At Gateway Terminals India, it should be party time. The third container terminal at the Jawaharlal Nehru port has not only topped in throughput (among the three terminals) but also achieved highest productivity levels in the year ended March 31. GTI handled 1.85 million TEUs, exceeding its last year's throughput by over five per cent.
While its neighbouring rival, NSICT faced labour trouble and congestion, GTI had a smooth sailing backed by its parents' – APM Terminal and Concor-strength.
The GTI Chief Executive Officer, Mr Arvind Bhatnagar, should be celebrating his achievements. Yes, he is. But a bit of disappointment is visible on his face. There are reasons.
Tariff due for review
First, his terminal's tariff, which is governed by the 2005 TAMP (Tariff Authority for Major Ports) guidelines, is coming up for review later this year.
Under these guidelines, if the port's throughput exceeds the projections, the 50 per cent of the gains are passed on to users by way of reduced tariff. If the actual performance exceeds projections, that could lead to a reduction in tariff in the next review.
GTI's handled 1.85 million tonnes in the last fiscal itself as against its projection of 1.58 million tonnes for 2011.
“The terminal has done well, but unfortunately, here efficiency is not rewarded, but penalised,” said Mr Bhatnagar.
Guidelines expiration
Interestingly, the 2005 guidelines which expired in March 2010, were extended for another year up to March 2011. Nobody knows whether the same guidelines are currently applicable or not.
If GTI continues to be governed under the same guidelines, it will be at the mercy of TAMP to effect any upward revision in rates.
Legal battle on bidding
Second, GTI's main promoter – APM Terminals is fighting a legal battle against JNPT's decision not to allow it to bid for the fourth container terminal at the port.
The Supreme Court is expected to deliver its verdict any day now, which will be crucial to the expansion of GTI.
According to the Shipping Ministry guidelines, an operator of a terminal at a major port will not be allowed to bid for a subsequent terminal at the same port.
APM moved the court challenging the JN port's decision, saying that the original bid document did not have the clause and it was added subsequently.
As the Bombay High Court upheld the port's decision, the terminal operator appealed to the Supreme Court.
The court verdict will also be significant for other bidders, as it will clear the uncertainty over awarding the tender for the fourth terminal which has been pending for nearly two years.
According to reports, banks guarantee provided by some of the bidders who had already submitted their bids, will expire by month-end and JN Port had filed an appeal to the court for an early disposal of the case.
Ironically, all the three terminals at the JN port have been working over 100 per cent capacity. The fourth terminal is the only scope now for capacity expansion. If that is delayed further, the port will soon face congestion and slow down in productivity, said Mr S.R.L. Narasimhan, Secretary, Western Indian Shippers Association.
But Mr Bhatnagar says his terminal still has the scope to improve its throughput, provided it gets a higher draft facility that would enable it to handle larger vessels. “This would provide us further economy of scale,” he said.
GTI,a joint venture between APM Terminals and Container Corporation of India – or Concor, which started commercial operation in 2006, is the first port venture of APM group in India. It took over Gujarat Pipavav Terminal Subsequently.
GTI with a quay length of more than 700 m, is capable of handling 2-3 vessels at a time. It offers 16 services a week and all major lines call at the terminal.