SCHEDULE

C u e No. TAMP/16/2002-MBPT

The Mumbal Port Trust (MBPT)

Applicant

(Passed on this 12th day of August 2002)

This case relates to a proposal received from the Mumbai Port Trust (MBPT) for

licensing of plots for ship-breaking and revision of ship-breaking charges.

1.2.

The proposal submitted by the MBPT vide Its letter dated 23 January 2002 did not

contain the Agenda Note and the Resolution passed by the Board of Trustees of the MBPT (stated to

have been explaining the details of the proposal). The relevant details were furnished by the MBPT

subsequently on 18 February 2002 after being pointed out about the omission.

2.1.

The proposal of the

MBPT consists of the two components - (a) proposal to

change the unit of levy of ship-breaking charges under a 'Common User' facility from 'GRT¹ to 'LDT'

basis; and, (b) proposal to fix charges for licencing of the ship-breaking plots.

2.2.

The MBPT has made the following main points about its proposal for changing the

unit of levy:

(i).

In the existing SOR, ship-breaking charges are prescribed in Section III of Bunder

Scale of Rates based on the 'GRT' of the ship.

(II).

Prior to 1991, the ship-breaking charges were levied based on LDT (Light

Displacement Tonnage) of the ship.

(Hi).

The ship-breaking charges at the other yards are also prescribed based on the LDT.

(iv).

Various port users have also sent their representations to the port insisting that this

charge should be levied on LDT basis.

(v).

It has proposed to have the rates under the existing arrangement on 'Common User

Basis' in order to ensure that there is an enabling provision In its Scale of Rates in

case offers are not received for licensing all the plots or in case a few licenses have

to be terminated mJd--term.

(vl).

A ratio of 60:100 based on past average of vessel* ty,9&§ft ip, Wwtfw Port during the

last three years from 1998 to 2001 have been cpj^dj^KJi fay conversion of the

existing ship-breaking charges from GRT to LDT b#$i&.

(vii).

The existing conditions are proposed to c o n f i x mfflfflh WV/9*PftW$r

2.3.

The MBPT has given the following main reason? fpf l|psj^|^ sjji^-ljv^aking plots on

long term baste:

(I).

Ship-breaking activity is carried out on 12 plots at Lakri B*jr$e/r dS$W#i)^{a n d 7} P^|ots^{a t}

Powder Works Bunder.

(ij).

The, operations are labour intensive aj)d are carried put by ty»e shjp-breakers through

contractors' labourers and equiprpent.

(iii).

The pilotage and towage necessary for beaching of vessel Is provided by the MBPT.

For breaking operations, necessary equipment are provided by the ship-breakers and

their contractors.

THE GAZETTE OF INDIA: EXTRAORDINARY

JPART III—SEC. 41

(Iv).

The ship-breaking activity causes lot of environmental pollution due to generation of

waste material.

This has, therefore, attracted attention of various International

organisations who are insisting the need to properly monitor, regulate and control this

activity.

(v).

Presently, the plots are allotted to ship-breakers for the duration of breaking of the

ship. Upon completion of breaking, the plot is handed over to the port. Due to this

temporary allotment, a ship-breaker is unable Invest in Infrastructure development

which Is essential for better productivity.

(vi).

The average revenue earned from this activity during the last three years was to the

tune of Rs. 10.52 crores per annum approximately which has now fallen to Rs. 8.11

crores in the year 2000-2001.

(vll).

In view of the these circumstances, it has proposed to licence 12 ship-breaking at

Lakh Bunder and 7 plots at Powder Works Bunder (PWB) plots for a period of 10

years.

2.4.

It Is pertinent to note that the MBPT has not sought approval of this Authority as

regards the proposed terms and conditions governing the License scheme. This scheme Is proposed

for approval of the Central Government only. The salient features of the proposed scheme for

licensing plots for ship-breaking are summarised as follows:

(i).

The allotment of 19 plots for ship-breaking activities plots will be done in two

categories:

(a).

Category 'A"for the regular / existing ship-breakers of Mumbai Port; and,

(b).

Category 'B' which shall be open for all ship breakers subject to fulfillment

of the criteria prescribed.

(ii).

(a).

The 12 plots at Lakri Bunder (South) will be reserved for Category 'A¹. The

competitive bidding in this category shall be Invited only from regular /

existing ship-breakers who have broken minimum 10,000 GRT during last

three financial years (1998-2000) at the Mumbai Port.

(b).

The criteria proposed for the Category 'B' Is that the applicant must have 3

years of experience In ship-breaking industry; and, should have broken

minimum of 10,000 GRT or should enter Into a management contract with

another ship-breaker who meets the minimum prescribed experience criteria

subject to their forming registered firm or company on allotment of the plot

within a period of six weeks.

(iii).

The basis for allotment of plot has been proposed as follows:

(a).

In case, some plots from Category 'A' remains unallotted, the same will be

Included In the Category 'B' for allotment.

(b).

The basis of allotment of plot in both categories will be in terms of the highest

upfront fee offered.

(c).

The parties can bid for more than one plot. A maximum of two plots shall be

allotted to one ship-breaker under Category 'A'.

(d).

All the other conditions shall remain the same for both categories.

(iv).

Non-refundable upfront fee of minimum Rs. 50 lakhs Is proposed to be collected from

a licensee for allotment of the plot. The basis of acceptance of offer will be the upfront

fee quoted over and above the minimum prescribed amount.

(v).

It Is proposed to grant the license for a period of 10 years subject to a condition that it

shall automatically coma to an end without any further action by the MBPT, unless

the licence Is renewed within three months prior to the date of expiry of the licence

period.

(vi).

A minimum committed throughput of 10,000 LDT per year Is to be achieved. In case

of failure to achieve the minimum committed throughput, the port shall Initiate action

to terminate the license.

2.5.

The MBPT has sought approval of this Authority to the following rates leviable under

the licensing scheme:

(I).

A license fee of Rs.20 per sq. mtr. per month for the entire area of the licensed plot

which is payable quarterly in advance.

(ii).

Ship-breaking charge at the rate of Rs. 325/- per LDT of the ship which Is payable

before beaching of the ship.

(III).

For others vessels broken by the Licensee, at the licensed plots, an additional fee of

Rs. 80/- per LDT will be levied before beaching of the ship.

(Iv).

A discount of 20% is proposed to be offered to the Licensee in the ship-breaking

charges payable as at (Ii) above, for the excess tonnage broken above 10,000 LDT

per year.

2.6.

The proposal of MBPT was approved by Its Board of Trustees vide Resolution No.

192 dated 11 December 2001.

In accordance with the consultative procedure prescribed, a copy of the MBPT

proposal was circulated to the concerned port users/representative bodies of port users for their

comments. The comments received from them are summarised below:

Iron Steel Scrap & Shlpbreaker« Association of India (ISSAI)

As regards component (a)

(i).

Larger size ships will beach in Mumbai port by fixing charges on LDT basis, thereby,

resulting in higher revenue for the port.

(ii).

The existing ship-breaking charges on 'Common User Basis' are proposed to be

converted from GRT to LDT basis at Rs. 3.30 per day per LDT from the date of

beaching to the date of commencement; and, Rs. 5 per LDT per day for the

regulated period which may be revised to Rs. 2 and Rs. 3.50 per LDT respectively.

As regards component (b)

(Hi).

It Is necessary to take a long term perspective and viability of the industry and not

short term present_scenario. If the proposal is not realistic and reasonable, It will not

encourage the entrepreneurs to procure plots.

(Iv).

The ship breakers prefer to continue with existing policy of causal allotment of plots

with the only change in the mode of charging from the existing GRT basis to LDT.

(v).

The entire proposal is based on the model followed at the Alang ship-breaking yard.

Based on a comparison of the ship-breaking operations at Mumbai with that at Alang

the following facts have been presented:

(a).

The ship-breaking capacity in India at Alang, Mumbai, Kolkata, Sachana etc.

Is far in excess. Out of the 165 ship-breaking plots at Alang only 65 plots are

operative.

THE GAZETTE OF INDIA. EXTRAORDINARY

[PART III—SEC. 4]

(b).

The Mumbal ship-breakers have to compete with Alang ship breakers to get

ships apart from competition at international levels with ship-breakers from

Bangladesh, Pakistan and China.

(c).

Back-up area (40 to 200 mtr.) and Infrastructure at Alang are much better

than at Mumbai.

(d).

Minimum committed throughput of 10,000 LDT per year is allowed to be

clubbed with 60,000 tonnes for a block period of 6 years at Alang which is

not the case in the instant proposal.

(e).

The ship-breaking charges proposed by the MBPT are higher as compared

to Alang.

The ship-breaking charges at Alang are Rs.96 per LDT (for

wharfage and beaching) and Rs. 60 per 10 sq.mtr. as rent plus Rs. 12 per

LDT.

(f).

Transfer of plot is permitted at Alang by payment of transfer fee which is not

allowed at the Mumbai Port.

(g).

There is no need to pay Octroi duty at Alang ship-breaking yard whereas at

the MBPT, ship-breakers have to pay 2.25% Octroi.

(h).

The actual duty increase following the Budget 2002 is about 9% for Mumbai

ship-breakers as compared to 5% at Alang.

(vl), (a).

The proposal of the MBPT that the 21 existing ship-breakers will bid for the

reserved 12 plots gives a wrong impression. In fact, about 5 out of the 21

are associates of the remaining 16; and, a few ship-breakers are not

operative at present. That being so, the contention of the MBPT that there

will be competition in bidding for these plots Is false.

(b).

The representations of a number of ship-breakers to the MBPT to auction all

plots without any reservation have not been considered.

(vii).

The proposal for minimum committed throughput of 10,000 LDT per year appears to

be very high. Inspite of putting best efforts it is possible that a licensee may fail to

meet the target due to unforeseen circumstances.

Further,

there is no specific

provision in the existing Scale of Rates for penalty by way of confiscation of plots.

The proposed provision may lead to substantial loss of revenue to the MBPT by non-

utillsatiod 6f plots.

(vlli).

In this backdrop, it has also proposed an alternate scheme which will be fair to the

existing ship-breakers dhd other; and, also fetch better revenue in competitive bids

to the port.

A copy of the comments received frorti the iSSAI was sent to the MBPT as feedback

information. The MBPT has made the following main points with reference to the comments of the

ISSAI:

(I).

While formulating the Instant proposal the revenue of Rs.8.11 crores earned on all the

19 ship-breaking plots in the year 2000 - 2001 was considered. The scheme

envisaged that this level of revenue should be maintained and accordingly the

proposed charges were framed under two heads, i.e., nominal licensing fees In terms

of area occupied and the ship-breaking charges per LDT of ship broken. The annual

earnings on account of upfrbnt fee were also considered; and, accordingly, proposed

ship-breaking charges were worked out to fetch a total revenue of Rs.8.16 crore.

(ii).

The rate of ship-breaking is not proposed to be Increased; but, the earning from the

ship-breaking activity has been distributed under two different heads that is 'Common

User' basis and allotment under "long term licence'. Thus, the request of ISSAI to

limit the ship-breaking charges to Rs.250 per LDT and also the license fee to Rs.10

per square meter per month cannot be acceded to.

(Ill),

The Ministry of Shipping (MOS) has directed that the proposal for allotment of plots

should not be limited to regular ship-breakers operating at Mumbal; but, it should be

an open offer to all without any pre-quallfication conditions like experience in the ship-

breaking activity. Thus, the suggestion of ISSAI cannot be considered. The MOS

has, however, been requested to reconsider Its proposal regarding reservation of

plots to the existing ship breakers.

(iv).

The ship-breaking charges on common user basis have been converted from GRT to

LDT basis in light of the representation received from the various ship breakers. It

has reiterated the other points given In the proposal.

(v).

The minimum committed throughput of 10,000 LDT has been prescribed considering

the fact that many ship-breakers have achieved this target during last few years. The

MOS has also directed to Incorporate an automatic termination clause if the minimum

throughput of 10,000 LDT per year is not achieved.

(vi).

It has no comments to offer on the Associations' submission that the duty advantage

enjoyed by Mumbai ship-breakers has disappeared following the Budget 2002.

Further, the Port has no control over the Octroi duty levied by the Municipal

Authorities.

(vil).

It has followed the direction given by the MOS as regards reservation plots. The

MOS has further directed that the allotment of plots at Lakrl Bunder should not be

limited to twenty one regular ship-breaker operator at Mumbai; but, should be offered

to all without prescribing any pre-qualiflcatlon.

Based on a preliminary scrutiny of the proposal the MBPT was requested to furnish

additional Information / clarification on various points. Some of the main points are summarised as

follows:

(i).

The cost statements to be updated.with reference to revised estimates for the year

2001-02 and projections for the year 2002-03 and 2003-04.

(II).

The discrepancy observed In computation of the Return on Capital Employed (ROCE)

and the Capital Employed figures Is to be corrected.

(III).

In the light of the surplus financial position reflected In this activity, the basis of

proposing the ship-breaking charges on the plots proposed to be leased out may be

Justified taking Into consideration the tariff applicable as per the existing Scale of

Rates.

(Iv).

The basis of proposing an upfront fee of Rs. 50 lakhs per plot.

(v).

Confirmation whether the scheme for licensing of plots have been approved by the

Government.

(vi).

The detailed condltionalties governing the Licenses need to be Incorporated in the

Scale of Rates.

6.1.

A joint hearing In this case was held on 15 May 2002 at the MBPT. At the joint

hearing, the following submissions were made:

Mumbai Port Trutt (MBPT)

(I).

This proposal has been mooted by the ship-breakers themselves.

(li).

Frequent shifting from plot to plot leads to operational hassler, and has implications

on the environment ;and, hence, the new approach is proposes

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART III—SEC. 41

(ili).

When a vessel is due for scrapping the GRT has no meaning. LDT (which represents

the weight of the empty vessel) Is what is relevant. Hence, the shift in unit of levy is

proposed.

(iv).

The scheme approved by the Board is sent to the Government for approval. We did

receive a reply. There was some ambiguity. We have sought some clarification.

(v).

We are following the Government guidelines. We do opt for upfront payment; but, we

also want payments on LDT basis. That will help us to monitor better. That will also

give us the revenue that we are earning at present. Nevertheless, we will check again

and write to you about our stand vis-a-vis the Government guidelines.

(vl).

Once the scheme is approved by the Government, we feel, it is not necessary for the

TAMP to go into it again.

Iron Steel Scrap and Shlpbreakurs Association of India (I3SSAQ

(i).

The MBPT did not give us complete information. There was a deliberate attempt by

the MBPT to give us "half information". How can we respond now?

(ii).

'Reserve Price' need not be confidential. It may not attract meaningful bids,

(iii).

The modality of auction will have to be clearly set up. Today, it is not practical.

(iv).

For 'shipping' cargo carrying capacity is important; For 'ship breaking' the weight of

the ship is more Important. The MBPT choice of LDT is logical. We agree.

(v).

The minimum guaranteed performance norms have to be realistic. The proposal for

minimum guaranteed throughput of 10,000 LDT per annum Is not achievable even in

Alang. If at all, it should be for a block of years and not for each year.

(vl).

If rates ore high in the MBPT, business may not shift from Alang, etc., to the MBPT,

(vii).

Infrastructure in Alang is far superior. Productivity there is also far superior, If the

business Is still to be attracted to the MBPT, at least the rates must be reasonable.

(viii).

Long-term approach to lease is required. Everything can not be on the basis of

temporary occupation. In Alang, we pay lease rent even if no ship-breaking takes

place in a particular year.

(ix).

In a recent International developments, norms of operation are being developed.

One Is about the size of plots which should be big enough for safe operations.

(x).

Every plot can not be provided with all facilities. Some 'Common User facilities' will

have to be established in one plot. The port should .spend 20% of the revenue

earning on this.

(xi).

As regards the allotment of two plots to one ship breaker, the stated purpose Is to

promote breaking of bigger ships. The two plots must, therefore, be adjacent plots.

(xii),

In the lease agreement there has to be a clause providing for renewal after 10 yeafs.

The wording at present of the relevant clause is vague.

(xiii).

Out of the plots proposed for lease many are too small. Ships cannot beach, The

plots have to be of realistic sizes.

(xiv).

Permission to transfer plots must be available

(xv).

Government guidelines recommends one upfront payment; but, the MBPT has

proposed all the three simultaneously- upfront; LDT rates, and plot lease rental. This

is unrealistic and unfair.

(xvi).

The proposed ship-breaking charges Is Rs. 325/- per LDT, at Alang charges are

Rs.96/- to 120/-. The MBPT rate is excessive. This rate must be reduced.

(xvii).

The 'Scheme' at present Is unattractive. There may be very few (or, no) bids,

(xviii).

Breaking norms, Incentives must be available for motivating higher achievements.

(xlx).

In view of the heavy upfront payment together with the LDT payment, Rs. 20/- per

sq. mtr. is very high as lease rent. Why should there be lease rent at all separately?

(xx).

Do not borrow out of context the concept of 'preferential' and 'non-preferential' from

Alang. If the MBPT wants to do that, adopt the whole Alang model.

6.2.

At the Joint hearing, the MBPT have furnished further written submission reiterating

the points given by it earlier. In addition to that it has clarified that the scheme for licensing of plots for

ship-breaking has not been approved by the MOS. The MOS has further given the following

directions:

(i).

The scheme of licensing of plots shall be Initially limited to twelve plots at Lakri

Bunder only.

(li).

The proposal for allotment of plots at Lakri Bunder shall be an open offer to all without

any pre-qualification condition, and no experience criteria must be required.

(iii).

Upfront fee shall be kept confidential.

(iv).

The scheme shall incorporate an automatic termination clause if the minimum

throughput of 10,000 LDT per year Is not achieved

6.3.

The ISSSAI in its written submission at the joint hearing has furnished the statistics of

number of ships broken at Alang, Mumbai, Sachana and Calcutta Ports.

6.4.

At the joint hearing, it was agreed that the following further action would be taken:

(i).

The MBPT would clarify the discrepancies, if any, between the scheme and the

Government guidelines; and, also propose conditionalities for Incorporation In the

SOR.

(il).

The MBPT should decide whether it wished to delink the issue relating to change of

unit of levy for Immediate consideration.

(III).

The ISSSAI could give written submissions, If any, with reference to the

announcement made at the joint hearing by the MBPT about clarification given by the

Government relating to the licencing scheme. It could also look Into the Government

Guidelines, adopted by the TAMP, on lease of port lands.

7.1.

As agreed at the joint hearing the ISSSAI has furnished further written submission

which are summarised below:

On comppnent (a^ of the pnpPCHS&U

'I).

There is no dlffwwww si opinion amongst the MBPT and the industry on the proposal

for changing the unit of levy from GRT to LDT.

(li).

The modification in unit of levy may, therefore, be approved pending flnallaation of the

policies relevant to the long term lease by the Government.

(iii).

The ship-breaking charges proposed on LDT basis may, however be reduced from

the Rs. 3.30 to Rs. 2 per day per LDT from the date of beaching to the date of

commencement; and, for the regulated period the rates proposed at Rs. 5 may be

reduced to Rs. 3.50 per day per LDT.

THE GAZETTE OF INDIA. EXTRAORDINARY

[PART III—SEC. 4]

(iv).

Apart from this it has reiterated the other points made by It earlier.

On component (b) of the proposal

(v),

The ship-breaking charges and the rentals to be recovered from licensed plot holders

may be revised in line with the Government guidelines referred by the TAMP at the

joint hearing,

(vi).

The ship-breaking charges may be revised to Rs. 112 per LDT to be in line with the

charges levied at Alang and the token rent may be as per the Government guidelines.

(vii).

These factors will enable to fetch higher and better premium in the bid prices as the

bidders will be taking into consideration the cost of breaking ships in the licensed

plots.

The MBPT has furnished the additional information sought by us In response to our

queries and also with reference to the issues emerged at the joint hearing. Some of these points are

given below:

(i).

The cost statement for the service ship-breaking facilities has been revised based on

the Accounts of 2001-02. The expenditure and income have been projected for the

year 2002-03 and 2003-04.

(ii).

The proposed licensing scheme will yield an additional Income of 5% because of

private participation.

(III).

It has clarified that there is no discrepancy in computation of Capital Employed and

Return on Capital Employed. It has stated that the port does not work out service-

wise capital employed.

For the purpose of revision, Return on Capital Employed Is apportioned on the basis

of Net Block of each service. The present accounting system of Current Assets and

Current Liabilities does not permit capturing data required for arriving the service-wise

Working Capital. Since the Authority has insisted for furnishing the details of Working

Capital service-wise, It has apportioned the same based on a rough estimation.

(fv).

(a).

It has reiterated that for the purpose of fixing charges to be levied on the plots

under licensing scheme, the revenue earned on all the 19 ship-breaking plots

in the year 2000-01 has been considered. It has been envisaged that the

existing revenue of Rs. 8.11 crores is retained. The annual earnings on

account of upfront fee for 19 plots has also been considered.

(b).

In case of "Common User' facility there is no revision In the unit cost and only

the basis is proposed to be changed to retain the revenue earned in 2000-01.

(v).

The reference given by the Authority Is to the guidelines Issued by the Ministry for

land/water front management at the Major Ports. The instant scheme of licensing

ship-breaking plots for period of 10 years is not comparable to these guidelines which

Is basically for a lease of land or water front for 30 years.

(vl).

The scheme of licensing of plots for ship-breaking and conditions governing this

scheme needs to be sanctioned by the Government. The TAMP approval is not

sought for this purpose.

(vii).

It has agreed to delink Its proposal about change In unit of levy of ship-breaking

charges for 'Common User' facility for Immediate consideration.

It has further

clarified that the TAMP approval is sought only in context of its proposal to change

the unit of ship- breaking charges from GRT to LDT.

(viil).

The scheme for licensing the plots for ship-breaking has not yet been approved by

the Government; but, only some observations were conveyed in April 2002.

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

case, the following position emerges:

(I).

The proposal, as has been explained already, contains two parts.

Part I of the

proposal envisages a change in the unit of charging the existing ship-breaking

charges; it does not Involve any increase in the existing rates and changes of the

existing conditionalities. Part-ll of the proposal seeks approval to the new licence

fees and ship-breaking charges under the proposed scheme of licensing different

plots.

(li).

As regards Part II of the proposal, it may be relevant to note that the proposed

licencing scheme has not yet been approved by the Government. Further, the MBPT

has sought inclusion In its Scale of Rates of some of the charges proposed to be

levied under the Licencing Scheme; but, no conditionalities are proposed for inclusion

In the SOR. The Port has maintained that the conditionalities governing the scheme

are to be approved by the Government.

While there can be no dispute that the policy decision of allowing the MBPT to licence

the ship-breaking plots and the modalities of the licencing arrangement are to be

decided by the Government, it is for this Authority to approve the various charges

realisable under the scheme and the conditionalities governing application of such

tariffs. Merely because a scheme has been approved by the Government does not

mean that various conditionalities approved by the Government as a part of that

Scheme can automatically find a place in the Scale of Rates. As a third party neutral

regulator, this Authority, may not be in a bind to endorse all decisions of the

Government and include them as such in the Scale of Rates unless directions under

Section 54 or Section 111 of the MPT Act are issued by the Government. Even in

such cases prior consultation with this Authority is necessary.

The stand of the MBPT does not appear to have been taken with correct appreciation

of the legal position relating to the port tariff setting arrangement envisaged in the

Statute. This Authority is not in favour of approving only tariffs without going to the

associated conditionalities.

The MBPT has subsequently agreed to delink Part I and Part II of its proposal. In

view of this position, Part I of the proposal Is now taken up for disposal. Tariff

arrangement under the proposed licencing scheme can be considered when the

MBPT submits a comprehensive proposal, after obtaining the approval of the

Government to the 'Scheme'.

(III).

Part I of the proposal is about changing the unit of levy from GRT to LDT. The MBPT

has sought to explain that ship-breaking charges are levied at other yards on LDT

basis; and, Its proposal is in deference to a long standing demand from users, The

ISSSAI has fully endorsed this change and even anticipates higher business volumes

due to beaching of larger size ships in Mumbai as a result of the change in unit of

charging. In view of the mutual agreement between the Port and users, this Authority

has no reservation to approve this component of the proposal. It may be relevant

here to mention that the Kolkata Port Trust also changed over to a LDT based charge

since April 2001.

(Iv).

As has been explained already, the proposal does not seek revision of the existing

rates. With the change In unit of charging, these rates are only sought to be covered.

For the purpose of conversion, the MBPT has applied a ratio of 60 : 100 between the

LDT and the GRT of a vessel. The ratio has been arrived at by considering a 3 year

average. The proposal appears to be reasonable; and, it is noteworthy that the users

have also endorsed it.

(v),

Since the limited Issue at consideration is change of unit of charging, the cost

statements furnished by the MBPT have not been examined in depth.

The

arguments of the MBPT about the difficulties In estimation of activity/sub-activltywlse

capital employed do not appear to be reasonable for to be admitted. When other

THE GAZETTE OF INDIA. EXTRAORDINARY

[PART III—SEC. 41

major port trusts furnish such break up of details, the reasons why the MBPT, which

also follows the same accounting system, cannot do so aremot easily discernible.

(vl).

The ISSSAI has demanded reduction In the existing ship-breaking charges. Firstly,

this case is only for change In the unit of charging. Secondly, the MBPT proposes to

change over to 'licencing scheme' shortly and, thereafter, these rates will only be

relevant In some stray and isolated cases. This Authority, therefore, finds It difficult to

concede to the demand of the ISSSAI at this juncture.

10.1.

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

of mind, this Authority approves Part I of the proposal of the MBPT about change in the unit of levying

ship-breaking charges and amends Its Scale of Rates accordingly. The amendments to the Scale of

Rates are set out in the statement attached as Annex.

10.2.

Part - II of the proposal will be taken up afresh for consideration on receipt of a fresh

proposal from the MBPT In this regard which must, Inter alia, include the conditionalltles governing

application of the relevant tariffs. Pending such action from the MBPT, this case is treated as closed

with the disposal of Part - 1 of the proposal.

11.

The amendments to the Scale of Rates approved in this Order will come into effect on

expiry of 15 days from the date of their notification In the Gazette of India.

S. SATHYAM, Chairman

[ADVT IMV/143/2002/Exiy.]

Annex

AMENDMENTS TO THE MBPT SCALE Of RATES WITH REFERENCE TO CHARGES FOR SHIP-BREAKING.

CONSTRUCTION AND REPAIR OF THE VESSELS IN THE PORT TRUST BUNDERS

The existing item number (I) of Section ni- Charges for Ship-breaking, Construction and

Repair of the vessels In the Port Trust Bunders Is deleted and replaced by the following:

(I).

In respect of vessels being broken up on the Port Trust Hards, the charges will be

recovered from the date of beaching as under:

(1).

Rs.3.30 per day per LDT for the period from, date of beaching to the date

preceding the date of commencement of breaking.

(2).

Rs.5/- per LDT per day for the regulated period of the vessel. The regulated

period shall be one month per 600 LDT.

(3).

If the vessel continues breaking beyond the regulated period as at (2) above,

charges for the extended period shall be Rs.10/- per LDT per day for one month

for vessels upto 3000 LDT and for two months for the vessels above 3000 LDT.

(4).

Rs.20/- per LDT per day for the period beyond the period of extension as at (3)

above.

Notes:

(i).

Charges mentioned above shall be recovered on the total LDT of the vessel for

the entire period of occupation.

(ii).

The month for the purpose of regulation shall be reckoned with from the date of

commencement of breaking to the proceeding date in the following month for

example, 10^th April to 9^th May.

(iii).

The initial regulated period is determined considering 600 LDT or part thereof per

month. For example,

Vessels upto 600 LDT

601-1,200 LDT

1,201-1,800 LDT and soon

1 month

2 months

3 mbnths

(iv).

Vessels which are completely broken and removed prior to the expiry of the

regulated period will be granted a rebate in the form of part of the charges

recovered under (2) above. The percentage of rebate shall be worked out as

under:

(Regulated period, in days)- (No. of days actually taken)

(Regulated period, in days)

The rebate as worked out above will be subject to a ceiling as under depending

upon the size of the ship:

Size of the ship

LDT upto 6,000

LDT above 6,000

Maximum rebate admissible in percent of the total

charo.es recovered

25%

40%

Printed hy the Manager, Govl. of India Press, Ring Road, Mayapuri, New Delhi-110064

and Published hy the Controller of Publications, Delhi-1100J4.