Shipping Ministry drafts new rate setting Rules for older BOT Cargo Terminals

Posted by Daily Shipping Times on 03-01-2019        Tweet

NEW DELHI: Fifteen cargo terminals run by private firms at Centre-owned Major Port Trusts under a rate regime finalised in 2005 are set to get a fresh lease of life with the Shipping Ministry drafting new tariff setting guidelines that addresses most of their concerns barring its ‘prospective’ application.

Among the changes being proposed include allowing these older cargo terminals to set rates for services to the extent needed for meeting their annual revenue requirement (ARR).

The ARR (a cap) will be the average of actual expenditure for the past three years plus 16 per cent return on capital employed (ROCE) which includes capital work in progress, according to the draft tariff policy circulated by the Ministry for stakeholders’ comments.

The 16 per cent ROCE will be calculated on the gross fixed assets, which is followed for new public-private-partnership (PPP) projects which operate under the rate frameworks finalised in 2008 and 2013. This is a significant departure from the current practice of computing the return on the net block of assets.

The rate set by using the new guideline will be valid for three years and will be indexed annually to the wholesale price index (WPI), a measure of costs, to the extent of 60 per cent.