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American Shipper

Nhava Sheva users overcharged, says report

Nhava Sheva users overcharged, says report

A government study in India has alleged that the Dubai Ports World-operated Nhava Sheva International Container Terminal near Mumbai has been overcharging users by 80 percent, news outlets reported last week.

   NSICT was India's first privately run terminal within a state-run port trust, and the study said the terminal has generated far more income than the neighboring Jawarhalal Nehru terminal, which is publicly operated. It also portrays in a bad light the Tariff Authority of Major Ports, the country's government-run port tariff regulatory body.

   According to Live Mint, NSICT had returns of roughly $130 million from 2002 to 2005, 'which translated into 100 percent annual return on equity as opposed to the permissible 20 percent set forth in the concession for the terminal.'

   Live Mint also quoted Ganesh Raj, head of the Subcontinent region for DP World, saying the report wasn't true.

   'I cannot comment on this report because it is baseless,' he said. 'The tariff charged by state-owned terminal JNPT and private terminal NSICT is almost the same.'

   The issue of port tariffs has been a regular one in India, with international terminal operators saying they are often hamstrung by restrictive concession agreements that force them to pay steep royalties to port trusts if they exceed minimum cargo volume requirements.

   The report was posted on the Web site of a department within India's Planning Commission, but the commission said the report does not necessarily represent its views on the issue.

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