In what is being viewed as clear fallout of a decisive prod by the Centre, the Board of Trustees at Kolkata Port Trust (KoPT) has taken a landmark decision that could go miles in preventing scams, generating revenue from the 12 major ports and controlling inflationary trends to a great extent.
The Board, which was about a fortnight ago directed by the Ministry of Shipping to auction out shore handling operations at the Haldia Port, on Friday approved the tendering of shore handling of cargo, thereby ending the decades old monopoly of a few chosen companies that had been handling cargo and charging huge costs from exporters and importers without paying a penny to the Government.
The Board decided that it will not be practical to select one agency for entire shore handling operations. It also decided to obtain highest rate of royalty through auction/tender, which will be commonly applicable to all firms willing to undertake shore handling of cargo with valid handling agency licence issued by the KoPT.
As the other major ports will naturally follow the process set by the KoPT, Board insiders said, the decision will not only earn Government hundreds of crores but will also work as a shield against future scams and act as a lever against the inflation to some extent.
The Pioneer for the past few weeks had carried reports on how only Haldia and Kolkata Ports had witnessed scams of more than Rs 24,000 crore in the last four decades with a few private handling agents licking off the cream by manipulating the appointments and deriving the support of the Board of Trustees.
It was shown how the handling agents who was operated illegally on the basis of orders issued by the local authorities were charging the exporters and importers more than 12 times the charges approved by the Tariff Authority at Major Ports (TAMP). While the TAMP prescribed rates were Rs 25 per metric tonne, the private agents were charging Rs 300 per MT without giving any royalty to the port.
Similar such scams that had been taking place in the other 11 major ports in utter violation of Major Port Trust Act could amount to a whopping Rs 8 lakh crore spanning a period of 40 years, The Pioneer had reported.
As per the decision taken by the Board, the ceiling rate (based on KoPT’s cost) has been fixed at Rs 119.48 per MT whereas minimum royalty with the KoPT will be Rs 13 per MT. The ceiling rate based on operator’s cost was to be approved and notified by the TAMP shortly as per Section 42(4) of the MPT Act 1963 and Regulation 7 of the TAMP Guidelines 2005. The present cost to trade at the HDC varied between Rs 200 and Rs 300 per MT.
It was decided that in order to keep the overall port cost competitive, the agents will render shore handling services to the port users within the ceiling level of Rs 119.48 per MP. It was also decided that the firms having experience in dry bulk handling activity in any major port, railway terminal barge terminal, highway project will be eligible to participate in the auction.
The ceiling rate of Rs 119.48 per tonne and consequently the floor rate of royalty of Rs 13 per MT recommended by the committee are based on the Scale of Rate which was prevalent prior to April this year. The SoR has since undergone and upward revision in April the Trustees may consider whether the ceiling rate proposed to be included in the tender should be based on the revised SoR.
Handling agency licence will be issued only to those individual/firm/companies who participate in bidding in the auction and the licence so issued will be valid for two years.
So far as the utilisation of royalty was concerned, the Committee has recommended that the same should be utilised to purchase of annuity to cover the pension liability of KoPT towards retired employees as well as for contribution to KoPT’s superannuation fund.
The proposed scheme on being implemented is expected to bring down the port cost at HDC. As per clause 7 of the Tariff Guidelines, 2005 ceiling rates are to be prescribed for the services common at the concerned ports without reference to individual service provider. The proposal for fixing such charges is to be initiated by “the concerned Major Port Trusts.