Government moves to avoid JN Port rerun
Mumbai/Bangalore: Stung by a back-to-back, two-month-long
labour dispute at two private container terminals in which it was unable
to intervene, state-owned Jawaharlal Nehru port said the government is
reworking the model concession agreement to include performance
monitoring and penal clauses to prevent such situations in the future.
“The
model concession agreements to be signed with private partners in future
will have a special provision on performance monitoring and a penal
provision for breaching the performance parameters prescribed in the
contract,” N.N. Kumar,
chairman in-charge of JN port, India’s busiest container gateway, said
in Mumbai on Wednesday.
A concession agreement sets out the terms and
conditions of a port contract.
Kumar
said there were no such provisions in the concession agreements that JN
port had signed with its two private container loading facilities—Nhava Sheva International Container Terminal Pvt. Ltd and Gateway Terminals Pvt. Ltd.
At the time when the concession agreements were signed, this kind of a thing was not envisaged.
“But,
with the new concession agreements, the port would be having powers to
penalize the private operators for not complying with certain
performance parameters,” he said.
In any case, private cargo handlers would be ineligible for a performance-linked tariff hike if they don’t comply with performance standards specified in their contracts, according to the new tariff regime for new port contracts that was announced by the shipping ministry in July.
The
Tariff Authority for Major Ports (TAMP), the port tariff regulator, will
notify a reference rate which is indexed to the Wholesale Price Index
(WPI), a measure of costs, to the extent of 60%.
Cargo
handlers will be allowed to charge a maximum 15% more (termed a
performance-linked tariff) than the indexed reference rate, during each
year of a 30-year port contract if they comply with certain performance
standards prescribed by the regulator in the previous year.
The
government’s decision comes after some 40,000 cargo containers piled up
at all the three terminals of JN port, near Mumbai, following a two
month-long labour dispute over wages at two of its private terminals.
The last dispute at Gateway Terminals was called off last week. Run by a joint venture between Denmark’s APM Terminals Management BV and Container Corp. of India Ltd (Concor), Gateway had shut the gates through which export containers are brought to the terminal for nearly a month.This
was the second disruption in less than two months. Last month, another
private terminal at the port—Nhava Sheva International Container
Terminal run by DP World Pvt. Ltd—faced work stoppages over a wage contract dispute, hurting operations for more than two weeks.
Though,
JN port was unable to intervene in the internal matters of its private
terminals, the port authority had issued a show-cause notice to Gateway
seeking reasons for not running the concession agreement properly, said
Kumar.
“GTI
has responded to the show-cause notice and they have explained the
reasons for the labour dispute. We are examining the explanations and
will shortly decide future course of action,” he said.
Meanwhile, containers continue to be re-routed via Pipavav and Mundra ports in Gujarat at an additional cost.
“We
are getting more containers because of the labour dispute at JN port. In
any case, this was a good season for our port as there are a lot of
cotton movement happening through the port,” said a senior executive at Gujarat Pipavav Port Ltd, the entity that runs Pipavav port.
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