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Port policies & traiff
1. Study Report on Port Policies &Tariff
By- Sumit Mishra
For- MEPL
2. Table of Content
1. Existing Scenario…………………………………………………….. 4
2. Legal Framework……………………………………………………. 4
2.1 Indian Port Act, 1908 ……………………………………….. 5
2.2 Major Port Trust Act, 1963 ………………………………. 6
2.3 Tariff Authority for Major Port …………………………. 6
2.3.1 Guidelines for Cargo Related Charges…………….. 7
2.3.2 Guidelines for upfront tariff setting for PPP
Projects at Major Port Trust, 2008 ………………. 6
2.3.3 Norms for fixation of upfront tariff for services
Rendered at Coal Terminal ……………………………. 6
3. Management of Minor Port…………………………………….. 10
3.1 Review of Gujarat Maritime Board…………………….. 10
3.2 Objective of GMB……………………………………………… 10
3.3 GMB Port sector structure…………………………………. 11
3.4 Policy initiative of Gujarat for the Port Sector……. 12
4. Role of Andhra Pradesh Port Department…………………. 12
4.1 Function of Port Department…………………………….. 13
4.2 Privatization Guidelines…………………………………….. 13
4.3 Incentive & Assistance………………………………………. 13
5. Berthing Policies
5.1 Adani Port Mundra…………………………………………… 14
5.1.1 Priority Berthing……………………………………………. 15
5.2 Kandla Port………………………………………………………. 18
5.2.1 Priority Berthing……………………………………………. 18
5.2.2 Seniority of Vessel…………………………………………. 18
5.2.3 Miscellaneous……………………………………………….. 19
5.3 Chennai Port…………………………………………………...... 19
5.3.1 Priority Berthing…………………………………………….. 19
5.3.2 Seniority of Vessel………………………………………….. 20
6. Lay Time ……………………………………………………………….. 20
6.1 Notice of Readiness …………………………………………. 21
6.1.1 Notice of Readiness Accepted ………………………. 22
6.1.2 Notice of Readiness Rejected ……………………….. 23
6.1.3 2nd
Notice of Readiness ………………………………… 23
6.2 Statement of Facts ………………………………………….. 24
6.3 How to work out available Laytime ………………… 24
4. 1.0 Existing Scenario:
India has a coastline of about 7517 km, excluding the Andaman & Nicobar
Island, which has given rise to several seaports and are under the concurrent list
of the Indian Constitution.
India has 13 Major Ports and approximately 185 Minor Ports (various names are
used: non-Major Ports, Minor Ports, intermediate ports, State ports as well as
private ports) located in nine Maritime States. There is one port (Ennore, a
satellite port of Chennai) which has been corporatized and incorporated in 1999
under the Companies Act, 1956.
The other ports, including the latest addition: Port Blair on the Andaman and
Nicobar Islands, are structured as trust ports under the Major Port Trusts Act,
1963, functioning as (semi) autonomous bodies under the administrative control
of the Ministry of Shipping.
The following ports are Major Ports:
1. Chennai Port
2. Cochin Port
3. Ennore Port (corporatized)
4. Jawaharlal Nehru Port
5. Kandla Port
6. Kolkata Port
7. Mormugao Port
8. Mumbai Port
9. New Mangalore Port
10.Paradip Port
11.Port Blair Port
12.Tuticorin Port and
13.Visakhapatnam Port
Major Ports are placed on the Union list of the Indian Constitution; moreover
the Central Government may declare any port in India a Major Port by
notification in the Official Gazette.
2.0 Legal Frame Work:
All Ports (Major and Non Major Ports) are regulated under the Indian Ports Act,
1908. The Act defines the jurisdiction of Central and State Governments over
all ports in the country. It lays down general rules for safety of shipping and
conservation of port facilities. It regulates matters pertaining to the
administration of port dues, pilotage fees and other charges.
5. Whereas, The Minor Ports are under the jurisdiction of the Governments of the
various maritime states (Orissa, Andhra Pradesh, Tamil Nadu, Pondicherry,
Kerala, Karnataka, Goa, Maharashtra, Gujarat as well as Lakshadweep Islands
and Andaman and Nicobar Islands).
Tariff Authority for Major Ports (TAMP) has been constituted for regulating
tariffs in major ports and its functioning/role is being revised to ensure uniform
and transparent norms relating to fixing tariffs as well as prescribing quality of
service for port authorities/terminal operators.
2.1 Indian Port Act, 1908
The Indian Port Act defines the jurisdiction of Central and State Governments
over all ports in the country. It lays down general rules for safety of shipping
and conservation of port facilities. It regulates matters pertaining to the
administration of port dues, pilotage fees and other charges.
The Government may, in addition to any rules which it may make under any
other enactment for the time being in force, make such rules, consistent with
this Act, as it thinks necessary for any of the following purposes :-
(a) For regulating the time, hour, speed and conditions in which vessel may
enter, leave or be moved in any port subject to this Act.
(b)For regulating the berths, stations and anchorages to be occupied by
vessels in any such port.
(c) for regulating the anchoring, fastening, mooring and un-mooring of
vessels in any such port;
(d)for regulating the moving and warping of all vessels within any such port
and the use of warps therein;
(e) for regulating the use of the mooring buoys, chains and other moorings in
any such port;
(f) for finding the rates to be paid in a port other than a major port for the
use of such moorings when belonging to the Government, or of any
boat, hawser or other thing belonging to the Government;
(g)for regulating the use of piers, jetties, landing places, wharves, quays,
warehouses and sheds when belonging to the Government;
(h)for fixing the rates to be paid for the use of piers, jetties, landing places,
wharves, quays, warehouse and sheds of any port, other than a major
port, when belonging to the Government;
The Indian Port Act also states that every rule made by the State Government
under this Act shall be laid as soon as may be after it is made, before the State
Legislature.
6. 2.2 Major Port Trust Act, 1963
Under the Major Port Trusts Act, 1963, each port is governed by a Board of
Trustees nominated by the Central Government, which are fully controlled by
the Central Government while their members are in principle selected to
represent various interests. The Trustees have to follow the policy decisions of
the Central Government while their financial powers are limited. Port dues and
terminal services’ rates are externally fixed by TAMP.
The main powers of the Board include:
(a) Execution of ‘works’ within or without the limits of the port and provide
such appliances as it may deem necessary or expedient. Such works may
include or relate to reclamation of land, quays, docks, jetties, piers, roads,
railways, bridges, buildings (including residential buildings), rolling
stock, cranes, lighthouses, vessels, engines, dry-docks, etc.
(b)Erection of private wharfs within the port area;
(c) Performance of port and terminal services such as stevedoring, handling
of passengers, delivery, transport and dispatch of goods, pilotage,
hauling, mooring, towage, etc.
(d)Delivery and provision of infrastructure for ports.
Under Major port trust act 1963, Central government by notifying in the official
gazette, constituted an authority to regulate and control tariffs which was named
as Tariff Authority for Major Port.
2.3 Tariff Authority for Major Port (TAMP)
In 2003 Tariff Authority for Major Port organized a national level workshop to
finalize the guidelines for Tariff regulation, as a result of the deliberations in the
workshop a set of guidelines for Tariff regulation was adopted.
In continuation to that TAMP recently notifies the working Guidelines to
operationalize the Policy for Determination of Tariff for Major Port Trusts
2015.
The working guidelines to operationalize the Tariff 2015 will be applicable to
all the Major Port Trusts while formulating their proposal for tariff revision.
Tariff regulation is effected by TAMP according to the following principles:
7. (a) TAMP shall rationalize the tariff structures & streamline tariff setting
system.
(b) Safeguarding the various port users’ interests.
(c) Ensuring fair and just returns to port operators.
(d) Considering factors which encourage competition and operating
efficiencies.
(e) Deploy established costing methodologies.
(f) Regard policy objectives of the Government.
(g) Leverage tariffs to improve operational efficiencies.
(h) Ensure a fair and transparent tariff fixation.
2.3.1 Guidelines for cargo related charges:
1. Cargo-related charges shall continue to be denominated in Indian Rupee
terms.
2. Wharfage rates shall be on per unit of either weight or volume of cargo
handled than value thereof.
3. Concessional tariff will be prescribed for coastal cargoes / containers,
as per the policy directions of the Government. It is prescribed that the
cargo/ container related charges for all coastal cargo/ containers, other
than thermal coal and POL including crude oil, iron ore and iron ore
pellets should not exceed 60% of the normal cargo/container related
charges.
4. Major Ports Trust shall prescribe in their SOR, the guidelines on priority
berthing to coastal vessel issued by Ministry of Shipping for common
adoption by all the Major Port Trusts.
5. Major ports should endeavour to adopt sliding scale of rates to motivate
greater performance by bulk/captive facility operators with a view to
attract additional cargo. Within the overall ceiling rates prescribed, ports
can decide such tariff scheme on non-discriminatory and objective basis.
6. Demurrage / storage charges free days allowed shall be exclusive of
customs notified holidays and port non-working days
7. If operational area is leased on rental to users, storage charges on
containers / demurrage on cargo stored therein shall not be levied again.
8. 8. Charges for stevedoring activity undertaken, or for supply of on-board
labour, by ports will be included in the Scale of Rates of the port.
a) The rates for stevedoring, wherever undertaken by the port as a
separate activity, will be prescribed on per tonne basis. Where only
on-board labour is supplied, actual wages plus percentage levy will be
prescribed. In either case tariff will be linked to productivity.
2.3.2 Guidelines for upfront Tariff setting for PPP Projects at Major Port
Trust 2008
Tariff Authority for Major Port under the direction of Ministry of Shipping,
Road Transport & Highways (MSRTH) notifies the following guidelines for
upfront tariff setting for PPP projects at Major Port Trust 2008.
These guidelines will apply to all PPP projects for which bids will be invited by
setting tariff caps upfront in the manner provided hereinafter when such projects
are awarded under BOT/BOOT or any other arrangement for private sector
participation under the Major Port Trusts Act, 1963 adopted by the Government
as amended from time to time.
For the purpose of fixing upfront tariff, TAMP will follow a normative cost
based approach which will recognize capital and operating costs estimated
based on the norms set by these guidelines and allow a reasonable return on
capital employed, which is 16% as of now. The upfront tariff so set by TAMP
will only be the ceiling levels.
Tariff caps for handling various commodities or providing various services by
private operators licensed by Major Port Trusts under Section 42 of the MPT
Act shall be set upfront by TAMP following these guidelines.
2.3.3 Norms for fixation of upfront tariff for services rendered at Coal
Terminal
i. Tariff Structure
The tariff structure for services rendered at a mechanized Coal terminal can be
grouped under the following three major groups:
(1) Coal Handling charges
(2) Storage charges
(3) Miscellaneous charges
9. ii. Norms for apportionment of total Revenue requirement
The total Revenue requirement determined as per these guidelines is
apportioned among the aforesaid major tariff groups in the following manner
and rates for individual tariff items under each of the groups can be determined.
Tariff Group Percentage of Total Revenue
Coal Handling Charges 98
Storage Charges 1
Miscellaneous Charges 1
Please Note: The above coal handling charges is a composite charge
comprising of charges for unloading of coal from wagons, storage at the yard
for prescribed period and loading on to ship for coal loading terminal and
unloading from ship, storage at the yard for prescribed period and loading onto
wagons/trucks for coal unloading terminal.
Storage charges is the charges levied for storage of coal at the yard beyond
allowable period of 25 days.
Norms for calculation of optimal capacity of terminal: The optimal capacity
of the terminal is reckoned as 70% of the maximum capacity. The optimal
capacity is the lower value of the optimal quay capacity and optimal stack yard
capacity.
Determination of optimal quay capacity: The optimal quay capacity is 70%
of the maximum or possible quantity of coal that could be loaded (in the case of
loading terminal) or unloaded (in the case of unloading terminal) on to or from
the ship in a period of one year expressed in tons.
Optimal quay capacity =
Where
S1 - Percentage share of capacity of capesize vessels
P1 - Ship day output of capesize vessels
S2 - Percentage share of capacity of Panamax vessels
P2 - Shipday output of Panamax vessels
S3 - Percentage of share of capacity of Handy and handymax vessels
P3 - Shipday output of Handy size and Handymax vessels
S1, S2 and S3 are to be determined taking into consideration the draft
availability and type of vessel expected to be handled at a particular port.
10. Norms for Ship Day Out
Type of Ship Norm
Loading Unloading
Capesize - 50,000Tons/Day
Panamax 40,000Tons/Day 35,000Tons/Day
Handymax 20,000Tons/Day 15,000Tons/Day
Determination of Optimum Yard Capacity
The optimal yard capacity is 70% of the maximum quantity of coal that could
pass through the yard:
Optimal Yard Capacity:
Where
A - Area of the yard made available by the port for development in sq. m.
U - Percentage of total yard area that could be used for stacking
Q - Quantity that could be stacked per sq. m. Of area
T - Turnover ratio of the plot in a year
Norms for calculation of optimal yard capacity
Parameter Norm
A As provided by Port
U 70%
Q 3 Tons/Sq.m
T 12
Norms for calculation of Capital Cost
S.No Group Norm
1 Civil Construction Cost As per estimates given by the Port Trust
for construction of civil works.
2 Coal Handling
Equipment
As per estimate given by Port trust for 2
stream working with the list of
equipment’s
3 Miscellaneous* 5% of civil & equipment cost
*It includes the cost of all other facilities required such as pollution control, fire
fighting equipment, upfront payment, and interest during construction (IDC),
working capital margin, miscellaneous equipment’s, power supply, lighting, etc.
11. Norms for calculation of operating cost
The operating cost incurred in a Coal terminal is grouped under the following
major heads and is to be calculated for the optimal capacity.
1. Power and fuel cost
2. Repair and maintenance
3. Insurance
4. Depreciation
5. Licence Fee
6. Other expenses consisting of
a). Salaries and wages of operating and maintenance staff including
Welfare and other expenses towards them.
b). Management and general overheads comprising
(i) Salaries of management and administration staff including welfare
and other expenses towards them
(ii) Maintenance of computers and other office equipment
(iii) Any other miscellaneous cost
The norms for various items of operating cost given above are mentioned in
table below:
S.No Group Norm
1 Power 1.4 Unit/Ton
2 (a) Repair and maintenance of civil
assets
(b) Repair and maintenance of
mechanical and electrical
equipment’s including spares
1% of cost of all civil
assets
7% of cost of all
mechanical and electrical
equipment’s
3 Insurance 1% of Gross Fixed Assets
value
4 Depreciation As per norms prescribed in
Companies Act or any
norms prescribed in the
licence agreement
whichever is higher
5 Licence Fee (rentals for land and other
port assets)
As per Scale of Rates of the
concerned Major Port Trust
6 Other Expenses 5% Gross Fixed Asset
Value
12. 3.0 Management of Minor Ports
Pursuant to the Indian Ports Act, 1908 the responsibility for the development of
so called Minor Ports in one of the Maritime States of India vest with the
concerned State Government. No permission is required from the Central
Government to establish a Minor Port. They are placed in the Concurrent list of
the Constitution and are administered under the Indian Ports Act, 1908. The
nine maritime states control some 185 State ports and jetties, of which some
sixty are truly operational. Most States have established so called Maritime
Boards.
At the State level, the State Maritime Boards are responsible for formulation of
water front development policies and plans, regulating and overseeing the
management of Minor Ports, attracting private investment in the development of
such ports, enforcing environmental protection standards, etc.
For the Maritime States the Maritime Boards have become the dominant public
port management model. The Maritime Boards have their legal basis in various
State Acts such as the Gujarat Maritime Board Act, 1981 (the first Maritime
Board in India) and the Tamil Nadu Maritime Board Act, 1995. The Maritime
Boards are in charge of all Minor Ports in their State; they administer, control,
regulate and manage the Minor Ports in the concerned State.
3.1 A Review of Gujarat Maritime Board (GMB)
Gujarat Maritime Board was founded in 1982 under the Gujarat Maritime Board
Act, 1981, to manage, control and administer the minor ports of Gujarat. GMB
act applies to all the minor ports in the state to which the Indian Ports Act
applies.
3.2 Objectives of GMB Act:
1. To maximize coastal benefits and strategic advantages of Gujarat Ports.
2. To capture maximum traffic at Gujarat Ports and enhance container
traffic at GMB Ports.
3. To further strengthen its role in liquid and bulk cargo.
4. To develop Gujarat as a Shipbuilding/Repair Hub.
5. To promote various other port led development as Ro-Ro Ferry Terminal
services, Jetty Services, Marine Tourism, and Logistic Parks.
6. To provide services, property and infrastructure support that will promote
private investment.
13. 7. To ensure and protect ecological balance and safeguard social and
environmental issues.
8. To bring innovation and implement latest technology at all ports.
9. To ensure safety and security at all levels of operation
GMB has developed one of the most successful and unique business models of
operation, i.e. coming out of service mode of development to landlord port
development. This model has set a benchmark for other States to follow. Over 3
decades of its presence, GMB has gradually shifted from general bulk cargo
handling to specialized cargo handling. For holistic development of port sector,
GMB is presently pursuing an integrated port development model, covering
Special Investment Region and Port Cities.
3.3 GMB Port Sector structure
Ports
Activity
Captive
Jetties
Gujarat Maritime Board
Ports
PPP Ports /
Jetties
Joint sector
Ports/
Terminals
Private
Ports
GMB
Operated
Ports
Private
Jetties
Ship
Recycling
Yards
Ship
Building &
Repairs
Safety
Training
Institutes
Government of Gujarat /
Ports & Transportation
Department
14. 3.4 Policy initiative of Gujarat for the Port Sector
Year of
Implementation
GoG Policy initiatives
for Ports
Implication for Investor
1982 Formation of Gujarat
Maritime Board (GMB)
All ports in Gujarat (except
the Major Port) come under
the purview of GMB
1987 Captive Jetty Allows private companies to
operate their own jetties in
GMB Ports
1995 Port Policy Allows public private
participation in Gujarat Ports
1997 BOOT Policy Provides operational
flexibility with tariff freedom,
low water-front royalty
1999 GID Law Gives legal framework &
roadmap for PPP
2004 SEZ Act (Gujarat) Paves way for provision of
minor ports and related
services in SEZ in Gujarat
2008 Captive Jetty Expansion Paves way for expansion of
existing captive jetties
2010 Shipbuilding Policy Allows private companies to
develop shipbuilding parks
2012 LNG Terminal Policy Facilitate setting up of new
Greenfield LNG Terminals
and Floating Storage and Re-
gasification Units (FSRUs) in
Gujarat
4.0Role of Andhra Pradesh Port Department
4.1Functions of Port Department:
1. Providing facilities for the export and import of various commodities.
2. Safe Entry and berthing of vessel
3. Discharging of Cargo
15. 4. Warning the ships of all imminent dangers such as cyclones depressions,
etc.
5. Issue of instructions and guidelines to mariners for safe passage of ships
4.2 Privatisation Guidelines (Andhra Pradesh)
A large requirement of capacity creation in ports needs huge investments for
which the Government of Andhra Pradesh have formulated on open policy to
encourage the private sector in Port development. The private sector is invited
to design, build, finance, operate and manage the ports based on their technical
feasibility, projections for traffic and planned investments
4.3 Incentives & Assistance
The investors would be free to fix their own tariff for various port services
without determent to the development of the port in shorter/longer periods.
Concessionaire will be declared as the Port conservator as per Indian Ports Act-
1908.
The investors would also be given complete freedom to follow their own
personnel and employment policy without being governed by the rules and
practices in other Indian Ports.
Government will assist in acquisition of land on payment by the investor.
Wherever port land is available, it will be provided to the parties at the rates
prescribed by the Government.
Land required for those industries which need to be located close to a port to
take advantage of bulk handling of their materials/products, can be acquired on
the basis of feasibility report made by the investor. If the investor wants to own
the land and lease out to industries, such land can be acquired on market price
under Land Acquisition Act.
Government will give all possible help in obtaining fresh water and power
supply to investors
In regard to other incentives for port based industries that are going to be setup,
whatever incentives that are available as on date as per the Government policy
will be extended.
Concession fee of almost 2.5 % of gross income per annum is payable to
Govt in case of Greenfield Ports (Krishnapatnam is a Greenfield port)
16. Wherever feasible Captive Jetties/Captive Ports will be permitted
Suo-moto proposals for development of any Port project or Port facility will be
entertained subject to treatment of the proposals under Swiss challenge
Exemptions on Sales tax, seigniorage charges, Stamp duty etc. will be
considered on case to case basis depending on unviability of the project
GoI initiatives in the Port Sector Implication for Investor
100% FDI Makes way for international
investment
Introduction of tonnage tax Reduces the tax burden on
shipping companies.
Plans for the establishment of 2 international
ship building yards on the east and west
coast through Public Private Partnership
Investors can bid for structured
Projects
5.0 Berthing Policies: Citing the traffic at port many port have declared their
Berthing policies & they follow the same guidelines for giving berth to any
incoming vessel/cargo on a priority basis.
5.1 Adani Port Mundra: As a general rule, Adani port adopts the policy of
First Come First Serve (FCFS) basis. In case more than one vessel requires the
use of a particular berth, the following criteria will be adopted by the Port for
determining the priority for berthing of vessels:
I. The vessel must have completed & submitted all the statutory information
in prescribed & timely format as per government directives. In the event
of any information being incomplete or missing, the vessel’s application
for berth will not be accepted.
II. All the charges as per PAA must be paid in advance.
III. Vessel must have followed at least 5/3/2/1 days notices of Expected Time
of Arrival (ETA).
IV. Vessel which has physically arrived within the port limits and registered
herself with Port Marine Control giving all the vessels particulars.
V. Seniority of a vessel will be counted basis the time of her physical arrival,
filing of IWPM, Cargo readiness, clearance from concerned department.
17. VI. Contractual agreements in place: Customers who have entered into long
term contracts with the Port will be given priority in berthing as per
their contractual terms & conditions. Port will not be liable for
payment of any damages / claims / delays / detentions / demurrages etc.
to vessels, whose berthing is delayed due to berthing of junior vessels
which have been given priority in berthing as per their contractual
agreements.
5.1.1 Priority Berthing:
a. Ousting Priority: If a vessel having an ousting priority for a given berth,
then the working vessel at that berth will be removed from the berth to
accommodate the vessel having ousting priority. The vessel working on
the berth will however be removed only when it is safe to do so.
b. Priority: If a vessel having a priority for a given berth arrives, then she
will berthed ahead of other vessel waiting for that berth once the berth
falls vacant.
c. Overriding Priority: If a berth has been allotted to a specific cargo /
receiver, then these vessels will have priority on that berth. However if a
vessel with overriding priority arrives and requires the use of that berth,
she will be berthed ahead of other waiting vessels having the same cargo /
receivers.
Note: The Port permits priority berthing for vessels carrying government
cargoes (as may be declared from time to time) for which 100% additional
berth hire will be charged as per Port’s discretion.
Priority berthing is also granted to long term contractual partners, as a general
rule, ousting priority is not available. However if the port is forced to grant
ousting priority to any vessel for whatsoever reason, all related charges
including but not limited to viz. shifting, time lost , equipment idling etc. will be
payable by the vessel requesting ousting priority
Berthing Policy adopted by Adani port for FY 15-16 is as follows:
Berth-1 Priority for coal vessels drawing draft less than 15 metres and
displacement less than 90,000 Mt.
Berth-2 , 3 & 4 Priority for Liquid cargo
Berth-5 Priority for fertilizer vessels with overriding priority for IPL
fertilizer vessels
Berth-6 Priority for Fertiliser Vessels
Berth-7, 8 & 9 First Come First Serve (FCFS)
Berth-10 Ousting priority for Welspun vessel, or else priority will be
given to other break bulk and steel cargo vessels
Berth-11 & 12 First Come First Serve (FCFS)
18. WB-1 Ousting priority berth for CGPL vessels
WB-2 Priority berthing for CGPL vessels arriving as per binding
forecast. In case, there are no CGPL vessels waiting for the
berth, then APL vessels gets priority in berthing.
WB-3 AEL vessel will have priority berthing at WB-3 however if
there is a vessel working at WB-4, she will be first
accommodated at WB-3 following the outward of WB-3
vessel. However, if a CGPL vessel makes a request for
priority berthing of its vessel at WB-2 berth, then APL vessel
will get priority in berthing on WB-3 over AEL vessels from
the time of arrival of APL vessel till WB-2 berth become
available for use of APL vessel
WB-4 Priority berthing for non APL and AEL vessels on FCFS
5.2 Kandla Port: Kandla port proposed comprehensive berthing policy for its
10 dry cargo berths and are earmarked for the vessels of the following group:
No. of Berth
Priority 3 Berths
Finished Fertilizer or any other priority accorded by
the government except coastal cargo
2 Berths
Coastal Cargo Vessel 1 Berths
Vessel carrying import cargo 2 Berths
Vessel carrying export cargo 2 Berths
5.2.1 Priority Berthing
(a) The vessels under this group will be berthed one each that can complete
cargo handling operations within 24 hours of berthing, vessels that
can achieve a minimum per berth day output of 10,000 MTs. and
vessels that can achieve a minimum per berth day output of 6,000
MTs/4,500 MTs.
(b)Further, these groups are irrespective of import or export cargo, bulk or
break bulk cargo.
(c) In case any of the above vessel is not available for berthing, the said
berth/(s) will be rotated among the other available vessels in the sequence
of 24 Hrs., 10,000 MTs., 6,000 MT./4,500 MTs. As such we may have
one/two/three each of the above categories of the vessels
working/berthing at a time.
19. 5.2.2 Seniority of a vessel
(a) Seniority of a Vessel will be from the date of submission of readiness by
the Agent during the course of berthing meeting. If the readiness is
declared by the respective Agents during the course of first berthing
meeting after arrival of a ship, the seniority of the said vessel shall be
from the time and date of arrival of vessel at OTB.
In case, subsequently, if the Agent withdraws the Priority and wants to
redeclare the vessel under Priority Group, the seniority will be counted
from 1100 hours of the date of re-declaration for Priority Group.
However, in case of normal export and import group vessels, the Agent’s
option can be exercised without losing the seniority.
(b)Further, in case the Agents cancel the berth after allotment, the seniority
of the said vessel will be counted afresh on all applied priority groups
from the time and date of cancellation excluding normal export or import
group, as the case may be.
5.2.3 Miscellaneous
The sequence of allotment of the berths will be as under:
(1) Government Priority vessels.
(2) Coastal Vessel.
(3) 24 hours Priority vessel.
(4) 10,000 MTs. Priority vessel.
(5) 6,000/4,500 MTs. Priority vessel.
(6) Vessels carrying Import cargo.
(7) Vessels for Export cargo.
In case any of the above group vessels is/are not available, the allotment of the
vacant berth/(s) will be in following order.
(1) Vessel that is ready to occupy the berth for a day.
(2) Vessel ready to occupy for 2 days.
(3) Vessel that is ready to come to berth or 3 days and so on.
The vessel berthed on the above conditions will be shifted out from berth once
the period is over and that vessel will not claim the berth further and if some
cargo operations are left over then the said vessel will complete the same in
stream.
5.3 Chennai Port.
20. In Chennai port, cargo vessels are generally berthed on the principle of first cum
first served basis subject to the berthing guidelines/priorities set out by the
Government of India from time to time.
5.3.1 Priority Berthing:
The following priority shall be adopted in bringing vessels to berths.
1) Vessel in distress
2) Passenger / Cruise vessels
3) Vessels arriving/sailing with explosives.
4) Coastal vessels
5) Vessels calling under priority on payment of charges as per Scale of
Rates (other than vessels carrying explosives)
6) Containers & Pure Car Carrier Vessels
7) Vessels berthed that can complete cargo handling operations within 8 hrs.
8) All other vessels which does not fall under the above categories.
The vessels carrying explosive cargo shall be given priority for sailing also.
5.3.2 Seniority of the Vessel
Arrival registration for seniority of a vessel.
Arrival date and time of a vessel shall be reckoned as the time and date of her
entering the Port limits as reported by the Master communicating to VTMS
which shall be verified based on the radar recording wherever possible.
In cases when the order of arrival of 2 or more vessels is the same, the deciding
factor will then be the order of anchoring as recorded by the Port control.
Anchoring time shall be declared by the Master and that becomes the basis for
deciding the seniority of the vessel in cases where 2 or more vessels arrive at
the same time. However, the master shall declare the anchoring time within a
maximum limit of 30 minutes from the time of anchoring, however, vessels will
be considered for berthing as per seniority / priority after they are ready in all
respects.
6.0 Laytime: Laytime definition as per Baltic & International Maritime
Conference, (Bimco)
‘the period of time agreed between the parties during which the Owner will
make and keep the vessel available for loading or discharging without payment
additional to the freight’.
21. Consequently, when there are delays involved in loading and discharging the
pre-agreed laytime allowed for loading and discharging can be exceeded. If this
is the case, additional freight is due to the Owner.
This additional freight is commonly known as ‘demurrage’.
Before laytime can be calculated, the vessel needs to be fixed first. Every
voyage starts with a fixture. The chartering team of the Owners will fix
(sometimes through the intermediary of a Broker) a cargo for their ship.
The following information will appear in a Fixture Recap
First there is a brief description of the vessel
Thereafter follows the name of the Charterers
Followed by information about the load-/discharge port, cargo type +
quantity, freight rate, laytime, demurrage etc.
Gencon 1994 Charter Party
In the Maritime sector The Gencon 1994 Charter Party rule/guideline is
followed for general and bulk cargoes, generally Charter Party provide you with
all the terms and condition agreed between the owner, Charterer or shipper and
consignor.
Clauses referring to laytime, demurrage are as follows:
Part I,
Clause 16 a, b, c – Confirm the laytime
Clause 20- Confirm the demurrage rate
In part II,
Clause 6, 16 18 refers to conditional laytime clauses.
Part II Clause 6
Let’s take clause 6 immediately apart for a closer look. Clause 6 is for Laytime
a very important clause as it describes exactly the rules to play:
Clause 6a states that there will be a “Separate laytime for loading &
discharging” weather permitting, Sundays & Holidays excepted.
Clause 6c states about commencement of Laytime,
Laytime for loading & discharging shall commence at 13.00 Hours if
NoR is given up to & including 12.00 Hours
Else commence at 06.00 Hours next working day, if NoR given during
office Hours after 12.00 Hours.
22. Please Note: If the loading /discharging berth is not available on the Vessel’s
arrival at or off the port of loading/discharging, the Vessel shall be entitled to
give NoR within ordinary office hours on arrival there, whether in free Pratique
or not, whether customs cleared or not. Laytime or time on demurrage shall then
count as if she were in berth and in all respects ready for loading/ discharging
provided that the Master warrants that she is in fact ready in all respects.
Time used in moving from the place of waiting to the loading/ discharging
berth shall not count as laytime. If, after inspection, the Vessel is found not to
be ready in all respects to load/ discharge time lost after the discovery thereof
until the Vessel is again ready to load/discharge shall not count as laytime.
Time used before commencement of laytime shall count.
Later on 1pm/6am clause is adjusted to Gencon 2pm/8am clause. This is
commonly known as the Gencon 2pm/8am notice clause.
In case when vessel start working before it is 14.00 Hrs. or 08.00 Hrs. this time
before the laytime commences is called “Prior Time”, and if some work is
performed during this period it will not be accounted under laytime. Apart from
this all the breaks (Tea or coffee breaks / Meal breaks) will also be excluded
from laytime calculation.
6.1 Notice of Readiness: Means the notice to Charterer, Shipper, Receiver or
other person as required by the Charter Party that the Vessel has arrived at the
port or berth, as the case may be, and is ready to load or discharge.
A valid NoR is usually subject to:
Being sent by Fax / Email and usually upon arrival the hard copy is to be
handed over to the boarding agent.
Being given during office hours only (usually Monday/Friday 0800-1700
hours)
Not being tendered before the laydays.
Not be tendered until hatch beams have been removed.
Now the question arises that “where can a NoR be tendered” at Port or Berth?
It all depends upon the charter party agreement and terms and condition fixed in
Recap. It will be mention in Recap whether we have Port Charter or Berth
Charter.
In a ‘Port Charter’ the NoR can be tendered from arrival at the port limits which
could already be on arrival at the outer pilot station.
23. In a ‘Berth Charter’ a valid NoR can only be tendered from arrival at the fixed
berth, unless that berth is occupied.
If that berth was/is available, vessel cannot tender NoR from any other place
than that fixed berth, on the other hand if berth is occupied and vessel has to
remain outside at anchorage, the NoR can be tendered from the roads.
Sometimes these clauses are accompanied by the expressions:
Whether In Berth Or Not : WIBON
Whether in Port or Not: WIPON
Whether in Free Pratique or Not: WIFPON
Whether in Customs Clearance or Not: WICCON
Basically, Vessel can tender NoR from the anchorage regardless. Ensure the
Statement of Facts are claused that the berth was occupied on arrival and Notice
of Readiness tendered from the anchorage accordingly. This will make it easier
to support a claim for demurrage.
6.1.1 Notice of Readiness accepted
Special care should be taken to the following wording: ’Notice of Readiness
accepted’. When Master tendered his NoR, he declared his ship is ready to
load/discharge. The time of tendering and acceptance of the NoR should be the
same.
When these times are different, you will often see that the later acceptance time
is a time either shortly after noon or just outside office hours or only the
following day at 09.00hrs, mainly with the purpose of a later commencement of
laytime.
A valid excuse for accepting Notice of Readiness later than when same has been
tendered is, when the Charter Party is claused that ‘Vessel may not tender her
Notice of Readiness before her laydays’ and the vessel has actually arrived
before
the laydays in the port of loading Also acceptable is if the vessel arrived during
the weekend or at night and the Charter Party has been claused that ‘vessel may
only tender the Notice of Readiness during office hours.
Any other reason should be rejected by ships command. To overcome a
discussion between Owners/Agents/Master about ‘accepting’ a Notice of
Readiness later or not, one can agree that instead of ‘accepted’, the Notice of
Readiness has been ‘received’ (by the agent) and ‘time to count as per relevant
Charter Party’.
6.1.2 Notice of Readiness rejected
24. Notice of Readiness can be rejected ‘If, after inspection, the Vessel is found not
to be ready in all respects to load/discharge time lost after the discovery thereof
until the Vessel is again ready to load/discharge shall not count as laytime’.
6.1.3 2nd Notice of Readiness
On fixing and screening a Charter Party one should look out for the provision
that, in case the hold is rejected, the original Notice of Readiness is to be
considered as null and void. Consequently a new Notice of Readiness is/has to
be
tendered. With such a provision the Owners expose themselves to losing big
time waiting for nothing at the anchorage. New Notice of Readiness means new
Notice Clause / Notice time and all the days waiting at the anchorage are
considered ‘null and void’. Hence, a simple rejection of the hold is already
enough to protect Charterers from a huge demurrage claim.
6.2 Statement of Facts:
The Statement of Facts are a true summary of all events happened in the
port/roads pertaining to the vessels call at/off the port. So a summary of all
FACTS.
The Statement of Facts is ‘THE’ document to work from when making a
laytime calculation.
6.3 How to work out available laytime:
There are several possibilities in chartering as to how to agree a certain laytime
for loading and discharging and the most frequently used defined conditions of
laytime are:
Fixed hours – an agreed number of hours for loading or discharging.
Calculated time – an agreed number of metric tons per day.
Total hours – an agreed total time for loading and discharging altogether.
Per hatch per day – an agreed number of MT per workable hatch
6.3.1 Laytime non reversible: This means any time ‘not used’ in load port
CANNOT be added to time in the discharge port (or the other way around).
For example if, on a fixed 24hrs laytime for loading, the cargo is loaded in 20
hours, the 4-hours left or ‘not used’ cannot be added to the laytime allowed in
discharge port.
6.4 Laytime – Calculation:
It is important to analyse all the clause mentioned in charter party agreement
before calculating Laytime of a particular cargo/Vessel,
25. a. Recap of fixture: First find out in the recap how much laytime has been
agreed for loading and discharging.
b. Notice of Readiness from load- and discharge port: Verify when did the
vessel arrive at port / berth. Check NoR Tender timing, also verify of any
particular clause in reference to issue of NoR.
c. Statement of Facts from load- and discharge port: Screen the SoF
carefully.
d. Copy of the relevant Charter Party in order to check
- Notice clause: Check Notice clause as per the agreement. (Gencon Notice
Clause 2pm/8am)
- Prior time: Check Charter Party agreement whether prior time is included
in laytime calculation or it is excluded.
- Weekend clause: If during the port stay a weekend was involved, please
look in the relevant Charter Party for the weekend clause
Friday 5pm / Monday 8am clause: In the Gencon 1994 Charter Party
references are made to additional clauses in the Charter Party specifying the
days/times Charterers consider ‘weekend’. One of the most frequent used
weekend clauses is:
Time from Friday 17.00hrs until Monday 08.00hrs, or from 17.00hrs on the day
preceding a legal/local holiday until 08.00hrs the next working day, are not to
count.
7.0 Tariff Comparison:
Broadly cargo related charges are divided in to three main group viz.
Navigation, Berth & Cargo operation. The detail of including components and
services in the respective groups are as follows:
26. In our (MEPL) case we are being charged by Krishnapatnam port for the
following services like Wharfage, Stevedoring / Handling & dust suppression
(Miscellaneous). For our understanding a comparison of the charges for the
above mentioned services by various port is presented below:
7.1 Wharfage Charges
Port Adani Ennore Chennai Mumbai Kakinada Krishnapatnam
Charges 56.5 130 32.70 76.75 60 30
*Wharfage charges are calculated in Rs. per Metric Tonne basis.
7.2 Cargo Handling Charge/Stevedoring Charges
Port Adani** Ennore Chennai^# Mumbai Kakinad
a
Krishnapatna
m
Charge Rs 150/MT NA 28.40 (Up to 20,000
Basis Units Payer Recipient
Port dues Size of Ship GRT Shipping line Port
Pilotage
Size of Ship
Time
GRT
Hours
Shipping line
Port/
Pilotage
Association
Tug services
Tug Time
involved
Size of Ship
Number
GRT
Shipping line
Port/ Tug
Owner
Mooring/
Unmooring
Size of Ship GRT Shipping line Port
Ancillary services Various Various Shipping line Port
Berth hire
Time of ship
alongside
Size of Ship
Hours
GRT
Shipping line Port
Wharfage
Volume/weight
/size of Cargo
Tonnes/
TEU/m^3
Consignee/
Consignor
Port
Ancillary services
Amount
consumed
Various Shipping line Port
Stevedorage
Volume/weight
/size of Cargo
Tonnes/
TEU/m^3
Shipping line
Provider of
service
Wharf handling
Volume/weight
/size of Cargo
Tonnes/
TEU/m^3
Consignee/
Consignor
Provider of
service
Extra-movement
Volume/weight
/size of Cargo
Tonnes/
TEU/m^3
Consignee/
Consignor
Provider of
service
Special cargo
handling
Volume/weight
/size of Cargo
Type of Special
Handling
Unit Types Shipping line
Provider of
service
Storage Time
Tonnes/
TEU/m^3
Days
Consignee/
Consignor
Provider of
service
Packing/unpacking
Volume/weight
/size of Cargo
Tonnes/
TEU/m^3
Unit Type
Shipping line
Provider of
service
Equipment/
service/ facility
hire
Hours of use by
Item
Hours stevedore
Equipment/
service
Owner
Service
Group
Components /
Type of Services
Charging System
Navigation
Berth
Cargo
Operation
27. to
Rs 200/MT
MT)-242.30
(20000-25000
MT)- 260.03
*Cargo Handling charges are calculated in Rs. per Metric Tonne basis.
# Rs 28.40 /Tonne represent handling of coal through closed mechanized
conveyor system.
**Note: Individual port combined all the services and fix up the tariff based on
individual customer. In case of Adani Port they are charging in the range of Rs
150/MT to Rs 200/MT and it includes all the services like stevedoring and other
miscellaneous services.
7.3 Dust Suppression /Miscellaneous Charges
Port Adani Ennore Chennai Mumbai Kakinada Krishnapatnam
Charges - Rs 5.91/MT
8.0 Conclusion:
Currently Indian port are grouped as Major & Minor Port, wherein Major port
are regulated by Indian Port Act 1908, MPT Act 1963, and their tariff are
regulated by TAMP guidelines, while all Minor ports work under "PPP” mode.
PPP mode of investment has made a significant headway and is preferred for
investments today.
But as per the PPP guidelines all the Minor port are free to fix their tariff for the
services they offer , which needs to be regulated either by the State port
department or by State Maritime Board.
In the present study report we found that there is huge variation in terms of
tariff structure for the services rendered by different Minor Port and we propose
the following suggestions:
Dedicated Coal Berth: It is suggested to have separate coal berth allotted
for berthing of coal at Krishnapatnam Port. Similar kind of model is being
followed by Kamarajar Port (Ennore Port) wherein exclusively 2 berths of
16 MTPA dedicated to TNEB for their coal requirement.
Common user coal terminal: Common user coal terminal should also be
promoted for the private power generator.
28. Berthing Priority: Coal cargo should be considered in priority list and
should be given first preference for berthing.
Tariff Regulator: There should be a separate Tariff regulator for all the
Minor port (At least at a state level) which is responsible for making Tariff
Guidelines.
Enforcement Agency: It is also suggested to have an enforcement agency
who can supervise all the Minor port for their service and Tariff charged as
per the notified regulations.
For e.g. Some port charge separately for Cargo Handling , Stevedoring and Dust
suppression or cleaning while some port club all the services and charge only
one tariff.
Tariff of Indian port (Major /Minor) is always on high side in comparison to the
Tariff charged by any other foreign port. The main reason for the same is in
other country they charge for any services including the charge for the machines
used for doing that work but in India they separately charge for the services and
for the machines.
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