THE GAZETTE OF INDIA: EXTRAORDINARY

[PART ID—SEC 41

TARIFF AUTHORITY FOR MAJOR PORTS

NOTIFICATION

New Delhi, the 18th March, 2002

No. TAMP/120/2001-MOPT.—In exercise of the powers conferred by Section 48 of the Major Port Trusts Act

13*3 (38 of 19 J3 ). the Tariff Authority for Major Ports hereby amends the Scale of Rates of the Mormugao Port Trust to

prescribe wharfage charge on liquid ammonia as in the Order appended hereto.

SCHEDULE

Case No.TAMP/120/2001-MOPT

The Mormugao Port Trust (MOPT)

Applicant

ORDER

(Passed on this 11th day of March 2002)

This case relates to a proposal received from the Mormugao Port Trust

(MOPT) for fixation of wharfage charges for handling Liquid Ammonia.

2.1.

In its proposal, the MOPT has made the following points:

(i).

The Scale of Rates of the MOPT does not contain wharfage charges for

handling Liquid Ammonia since it was never handled at the MOPT In the past.

(ii).

Liquid Ammonia is expected to be handled and as such it is necessary to fix

the rate for the same. M/s. Zuari Industries Limited (ZIL) are in the process of

Importing Liquid Ammonia through the MOPT.

(iil).

Rates prevailing in other Major Ports for handling the same prodgct have been

obtained; and, in parity with the wharfage rate for LPG (i.e. Rs.125), it has

been decided by the Board of Trustees to adopt a provisional rate of Re. 150

per tonne subject to a review when the proposal for general revision of the

Scale of Rates will be submitted for approval In 2002.

22,

The proposal of the MOPT was circulated to the Goa Chamber of Commerce

and Industry and M/s. Zuari Industries Limited for comments.

3.1.

The comments received are summarised below:

M/s. Zuari Industries Limited (ZIP

(i).

The wharfage charges levied by other Major Ports like the NMPT is Rs.85 per

MT and it is our plea that the same may be made applicable at the MOPT

also.

(ii).

All Minor Ports charge much lower wharfage; and, therefore, it will not be

competitive with respect to other importer of Ammonia as fertiliser is a

controlled commodity.

3.2.

The Goa Chamber of Commerce and Industry has not sent any comments.

A joint hearing in this case was held at the MOPT in Goa on 29 January 2002.

At the joint hearing, the following submissions were made:

Mormuaao Port Trust iMOPT)

(i).

We want to introduce new cargoes. There is a cost to our "marketing'. We

want to Introduce a new wharfage for Liquid Ammonia immediately.

(ii)

Handling of Liquid Ammonia Is at a place close to habitation. It, therefore,

Involves safety considerations which have cost implications.

(Hi).

No costing details have been given. It is a hazardous cargo like LPG. We

have gone with reference to Rs.125/-PMT for LPG.

5 •

(iv).

We had to do a lot of social marketing due to public opposition to handle this

cargo. We had to provide for extra safety measures. A rate comparable to

that of LPG has been proposed in this backdrop.

(v).

We want to attract this cargo. We want to introduce the rate. The Board has

increased the rate proposed with the argument that, if It Is pitched higher right

now, it will not be required to be increased at the general revision of tariff in

March 2002.

M/». Zuarf lndu»tria» Limited (ZlU

(i).

In the NMPT, the wharfage charge is Rs.85/- PMT. In all other Ports also the

wharfage rates for Ammonia are similar. Only here it is proposed to be so

high.

(ii).

There is no comparison between LPG and Liquid Ammonia. Do not go with

reference to Rs.125/- for LPG and fix at Rs.150/- PMT.

(iii).

At the time of the general revision, any rationalisation required can be made.

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:

(i).

The MOPT Scale of Rates does not contain a specific wharfage charge for

Liquid Ammonia. The highest wharfage rate for bulk commodities prescribed

in the Scale of Rates 6f the MOPT Is for LPG which is Rs.125 PMT. The Initial

proposal was to levy this same rate on Liquid Ammonia also. The Board of

Trustees of the MOPT, however, decided to adopt a provisional wharfage

charge of Rs.150/- PMT on Liquid Ammonia.

From the records made

available by the MOPT, one of the factors considered to prescribe the

proposed wharfage rate on Liquid Ammonia at a level higher than that of LPG

is the cost saving to Importers in transportation.

(ii).

The MOPT has not furnished any cost analysis justifying the proposed rate. It

has simply gone by the rate available for LPG and the rates prevalent in other

ports.

(iii).

It is to be recognised that Liquid Ammonia is a hazardous cargo and the Port

has to provide for adequate safety measures for handling It The MOPT has

also mentioned about public opposition to handle this cargo and Its efforts in

social marketing to bring this cargo to the MOPT.

(iv).

The ZIL has objected to the comparison between the LPG and Liquid

Ammonia. It has, however, not given any reasons why such comparison shall

not be made.

(v).

This Authority has clarlflad in many other cases that the principles of tariff

setting must be commonly applicable at all the major ports; but, the Individual

tariff rates need not (and, cannot) be the same across the ports. What is

relevant for fixing a tariff is the cost of providing services at the port

concerned. The issue of benefit accruing to users cannot be a reason to fix or

revise a tariff item. This observation has already been made by this Authority

in the context of an MOPT proposal for increasing tariffs citing the benefits

accrued to the iron ore trade.

(vi).

Notwithstanding the general position maintained by this Authority as explained

above, In the instant case, a reference is to be necessarily made to tariffs at

other ports for three reasons.

Firstly, costing details for handling liquid

ammonia have not been made available by the MOPT.

It has in fact

expressed Its inability to furnish costing details for handling one Individual

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART III—SEC. 4]

commodity. Secondly, the M O P T has taken Into consideration the wharfage

rate for LPG as a base for fixing wharfage on liquid ammonia. The position

obtaining in other ports in this regard requires to be analysed. Lastly, the

MOPT itself admitted that it has considered the wharfage rates at other major

ports before prescribing the proposed wharfage rate.

(vfi).

Except in the MBPT, the wharfage rate for liquid ammonia is generally less

than that for LPG In other ports. It is noteworthy that the wharfage schedules

at some of the port do not contain a specific entry for liquid ammonia; and,

hence, It may be classified under 'other liquid bulk'. A different position

emerging at the MBPT may be due to the fact that LPG Is handled at

Jawahardeep whereas liquid chemicals are handled at Its Pir Pau jetties. The

differential at the other ports between the wharfage rates of Liquid Ammonia

and LPG is In the range of 34% (at the NMPT) to 72% (at the TPT).

(vfll).

From the position obtaining in other ports (except the MBPT), it becomes clear

that there is no justification for prescribing the wharfage rate for liquid

ammonia at a level higher than (or, even at the same level of) the wharfage

rate for LPG. Considering the minimum differential of around 75% in the

wharfage rates liquid ammonia and LPG, the wharfage rate for the former can

reasonably be fixed around Rs.95/- PMT.

The existing wharfage schedule of the MOPT prescribes a rate of Rs.99/- per

MT for all mineral oils / POL products with flash point below 76° F. Though

liquid ammonia does not fall under this category, it seems reasonable to adopt

the wharfage rate of Rs.99/- PMT considering the hazardous nature of the

commodities listed as well as liquid ammonia.

(be).

The MOPT has not requested for retrospective approval to the proposed rate.

Nevertheless, it has adopted the proposed rate of Rs.150/- PMT from

November 2001 on the strength of a decision taken by Its Board of Trustees.

Since the rate approved now is less than the adopted rate, the user will be

entitled to a relief to that extent; and, the MOPT will have to adjust its billing

done. To facilitate this, this Authority is Inclined to approve the wharfage rate

on liquid ammonia with retrospective effect from November 2001.

(x).

The next general revision / review of the Scale of Rates of the MOPT Is due in

June 2002. The rate fixed for liquid ammonia may be reviewed at the time of

next general revision / review. While formulating Its proposal for next general

revision / review, It may be reasonable for the MOPT to introduce volume

discount scheme for handling liquid ammonia in particular and, for all bulk

cargo in general.

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

application of mind, this Authority approves a wharfage rate of Rs.99/- PMT on liquid

ammonia with retrospective effect from November 2001. The MOPT is directed to incorporate

the wharfage rate of liquid ammonia in its Scale of Rates appropriately.

S. SATHYAM. Chauman

fADVT IJJ/IV/143/Extyy2001]

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and Published by the Controller of Publications. Delhi-110054.