(Published in Part – III Section 4 of the Gazette of India, Extraordinary)
| No. 276 | NEW DELHI, the 9 October, 2001 |
Tariff
Authority for Major Ports
NOTIFICATION
In exercise of the powers conferred by Section 48 of the Major Port
Trusts Act, 1963 (38 of 1963), the Tariff Authority for Major Ports hereby
approves the proposal of the Kandla Port Trust for fixation of wharfage charges
for transhipment of crude oil at Vadinar as in the Order appended hereto.
( S. Sathyam )
Chairman
Tariff
Authority for Major Ports
Case
No.TAMP/50/2001-KPT
The
Kandla Port Trust
------------ Applicant
O
R D E R
(Passed
on this 20th day of September 2001)
This case relates to a
proposal received from the Kandla Port Trust (KPT) regarding fixation of
wharfage charges for transhipment of crude oil with retrospective effect from 1
April 2000.
2.1.
The KPT has made the following points in support of its proposal:
(i).
The transhipment of crude oil was started in the year 1998-99 from the
Vadinar Lighterage point at KPT.
(ii).
The process involves transhipment of crude oil brought in by the mother
vessels to various smaller daughter vessels belonging to the Indian Oil
Corporation Limited (IOCL) and the Shipping Corporation of India (SCI) for
distribution to various refineries located in different parts of the Country.
The entire transhipment operation is carried out within the port
limits.
(iii).
Since the lighterage point operations are carried out in mid-sea and do
not involve much services from the port except the grant of right to use the KPT
waters; and also, keeping in view the fact that the IOCL is the
only major user of this facility, it was considered appropriate to enter
into an agreement with the IOCL for recovery of the charges.
(iv).
Keeping in view the rates charged by the neighboring minor ports in
competition; and, the fact that the Administered Price Mechanism (APM) is going
to be dismantled soon whereupon the IOCL shall cease to be the sole canalising
agent for import of curde oil and the import of crude oil could be sourced by
other refineries themselves on their own, the following rates of wharfage
for handling of crude oil (effective retrospectively from 1 April 2000) were
mutually agreed upon by the KPT, IOCL and the SCI in their meeting held
on 18 September 2000:
(a).
Rs. 4 per MT for handling 6 MMT of crude oil.
(b).
Rs. 6 per MT after completion of handling 6 MMT by way of
transhipment.
(v).
The proposal along with a copy of the draft agreement in this regard was
sent to the Ministry of Shipping (MOS) for approval; and, the MOS
directed the KPT to take up the matter with the TAMP.
(vi).
In view of the above directions from the MOS, the KPT decided to
incorporate a separate rate of wharfage for its transhipment operations in the
Scale of Rates to be applicable to all port users and not to a specific user or
class of users on account of the following reasons:
(a)
The rates agreed to by the IOCL & SCI were based on certain traffic
projections; and,
(b)
two separate rates for the same service cannot be prescribed.
The
matter was once again discussed with the officials of the IOCL and the SCI, on 9
April 2001 for arriving at a single wharfage rate for the transhipment
operation; and, it was mutually agreed by the KPT, IOCL and the SCI to fix a
rate of Rs. 5 PMT for the transhipment of crude oil at Vadinar with
retrospective effect from 1 April 2000.
2.2.
In this backdrop, the KPT has requested to approve a wharfage rate
of Rs. 5 per MT for transhipment of crude oil at Vadinar with
retrospective effect from 1 April 2000.
The proposal was endorsed by the Board of Trustees of the KPT in its
meeting held on 4 May 2001.
3.
In accordance with the procedure prescribed, a copy of the proposal
was forwarded to the various concerned representative bodies of port users and
Public Sector Oil companies for comments.
(A list of major users of the facility was also obtained from the KPT) The Comments received are summarised below:
The
Oil Co-ordination Committee (OCC)
(i).
The APM for the refineries was discontinued from 1 April 1998; and since
then, the pricing of the products is done based on import parity.
Similarly, the cost incurred by the refineries for crude oil (indigenous as well
as imported) is also based on import parity.
Therefore, any increase in the rate of wharfage on crude oil at
Vadinar will have an adverse impact on the economics of concerned oil refineries
in terms of higher cost of crude oil.
(ii).
The matter may be referred to the IOCL for obtaining its views since the
IOCL brings in the crude oil for its refineries in Vadinar.
The
Shipping Corporation of India Limited (SCI)
(i).
It is confirmed that wharfage rate of Rs.5 per metric tonne for
crude oil at Vadinar lighterage point at KPT was mutually agreed by the KPT,
IOCL and the SCI in the meeting held on 9 April 2001 at the KPT.
The
Indian Oil Corporation Limited (IOCL)
(i).
We abide by the minutes of the meeting held at the KPT office on 9 April
2001 between the KPT, IOCL and SCI.
(ii).
Since we do not have any further comments, no joint hearing is necessary.
The
Hindustan Petroleum Corporation Limited (HPCL)
(i).
An MOU with the IOCL has been signed for transportation of crude oil on
an integrated/industry basis and the IOCL in turn has signed a Contract of
Affreightment (COA) with the SCI.
(ii).
The issue regarding payment of wharfage for transhipment at Vadinar
lighterage point was discussed in the industry meeting with the IOCL,
which has been communicated by the IOCL to the Authority.
4.1.
A copy of the comments from the above port users / representative bodies
of port users was forwarded to the KPT as feed back information.
4.2.
The KPT has responded in this regard stating that it has no further
comments to offer, since both the major users viz. IOCL and SCI and also
the HPCL have agreed to and confirmed a wharfage rate of Rs.5 per metric
tonne.
5.
Since the major users engaged in the transhipment operation have conveyed
their agreement with the proposal of the KPT, a joint hearing in this case has
not been set up.
6.
With reference to the totality of information collected during the
processing of this case, and based on a collective application of mind,
the following position emerges: