scale D relating to charges for floating crafts, appliances, etc., category II, Note- (2)

of the Scale of Rates (SOR), which reads as below:

*(2). The changes for services and for the uae of the crafts and eppfiancoa not

nwitfonod in the above Scale are arrangod between the Chairman and the

person requiring such services of such crafts or appliances."

(iii)

The proposal for Insertion of this rate In tha Scale of Rates has bean approved by the

Board of Trustees of the CHPT in its meeting held on 11 June 2001.

Ibi£i2>cr//±&>I-^X-

THE GAZETTE OF INDIA : EXTRAORDINARY

IPAKI IE^-Sti: 41

2.2.

In this backdrop, the CHPT hat requested the Authority the rate of Ra.15000/- (US $

714) per hour or part thereof for both the tugs, 'Nethaji' and 'Slngaravelar' in its SOR under Book-I,

Chapter IX, Scale D relating to charges for floating crafts, appliances etc., category as a new serial

number 11 (d).

2.3.

The CHPT has also requested to maintain confidentiality of the Information furnished

in the cost sheet relating to the working of hire charges.

3.1.

A copy of the proposal (excluding the oost statement) was forwarded to all oonoemed

users/representative bodies of port users for comments. The comments received are summarised

below:

The Tamil Chamber of Commerce FTCC)

(I).

Since the rate of RB. 15000/- (US $ 714) per hour or part thereof has been arrived at

mutually by the port users and the port; and, it has also been approved by the Board

of Trustees of the port, the proposal of the CHPT may be approved.

(ii).

It is to be clarified that the rate of Rs. 15,000/- applies to coastal vessels and US $

714 applies to foreign-going vessels.

The Shipping Corporation of India Ltd. tscn

Comments cannot be offered in the absence of cost sheet

The Channel Steamer Aflenta' Amrodatlon (CSAA)

(i).

Till date tug hire charges are included In the Pilotage charges. Separate charges are

levied for the services of additional tugs requisitioned over and above two tugs,

(ii).

The CHPT has six tugs viz. SINGARAVELAR, NETHAJI. MATCHLESS, MIGHTY

(2S/30 BHF), PALANI and MANI (20726 BHP). It is not clear why the CHPT is

approaching only for 'NETHAJI' and 'SINGARAELAR' to be considered on an hourly

based charges.

(lit).

If fixation of hire charges for these two tugs on an hourly basis Is over and above the

two mandatory tugs available for vassals' movement, and that too, whenever they are

used, then the proposal of the CHPT may be acoeptod.

(iv).

It needs to be ascertained whether the CHPT proposes to bifurcate the Pilotage and

Tug hire charges in the near future.

Container Shipping Linus Association (India) rCBLAI

(i).

This is a case for mere insertion of an agreed rate in the SOR.

(ii).

The rates had bean arrived at based on actual costs and utilisation of the tugs. The

rates had also been arrived at by the port in consultation with the users of the tugs

which are used for towing barges and lighters, and for service* othe; than berthing

and unberthing of vessels.

(Hi).

We support the necessary incorporation.

3.2.

A copy each of the comments received from the user-organisations mentioned above

was sent to the CHPT as feed back Information.

On a preliminary scrutiny of the proposal, the CHPT was requested to furnish

additional information/clarification on oertain points.

Some of the important points, raised are

summarised below.

(i).

Justification of the estimated operation and maintenance cost as well as other

overheads with reference to actual expenditure under these heads for the last 3

years.

(II).

Availability and utilisation norms for these two tugs along with similar details for the

last 3 years.

(III).

Writton-down capital value of the two tugs as on 31 March 2001.

A Joint hearing In this case was held on 5 October 2001 In Chennai. At the joint

hearing the following submission were made:

Chonnal Port Trust (CHFH

(i).

There is no move to separate Towage' and 'Pilotage'. This proposal is only about

additional tugs for towing.

(li).

All are agreed about the rat*. They are paying at the rate sinoe November 00.

Madras Chambers of Commerce and industry (MCCl) and Hindustan Chamber of

Corrirnoro (HCC)

(I).

We agree with the proposal.

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

case, and bearing in mind the arguments advanced at the joint hearing, the following position

emerges:

The CHPT has been levying a hire charge @ Rs. 15,000/- per hour since November

1999 for hiring of tugs 'Nethaji¹ and 'Singaravelar¹. This rate was fixed by the CHPT

based on a provision in the pre-revised Scale of Rates which gave discretionary

powers to its Chairman to fix the tariff of such appliances / crafts for which specific

rates were not prescribed in the Scale of Rates. It will not be congruous wfth the tanff

setting arrangement envisaged in the MPT Act if such discretionary powers to fix

tariffs are delegated to regulated entities. Realising this position, the provision giving

discretionary powers to the Chairman (CHPT) has already been deleted in the

revised Scale of Rates notified by this Authority on 30 March 2001.

00.

The hire charge in reference has been in vogue since November1909. The proposal

of the CHPT for general revision of tariff was decided by this Authority in March 2000.

Based on the decisions taken about the general revision of tariffs, the CHPI

forwarded a draft Soale of Rates for approval, whloh was notified m March 2001LThe

hire charges for the tugs 'Nethaji' and 'Slngaravelar¹ were not included by the CHPT

either In its proposal for general revision of Scale of Rates or in the draft Scale or

Rates forwarded by it subsequently. It is also relevant here to mention that none or

the users who participated In the proceeding relating to that case had also pointed out

the omission.

fill).

The CSAA has raised certain points about pilotage and towage charges. The

comments made by the CSLA and the explanation offered by the CHPT_,n, thta,regard

at the joint hearing adequately clarify the issues raised by the CSAA. The proposed

hire oharges for these tugs are applioabl© only when they are hired for those

purposes / activities which are not included as a pre-condition for levy of berth hire,

pilotage, shifting charges, etc.

(iv).

The instant proposal is not for approval of the hire charges. It only seeks inclusion of

the hire ohargeelevied since Nov. 1099 in the Scale of Rates to take car* * « » * £

requirements. None of the user-organisation* consulted as a part of tte P^eding

Inthis case has objected to the existing hire charges. Sjgnlflcantly, most of the user-

organisations have even endorsed the hire charges. Since the hire charg es, haslbeen

insistence since Nov. 1999 and the proposal is for inclusion of them in the Scale of

Rates, according approval to the proposal by this Authority cannot be w j " " *

approval accorded to the rates. This Authority neither approves nor ^ P j r o v w the

existing rates but allows Inclusion of them in the Scale of Rates to regularise levy of.

such hire charges.

THE GAZETTE OF INDIA EXTRAORDINARY

r P ^ i i ¹- ^

(v).

Notwithstanding the position explained in paragraph (iv) above, the hire charges can

be taken up for detailed scrutiny at the time of the next general revision / review of the

CHPT tariff which is due In April 2002. We have raised certain observations 0.1 the

costing aspect relating to the hire charges of these tugs, which may serve as a guide

to the CHPT while working out the revised hire charges as a part of its proposal for

the next general revision of tariffs, ft has to be recognised that revision of hire

charges of these tugs can be considered more objectively alongwrth the general

revision of tariffs since it will enable a detailed scrutiny of allocation of various

overheads between connected activities / facilities.

(vi).

While proposing revised hire charges for these tugs as a part of its next general

revision of tariff proposal, the CHPT is advised to consider the following relevant

points:

(a).

This Authority had also advised some of the major ports, including the CHPT

in a case relating to fixation of hire charges for fork-lift trucks, to work out a

pool rate for equipment / floating craft on the basis of ranges of oapaorty,

rather than for individual equipment. The existing Scale of Rates of the CHPT

prescribes hire charges for different floating craft on individual floating craft

basis. Rationalisation of the Scale of Rates in this regard is necessary apart

from revising and pooling the hire charges for the tugs in reference.

(b).

The CHPT has not considered the cost of insurance while working out hire

charges of these tugs. This Issue has been singled out for specific mention

in this Authority's Order dated 26 March 2001 relating to notification of the

revised Scale of Rates of the CHPT.

The relevant observation of this

Authority in that case is reproduced below:

"When the Port Trust crane, floating craft, etc., em hired by users,

the Port demands damages and compensations from the hirers, in

case of any accidents or damages to properties and life. The CHPT

is advised to insure auch equipment, oraft, eto., and either include the

insurance cost in the hire charges or lovy it separately as actuals. In

such cases, the damages and compensations, etc., wilt be claimed

from the insurance company and not from the users. It is relevant to

recognise in this context that these equipment and craft are operated

by the Port personnel; and, therefore, there is no scope for their

misuse by the hows. The CHPT Is required to follow this approech in

respect of its equipment and properties while formulating its proposal

for the next general revision of tariffs."

Th« observation already made Is reiterated in this case also.

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

of mind, this Authority allows insertion of the following provision under Book-I, Chapter-IX, Scale-D,

Category I of the Scale of Rates of the CHPT:

Serial Number and

Description

11(d) Tugs

'Nethaji' and

'Singravelar'

(for

towing

barges and

lighters

and

tor

services other than

berthing

and

unberthlng of Vessels)

Rat* of hire

(2)

R«. 15.000/-(for

coastal

vessels)/714

US Dollars (for

foreign-going

vessels)

Period of

hire

(3)

Per hour

or part

thereof

per Tug.

Minimum

(4)

Remarks

(0)

S. SATHYAM, Chaiiman

[Advt m/IV/143/2001/Exty.]

• Printed by the Manager, Govi.ol India Press, Ring Road, May(*>url, N#w Delhi-110064

and Published by the Controller of Publications. DelhM 10054 —• 2001