Govt. urged to reduce port charges

KOCHI, DEC. 22. The Cochin Steamer Agents' Association has urged the Government to reduce the port charges and cargo handling expenses.

The president of the association, Mr. M.K.M. Nair, said at the 23rd annual general meeting of the association here the other day that low productivity and high charges were detrimental to the growth of shipping industry in India. He said foreign ports were competing with each other by slashing port charges in order to attract more and more cargo and shipping lines. He also sought reduction in inland haulage charges by the Container Corporation of India.

The association expressed unhappiness over the burden cast on the steamer agents by the workers' pools and sought the port's support for implementing a voluntary retirement scheme (VRS).

The increased cost in cargo handling in Kochi is driving away a sizable volume from the hinterlands to the neighbouring ports like Tuticorin and New Mangalore. This is a matter of concern, he said. The threat from Tuticorin is increasingly high due to its emergence as a mainline vessel calling port in the south, he said.

The association opined that the Kochi port is lagging behind in development works. It stressed the need to revive the Rs. 1,900-crore Vallarpadam international transshipment container terminal. The project is essential for the survival of the port in the long run, Mr. Nair said.

The association expressed concern over the ``unwanted intervention of the North Indian lobby which has vested interests against development of the South Indian ports''. The association accused the Government of pushing out natives to set up shipping companies in other maritime nations where the taxation system is conducive to growth. Nearly 90 per cent of the world's shipping tonnage is free of corporate income tax while Indian shipping companies have to pay a corporate income tax ranging from 23 to 34.5 per cent, including surcharges.

The policy of the ministry does not encourage shipping to grow and there is an acute lack of infrastructure. The association mooted active use of inland waterways and its development should be encouraged to expedite profitable and low cost transportation network.

When the container revolution was taking place, Indian shipping companies did not have enough container vessels. The future lies in oil and LNG transportation, but the Indian shipping industry is not equipped with enough vessels for this activity. Indian shipyards take two to three years to build one vessel whereas Korean or Japanese shipyards take less than one year for building two or three vessels, Mr. Nair said.

The association opined that labour laws should be changed in order to compete with the rest of the world. It urged the Government to implement tonnage tax instead of levying income tax on the income of shipping companies. The association stressed the need to set up more world-class training institutes in India for training more people so as to serve the industry in a better way.

India's container market is expected to grow at around 8.5 per cent in 2002 as against the five per cent this year, but the container freight rates to various world destinations are very low. This phenomenon has been attributed to excess capacity and tonnage in shipping as well as the entry of some new players.

A recent study carried out by the United Nations Economic and Social Commission for Asia and the Pacific predicted that in the next decade, container throughput volumes in the Asia-Pacific ports will rise to at least double the current volumes. The study also points out that developing countries in the region is planning for huge maritime investment strategies.

Singapore is expected to lead the transshipment throughput, followed by China, Hong Kong and South Korea. The developing countries will find it difficult to compete and maintain a presence in the container shipping market unless they find niche markets to tap. All ports would have to upgrade themselves and find hinterland connections which may also include private sector participation, Mr. Nair said.

The association elected Mr. Bharat S. Asher president and Mr. C.S. Kartha vice-president.