Ministry of Shipping provides Relief to Businesses by Exempting Various Port Charges

Amid the ongoing pandemic of COVID-19 and lockdown measures that has disrupted logistic chain and related business (including traders, importers, exporters, port operations, shipping lines and transporters), the Ministry of Shipping has issued certain relief measures under section 111 of Major Port Trust Act,1963 to mitigate their hardships.

The relaxations given by the ministry during the lockdown period (22 Mar - 3 May) in light of disrupted logistic chain of the port and the cash flows of the port users are as below:

Remission of charges to port users:

a)Permission offree storage timeto all the port users for the lockdown period.

b) Deferment of annual leaserentals/license fees for Apr, May and Jun 2020 on pro-rata basis without any interest if requested by lessee/licensee

c) No penalty or other chargessuch as demurrage, detention charges, performance related penalties etc to be levied on any port user for any delay in berthing, loading/unloading operations, evacuation/arrival of cargo during the lockdown period plus 30 days recovery period.

d)Additional land for storageshall be provided to the port users free of cost up to 30 Jun'20 on 'as is where is' basis.

Remission of charges to PPP concessionaire:

a) Ports are requested to allow deferment of Apr-Jun'20 revenue, royalty, equipment hire charges without any interest, if requested by concessionaire.

b)Waiver of lease rentals, licence fees and similar charges for three months Apr-Jun'20 to the extent the volume of cargo dropped compared to monthly average cargo volume of last calendar year.

c) Minimum Guarantee Throughput(MGT)obligations should be computed for 2020 without considering the lockdown period and cargo volume handled during said period.

d) No penalty shall be levied by port forshortfall in any performancestandards for lockdown period + 30 days recovery period. Additional land area if available shall be provided to PPP concessionaire on temporary basis without any additional charges, rentals etc up to 30 Jun'20.

e) Port shall allowinterest-free 60days deferment of marine dues/vessel related charges to Indian coastal vessels if requested by vessel operators.

Invocation of Force Majeure

The order says that COVID-19 pandemic should be considered as natural calamity thus entitling invocation of force majeure provision in as much as obligations under various contracts are concerned. However, the ports are expected to remain operational during the pandemic and continue the cargo operations in all respects.

Exceptions

The waiver/remissions/deferments stated in order shall be extended only to only port related activities, industries and commercial establishment and shall not be applicable on any captive user, central/state govt entities, local bodies, PSUs, CPSEs.

Ministry of Shipping's Notification for all the Indian Ports