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Rediff News  All News  » Business » Indian port fees region's highest

Indian port fees region's highest

July 28, 2006 11:46 IST

Marine charges collected by Indian ports from shipping companies are several times higher than other ports in the region.

These include port dues, tow and berth hire charges, all of which are collected for docking a ship.

According to a study conducted by I-Maritime Consultancy, the cost of handling a ship in India is $14.60 per TEU (twenty-foot equivalent unit), while it is between $0.54 per TEU and $3.06 per TEU in other ports in the region.

Almost all components of marine charges - port dues, pilot & tow charges - are abnormally high in India.

For instance, tow charges, the cost of towing a ship from the approach channel to the berth using pilot vessels, is $21,000 at the Jawaharlal Nehru Port Trust, while other ports in the region charge between $66 and $ 2,275.

According to an official in Transcare, a global logistics company, the poor design of berths in ports is responsible for the high tow charges at Indian ports.

"In our ports, the ship has to be guided to the berths for quite a distance when compared to other ports and so our towage is considerably higher," he said.

The port dues too are unusually high in JNPT when compared to otherĀ  ports. Ports are free to fix these charges, though within a band specified by the Tarrif Authority for Major Ports.

Industry representatives said it was ports were given the freedom to fix the rates to reflect the market reality.

Ironically, while marine charges are higher in India, the actual container handling charges in the country are on the lower side as compared to other ports in the region.

"The handling charges are low in JNPT and other Indian ports because their capital investment on equipment too is lesser because they do not handle the kind of large vessels that the other ports do," said an executive with a logistics company.

At a recent brainstorming session held in Delhi, top executives of the industry said, given India's geo-strategic location, the ports in the country were bound to grow.

However, the one element that discouraged shipping liners was the massive marine charges that were charged by ports in India.
K P Narayana Kumar in New Delhi