For the first time, PSA Int’l Run BMCT is targeting a performance-based rate increase of 7%

Bharat Mumbai Container Terminals Pvt Ltd (BMCT), the facility operated by Singapore’s PSA
International Pte Ltd at Jawaharlal Nehru Port has requested a 7 per cent performance-related rate hike from the state port authority, the first such instance by a private terminal operator, after the feature was introduced in 2013 to address investor concerns about fee revisions and make port projects attractive.

BMCT began operations in February 2018 with a 30-year contract of one km berth with a capacity of 2.4 million 20-foot units or TEUs per year. The terminal can dock superpost panamax ships.

PSA International is a wholly owned entity of Temasek Holdings (Private) Ltd, the state holding company owned by the Government of Singapore.

PSA International has started work on the second phase of the BMCT, which will add 2.4 million TEUs by 2025 and bring the terminal’s total capacity to 4.8 million TEUs per year. A TEU is the standard size of a container and a common measure of capacity in the container business.

BMCT ended FY23 with a 29 percent share of containers handled at JN Port, India’s busiest state-owned container gateway and the country’s second busiest. The terminal handled 1.714 million TEUs in the year to March, a 37.72 percent growth from the 1.244 million TEUs handled in FY22. It recorded the highest growth rate among the five container terminals operating at JN Port.

JN Port officials said BMCT has applied to the Port Authority for permission to increase tariffs by 7 percent by using the performance-based tariff clause in the concession contract.

BMCT is subject to the tariff guidelines adopted by the government in 2013, which apply to private terminals advertised since then.

The 2013 tariff setting standards allow private cargo handlers operating in major ports to request a performance-based tariff increase of up to 15 percent each year if they meet certain specified performance standards in the previous year.

“We are reviewing the performance parameters submitted by BMCT in support of its request for a 7 percent performance-based rate increase,” a port official said, adding that a decision on the proposal would be finalized in the coming days.

Performance-based tariff revision is available to the terminal operator in addition to annual inflation-linked tariff indexation, with tariffs automatically indexed 60 percent to the Wholesale Price Index (WPI), a measure of costs, in accordance with tariff guidelines set by the government.

Applying the indexation factor, BMCT has announced a rate hike of 7.27 percent from April 1st.

PSA International won the rights to develop and operate the terminal by offering the Port Authority the highest revenue share of 35.79 percent in an auction. It is the largest single foreign direct investment (FDI) in an Indian port project.

The first phase of the terminal, designed to handle 2.4 million TEUs, was built at an investment of Rs4,719 crore. In the second phase, the terminal’s capacity will be expanded by 2.4 million TEU, which will require an investment of Rs3,196 crore.

PSA International also operates container handling facilities at Chennai Port, VO Chidambaranar Port (Thoothukudi) and Syama Prasad Mookerjee Port (Kolkata).

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