Government gives waivers to all port users to support logistic chain

While making it clear that each major ports in the country needs to remain operational during the COVID-19 pandemic and continue cargo operations in all respects, the ministry of shipping has come out with several relief measures to support and rebuild the logistic chain.

According to the Ministry of Shipping, around 95 per cent of India's trading by volume and 70 per cent by value is done through maritime transport.

The government observed that the lockdown measures and associated disruption in the logistic chain have impacted the Indian ports and port users. There is an impact in the form of a drop in imports and exports volumes, delays in the evacuation of cargo and cash flow issues resulting in an inability of port users, concessionaires and other stakeholders to fulfil their obligations to port authorities and bank/lenders.

In view of the extraordinary situation and after considering the representations received from various stakeholders, all major ports are directed on remission of charges to port users.

According to internal communication, to the heads of all major ports, Arvind Chaudhary, Director with the Ministry of Shipping on Tuesday, has directed all ports shall allow free storage time to all port users for the lockdown period. And also allow deferment for April, May and June months, annual lease rentals or license fees on pro-rata bases without any interest, if requested.

As India is the 16th largest maritime country in the world, with a coastline of about 7,517 km and has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. 

The government also asked all ports shall ensure that no penal charges, demurrages, detention charges, dwell time charges, anchorage charges, penal berth hire charges, performance-related penalties are levied on any port users for any delay in berthing, loading or unloading operations or evacuation of cargo during the lockdown period plus 30 days recovery period.

"If requisite additional land is available within the port area, the port shall make all efforts to provide the additional storage land to the users, on temporary bases, without any charges up to June 30.

On the remission of charges to Public-Private Partnership concessionaire, the ministry has observed that due to global pandemic, there is a drop in cargo volume at several public-private partnership berths or terminals in major ports.

While directing on revenue share, royalty and equipment hire related charges, the union ministry has asked all ports shall allow deferment of three months (April-June) revenue, royalty and equipment hire charges without any interest if requested by the concessionaire.

The total traffic handled at Major Ports from April to March 2020 was 704.63 Million Tonnes as against 699.10 Million Tonnes handled during the corresponding period of the previous year, showing an overall growth of 0.82% in the traffic handled.

 On vessel-related charges from shipping lines, the government has directed all ports to allow interest-free 60 days deferment of marine dues to Indian coastal vessels.

 "Ports shall obtain requisite bank guarantee, like security, from coastal vessel operators for the same," the shipping ministry said in its order while adding that "only deferment requests received by May 30 shall be considered."

Referring to an order by the ministry of finance citing a "Force majeure (FM) means extraordinary events or circumstances beyond human control such as an event described as an Act of God (like natural calamity)' has clarified that spread of coronavirus should be considered as a case of natural calamity.

 In view of the finance ministry's order, the ministry of shipping has intimated the major ports that the COVID-19 pandemic shall be considered as a natural calamity that would entitle invocation of force majeure.