Customs new levy to hurt vessels calling at Kochi port
November, 20th 2012
Shipping lines calling at Kochi Port may not get the benefit of some concessions now being offered by the port management to attract more vessels.
This is because, Kochi Customs decision to collect Indian Light House dues for on-deck cargo on all vessels calling at the port has effectively nullified the tariff reduction measure of the port.
In fact, the Customs levy has virtually taken away the sops offered by the port management to attract vessels, shipping sources say.
The port management is currently offering 86 per cent rebate in vessel-related charges to mainline vessels and 30 per cent to feeder vessels in order to attract more ships to dock at the port.
But the ILH levy has forced shipping lines to spend additional money for each port of call, the sources said.
The ILH dues are now being collected on the basis of the NRT (Net Register Tonnage) of vessels entering Indian ports. The new levy was a statutory requirement under the Light House Act, 1927.
Though Kochi Port was excluded from the decision for the time being, the authorities have now started to collect such a fee from vessels.
NRT is a ships cargo volume capacity expressed in register tonnes, one of which equals to a volume of 100 cubic feet. It is calculated by reducing non-revenue-earning spaces spaces not available for carrying cargo, for example engine rooms, fuel tanks and crew quarters from the ships Gross Register Tonnage.
However, a mainline vessel with a carrying capacity of 6,400 TEUs and NRT of 42,929 tonnes will have to pay an additional amount of approximately Rs 1 lakh as dues for on-deck tonnage. Besides, ILH dues at Rs 8 per NRT, which will be around Rs 3,43,432 or more depending on the size of the vessel. Hence, the total payment towards ILH dues alone will be around Rs 4,43,432 for each call.
This additional burden, according to sources, has been thrust upon the shipping trade at Kochi, which is already in dire straits due to recession and also the high handling rates compared to other neighbouring ports and other transhipments hubs.
They were of the view that these additional costs will discourage new operators from using the Kochi port, resulting in a further drop in traffic.
Besides container ships, many bulk and break bulk ships carrying timber logs and heavy lift cargo are calling at the port. They too have to bear an additional amount towards on-deck ILH dues .
The shipping fraternity has requested the DG Shipping to re-consider the decision or consider a waiver for the Vallarpadam transhipment hub in order to better compete with the neighbouring Colombo Port.