REGD.NO. D.L.-33004/99 The Gazette of India
EXTRAORDINARY
PART III—Section 4
PUBLISHED BY AUTHORITY
No. 32] NEW DELHI, WEDNESDAY, FEBRUARY 27, 2002/PHALGUNA 8, 1923
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634 GI/20022 THE GAZETTE OF INDIA EXTRAORDINARY [PART III—SEC. 4] 34 THE GAZETTE OF INDIA: EXTRAORDINARY [PART III—SEC. 4]
TARIFF AUTHORITY FOR MAJOR PORTS
NOTIFICATION
New Delhi, the 27th February, 2002
No. TAMP/67/2001-CHPT.—In exercise of the powers conferred by Section 48 of the Major Port Tursts Act, 1963 (38 of 1963), the Tariff Authority for Major Ports hereby closes the case relating to a proposal of the Chennai Port Trust for revision of rates for handling of iron ore as in the Order appended hereto.
SCHEDULE
Case NO.TAMPWT/2001-CHPT
The Chttnnal Port Trust (CHPT) - * - Applicant
ORDER
(Passed on this 25th day or February 2002)
This oae# r"lat"c to a proposal received from the CHPT for revision of ratM for
iron handling activity.
Z The CHPT has proposed to increase the rates for iron ore handling activity by
125% to compensate the deficit in this activity, tt has made the following main points In its
proposal:
(I). The Authority had approved a tariff increase of 40% for the iron ore handling
activity in Its general revision Order dated 22 March 2000 as against the 100%
5 increase proposed by It The increase proposed by it was baaed on the cost statement for this activity which depicted a continuous deficit of more than Rs. 20/- orores from the year 1996-06 onwards.
(ii). In the said general revision Order, the Authority did not allow any increase for
the POL and Container handling activities on the ground that these activities
were in surplus. At the same time, the increase of 100% sought by it to absorb
the defloit tn the iron ore handling activity was also not allowed.
(ill). In"pteofthe40%irwaa8"appfovedbythe Auth
2000. this activity incurred a deficit of Rs. 42.21/- crores for the year 200001.
A further deficit of Rs. 55 crores and Re. 71 crores is estimated In the years
2001-02 and 2002-03.
(iv). A further loss of revenue is expected due to shifting of coal handling from the
CHPTtDtheEnnorePort.
(v). The Secretary (Shipping) at a meeting heW with the Port Chairmen on 7 June
2001 In New Delhi In one of the agenda Items relating to the CHPT decided
that the port may take appropriate actives to revise the iron ore rates.
(vQ. In this backdrop it has sought the approval of the Authority to increase the
rates for iron ore handling activity by 126%.
3. In accordance with the consultation procedure prescribed, the CHPT proposal
was circulated to the concerned port users / representative bodies of port users for their
comments. Comments received from various port users / representative bodies of port users
were forwarded to the CHPT for it* information / comments. The views of the CHPT on the
comments received from various users is still awaited.
4.1. The CHPT initially furnished cost statement for iron ore activity in support of its
proposal. The cost statement furnished was, however, not In the protbrma prescribed by this
Authority. The CHPT was therefore, requested to resubmtt the cost statement in the format
prescribed.
4.2. In the last general revision Order of the CHPT, since the rates for the surplus
activities were not reduced, percentage increases in the rates for the deficit activities had been
decided allowing the incidence of cross-subsidisation to continue at the level existing at that
point of time. That being so, though the cost statement pertaining to iron ore activity depicted
an average deficit of 146% onry 40% Increasewas then allowed by this Authority. In order to
decide on the quantum of tariff increase to be allowed in the instant case, it becomes essential
to recognise and quantify the cross-subsidisation flowing from other activities to iron-ore
handling activity. This analysis assumes more significance in the wake of privatisation of
container handling activity at the CHPT. The CHPT was, therefore, requested to furnish cost
statement* for the Port as a whole and all cargo related activity In the format prescribed.
5. The CHPT was again reminded to furnish the requisite cost statements vide
our letter dated 27 September 2001 and 30 October 2001. Subsequently, the CHPT submitted
cost statements for all the activities for the year 1909-2000 and 2000-01 which were again not
in the proforma prescribed by this Authority tor submission of tariff revision proposals. Further,
the information furnished by the CHPT did not contain estimates relating to the next two years.
Since a tariff cycle of two years is generally allowed, the estimates for the next two years are
essential to deokto on the quantum of tariff inorease. The CHPT was, therefore, again
requested to furnish the cost statements in tna format prescribed vide our letter dated 8
November 2001 followed by reminders dated 21 December 2001 and 17 January 2002.
6 THE GAZETTE OF INDIA: EXTRAORDINARY
[PART III—SEC. 4]
6.1. A Joint hearing In this case was hold on 18 December 2001. At the Joint
hearing, the CHPT •greed to furnish the requisite oost statements within three to four days.
Despite several reminders and Its emphatic assurance made at the Joint hearing, the CHPT has
not yet furnished the requisite cost statements in the prescribed profbrma.
6.2. At the Joint hearing, the CHPT also agreed to arrange an interactive meeting
with the users by 10 January 2002 to oiarffy different issues raised by them. The CHPT has not
yet Intimated the outcome of this meeting, despite a reminder Issued.
7.1. In the absence of the cost statement* In the prescribed proforma it is not
possible to decide on the increase in tariffs to be allowed tor the iron ore handling activity after
assessing the reasonableness of various cost items and reckoning with the flow of cross-
subsidies at the existing level. The details have been requisitioned from the CHPT since
August 2001; and, even after a lapse of nearly 6 months no meaningful response has been
received from the CHPT.
7.2; Since the proposal to received ae a 'tariff' oase, it to not desirable to keep it
pending Indefinitely. As the requisite Information Is not forthcoming despite our continuous
efforts to obtain them, it has become unavoidable to treat this case as 'dosed'. Before closing
the case, it was decided to give a final opportunity to the CHPT to furnish the requisite cost
statements and intimate the outcome of the interactive meetings with the users. The CHPT
was accordingly, informed that rf the requisite details were not received by 22 February 2002,
the case would be closed. The CHPT has not yet furnished me requisite information.
8.1. In the light of the position explained above, and based on a collective
application of mind, this Authority decides to dose this case for want of information required for
analysing it
8.Z It is noteworthy that the general review / revision of the CHPT tariffs falls due in
April 2002 and the position relating to iron-ore handling charges can be taken up for review
then.
. S. SATHYAM, Chairman
[ No. ADVT/ITI/IV/143/Exty/2002] Printed by Ihe Manager, Govt of India Press, Ring Road, Mayapuri, New Delhl-I !00(>4 and Published by the Controller of Publications, Ddhl-110054