The
trumpet-blowing notwithstanding, the fact remains that the involvement
of the private sector was originally meant to maximise the port
trust's coffers. This has several ramifications. For instance, the
private party has to pay a huge upfront royalty, guarantee a minimum
fee and traffic as well as assure that big shipping lines will call on
the port. At Chennai Port, P&O will have to pay 37 per cent of its
annual revenue as annual fee to the Chennai Port Trust and also
guarantee handling a minimum of 3.5 lakh TEUs in the first year.
This will go up to 4 lakh from the second year onwards.
Additionally, P&O will have to handle 5 lakh TEUs and 8 lakh TEUs
when the new berth and the iron ore terminal are handed over to it.
The company will also invest $100 million on the terminal, remarks
Chennai Port chairman P Bhaskaradoss. In addition, P&O should also
ensure that mother vessels call at Chennai Port. As per the deal, 20
per cent of the total cargo handled by P&O should come from mother
vessels.
According to Bhaskaradoss, the port currently earns around Rs 60 crore
from the container terminal and this is ensured if P&O handles
just 3.5 lakh TEUs. In addition there will be lease charges to be
earned, he adds.
Similarly, PSA Sical Ltd - a joint venture between Ports of Singapore
Authority (PSA) and Sical, Chennai, paid an upfront fee of Rs 4.5
crore with commitment guarantees. Tuticorin Port expects to earn Rs 3,
000 crore from this venture during the license period. The irony is
that none of the port trusts gave any performance guarantee to the
government in all their years of existence.
MP Pinto, secretary, Union Ministry of Shipping, defends the ports
imposition of commitment guarantees on private players. Ports
revenues, after all, are based on the level of
cargo handled by the private player. Concurs Bhaskaradoss, If
they cannot guarantee calling mother vessels to Chennai Port, then
there is no need for private players. Arguments aside, what the
government and port trusts had in mind earlier is a BOT agreement that
is no different from the usual contractual agreement.
also see : The road ahead
Swimming
with their hands tied
The
other point of view
Are
our ports ship-shape?
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