The Shipping Ministry has allowed firms running cargo terminals at state-owned major ports on the public-private-partnership (PPP) mode to defer their April, May and June months' revenue share, royalty and equipment hire charges without any interest.

This is part of a relief package signed off by the Shipping Minister Mansukh Mandaviya to ease the burden on PPP operators, port users and other stake holders hit by the outbreak of the coronavirus.

The revenue share, royalty and equipment hire charges deferred will have to be paid by the PPP operator after interest free period of three months (reckoned month to month - the charges due in April 2020 shall be paid in month of August 2020).

Alternatively, the deferred amount can be paid through six monthly equated instalments at interest rate equal to RBI's 91-days treasury bill (primary) yield rate (as on the due date of initially deferred amount) after expiry of interest free period, according to an order issued by the Ministry late on Tuesday.

The 12 ports have been permitted to waive lease rentals, licence fees and similar charges payable by the PPP operator for three months (April, May and June) to the extent of the reduction in the volume of cargo handled at their facilities compared to the monthly average cargo volume of last calendar year – Jan 1, 2019 to Dec 31 2019.

For example, if the average monthly volume is 10,000 twenty-foot equivalent units (TEUs) based on the cargo handled by the operator from Jan to Dec 2019, and if the cargo volume for the month of April 2020 is 6,000 TEUs (a drop of 40 per cent compared to last year's average monthly volume), the ports shall waive off 40 per cent of the lease rentals, licence fees and similar charges for the month of April 2020.

If such waived amount has already been received by the port, the same will be adjusted in future payments by the operator.

The minimum guaranteed throughput (MGT) obligations (wherever prescribed in the concessionaire agreements) shall be computed, for the respective year, without considering the lockdown period and cargo volume handled during the said period.

The ministry has directed the ports not to levy penalty or charges for shortfall in performance standards such as gross berth output, transit storage dwell time, turnaround time for delivery, store, receipt operations and non-transhipment requirements for the lockdown period plus 30 days recovery period.

The port will provide additional storage area to PPP operators (if requisite additional area is available within the port), on temporary basis, without any charges, rentals, fee till June 30, on an 'as is where is' basis.

Citing a February 19 Finance Ministry order permitting the outbreak of coronavirus to be treated as a ‘natural calamity’ that would entitle invocation of 'force majeure', the Shipping Ministry has allowed ports to extend the period for completion of projects under implementation in PPP mode or otherwise.

The state-owned ports can permit waiver of all penal consequences for PPP projects under operation on a case-to-case basis along with deferment of performance obligations as per relevant provisions of the concession agreements.

The period of force majeure starts from the date of order issued by the Finance Ministry and will end when the competent authority so orders.

Due to the impact of COVID-19 and lockdown measures, there is a drop in cargo volume at several PPP berths/terminals in major ports, making it difficult for the operators to fulfil their obligations to port authorities and banks/lenders.

“Therefore, it is required that some relief measures are taken to support and rebuild the logistic chain,” the Ministry said. Ends/

Related Topics