Kochi Customs’ decision to collect Indian Light House (ILH) dues from the vessels calling at the port for their on-deck cargo nearly empties the concessions of the port of their value to the business. The port offers 86% rebate on all vessel-related charges to the mainline vessels and 30% rebate to the feeder vessels. This strategy to attract more vessels to the port so that it can have more volume of business now has lost its appeal because of the ILH dues. With ILH dues in force, the shipping lines have but to spend more for each port of call. The ILH dues are calculated on the basis of Net Register Tonnage (NRT) of the vessels entering the Indian ports. The NRT of a ship is the cargo volume capacity arrived at in “register tonnes”, excluding the non-revenue generating spaces like engine room and fuel tanks. Roughly, a mainline vessel is bound to pay about INR 4.5 lakh towards ILH dues for each call. It is quite likely that ILH dues might swell up into huge money for the shipping lines to part with. It can be understood when the shipping lines and the new operators choose other neighbouring ports for their trade. The financial position which is already not very encouraging will become more difficult to deal with. Container ships and bulk and break bulk ships also have to bear this additional ILH dues. The shipping industry, therefore, has requested the DG Shipping to reconsider its decision or at least to consider exempting the Vallarpadam terminal so that it can effectively compete with the Colombo port.
Tuesday, 20 November 2012
Kochi Port’s concessions neutralized by the new levy
Kochi Customs’ decision to collect Indian Light House (ILH) dues from the vessels calling at the port for their on-deck cargo nearly empties the concessions of the port of their value to the business. The port offers 86% rebate on all vessel-related charges to the mainline vessels and 30% rebate to the feeder vessels. This strategy to attract more vessels to the port so that it can have more volume of business now has lost its appeal because of the ILH dues. With ILH dues in force, the shipping lines have but to spend more for each port of call. The ILH dues are calculated on the basis of Net Register Tonnage (NRT) of the vessels entering the Indian ports. The NRT of a ship is the cargo volume capacity arrived at in “register tonnes”, excluding the non-revenue generating spaces like engine room and fuel tanks. Roughly, a mainline vessel is bound to pay about INR 4.5 lakh towards ILH dues for each call. It is quite likely that ILH dues might swell up into huge money for the shipping lines to part with. It can be understood when the shipping lines and the new operators choose other neighbouring ports for their trade. The financial position which is already not very encouraging will become more difficult to deal with. Container ships and bulk and break bulk ships also have to bear this additional ILH dues. The shipping industry, therefore, has requested the DG Shipping to reconsider its decision or at least to consider exempting the Vallarpadam terminal so that it can effectively compete with the Colombo port.
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