Congestion threatened as PSA slows down to protest Indian tax
Singapore's PSA International, which operates a container terminal at Tuticorin Port in southern India, has slashed its annual handling capacity by 20 per cent to 300,000 TEU, down from 377,000 TEU achieved last year to protest high tariff levels imposed by the government.
PSA operates the Tuticorin terminal as well as Sical of Chennai. "The decision by the Tariff Authority for Major Ports in September 2006 to halve Tuticorin Container Terminal's revenues has made the terminal commercially unviable because the much reduced revenue per twenty-foot box will not cover the cash operating expenses and royalty payments for every container handled," said unidentified PSA executives.
It noted that the reduction in capacity will lead to "severe delays" for India 's fourth largest container terminal. Ships will be forced to divert cargo to other ports, leading to higher costs for freight forwarders.
