CFS operators takes on APSEZ over new extra levy at Hazira Port

The proposed charges is an attempt to fleece the trade for unjust gains and is ill conceived, devoid of any logic, and would increase the cost to the trade by a whopping 50-55 percent, which is completely contrary to the Government of India’s initiatives and stated stand on ease of doing business and to reduce costs of import-export trade, CFSAI said.

Mumbai: The Container Freight Stations Association of India (CFSAI) is taking on the mighty Adani Ports and Special Economic Zone Ltd (APSEZ) over an extra charge that India’s biggest port operator is seeking to levy from CFS operators at Hazira Port, by demanding that the plan be scrapped. In a 25 August Customer Advisory, Adani  Hazira  Port  Pvt  Ltd (HPPL), a unit of APSEZ, which runs the port at Hazira in Gujarat, said it will collect extra charges of Rs2,500 for a 20 ft container and Rs4,000 for 40 and 45 ft boxes from container freight station (CFS) operators when import loaded containers are taken to a CFS as nominated by the lines.

“By seeking to introduce an arbitrary charge without providing any services whatsoever for such charge as proposed, you are simply using your ‘dominant’ position and seeking to bring in and impose a ‘penal tariff’ to be collected from CFS’s, only to cause an appreciable adverse effect on competition in respect of the CFS business,” U mesh Grover, Secretary General, CFSAI, a lobby group for CFS operators, wrote in a strongly-worded 30 August representation to the Chief Executive Officer, Adani Hazira Port.

The Proposed charges, Grover wrote, is “without providing any service and devoid of any justification or reasoning”.  

“Your proposed charges are in sheer abuse of your dominant position in the market and an attempt to destroy competition in the market for choice of CFS which is vested in the trade. Your act and the contents of the Customer Advisory dated 25 August 2023 is in contravention of the provisions of the Competition Act, 2002, as well,” he pointed out in the representation, a copy of which has been marked to the CEO, Gujarat Maritime Board, Secretary, Ministry of Commerce, Special Secretary Logistics, DPIIT, Secretary (Revenue), Ministry of Finance and Secretary, Ministry of Ports, Shipping and Waterways, among others.

The new levy “will make Indian imports and exports through Hazira port more expensive”. There is no rationale to the proposed charges, the same are arbitrary, not justified, nor justiciable, it said.

“Tariff and/or any charge that can be imposed and/or recovered by a port/terminal can only be for any service that is rendered. In the present instance, admittedly, there is no service that the port/terminal is rendering to the CFS’s to entitle the port/terminal to levy, impose and/or recover the proposed charges from the CFS’s. Surely, the concession agreement and the sub-concession agreement in relation to the operation of Hazira Port, would require any charges that you impose to have a co-relation to a service, which is also what has been provided under the Gujarat Maritime Board Act, 1981,” CFSAI explained.

“Furthermore, you have no right and/or authority to levy, impose and recover the proposed charges on containers going to the CFS’s, as for all services that you render to the cargo/containers, you already levy and recover charges from the shipping lines, and there is no justification for the levy presently proposed,” CFSAI wrote. Adani Hazira Port has claimed that the proposed charges were intended to promote ‘ease of doing business and facilitate faster turnaround of CFS’s.

But CFSAI said this was “neither true and/or correct”.  

“We and the trade are completely at a loss to understand how these additional arbitrary charges proposed to be imposed helps either in case of doing business or facilitates faster turn around of CFSs. In fact the Customer Advisory does exactly the opposite. Your Advisory and the proposed charges is an attempt to fleece the trade for your own unjust gains and is ill conceived, devoid of any logic, and the same if brought into effect as proposed would increase the cost to the trade by a whopping 50-55 percent, which is completely contrary to the Government of India’s initiatives and stated stand in relation to “ease of doing business”, and to reduce costs of import-export trade,” CFSAI said

“The Government is seeking to bring down the logistics costs from the existing 12-13 percent to a single digit. Your proposed imposition only further adds to the costs, and in no way assists in ease of doing business, nor in any manner facilitates faster turnaround of CFS’s as claimed. It is obvious that this new proposed charge is to thwart competition to the Port-run CFS from the CFS’s operating near the port, for unjust gains to yourself,” it asserted.

Further, the proposed charges also seek to impede the consignee’s choice of CFS and the direct port delivery (DPD) facility available to the trade per the public notices issued under the Customs Act, 1962, and as such is in “breach of and in contravention of the Customs Act, 1962, and the Public Notices issued thereunder, as well”.

Such an ad-hoc charge/imposition on CFS operators as proposed is “unprecedented, and there is no such charge prevalent at any other port or terminal in India including at Mundra or other ports/terminals operated by the Adani Group”, CFSAI said.

The Customer Advisory and the proposal to impose, levy and recover additional charges from CFS’s in respect of containers moving to CFS’s other than the Port-run CFS is “contrary to law and governing statutes, under which you operate the port/terminal, and which bind you”, CFSAI added, while urging Adani Hazira Port to “desist” from collecting the new levy.