News / Adani and container train operators again fail to agree on 'illegal' rail charges

09/12/2021

Another meeting attempting to settle the Adani Ports train levy dispute in India ended in failure this week.

Officials from the Association of Container Train Operators (ACTO) had raised concerns at the 1 November 2020 introduction of a terminal access charge of INR7,500 ($99) for use of Mundra Port’s rail infrastructure, following a detention levy of INR5,000 per hour ($66) on 1 July on delayed train turnarounds, imposed by Adani Ports & Special Economic Zone (APSEZ).

In addition, APSEZ cancelled a supervisory role, involving onsite physical inspections, rail operators had previously played in train-loading operations, citing policy reforms to “integrate various operational layers”.

ACTO claimed the charges were illegal by all conventions and inconsistent with the broader concession agreement in place for Mundra, India’s biggest commercial port and called on APSEZ to “immediately withdraw the imposition of this levy and cancel these disputed charges accordingly”.

It added that ACTO had already clarified its position that port facilities developed under government concessions were “common user facilities”, and “therefore do not attract any levy of access charges for service providers/rail operators who are effectively providing evacuation capacity for the port”.

The issue escalated after ACTO asked the Indian Ministry of Railways to intervene and the railway board, in turn, recently asked APSEZ to clarify the basis for levying additional charges on container operators.

ACTO also held the view that container train operators were only service providers for shipping lines and, as such, had no control on the cargo.

“The shipping lines, the actual owners of containers and hold lien on the cargo, are the actual port customers, with clear commercial relationships on services procured from the port for which they are usually charged on a per teu basis,” the group said. “If the port wishes to recover any costs for service, it should accordingly be recovered from lines as their actual customers, and not from rail operators which are service providers and not end users for cargo-related services.”

For shippers already hit hard by high freight rate levels, new inland cost elements would exacerbate the pressure, particularly given that trainloads or inland container depot shipments constitute a major portion of Mundra’s traffic.

But despite rounds of stakeholder discussions, a resolution to the dispute remains elusive.

“We are also informed that individual correspondence has been received by our members applying pressure for settlement of ‘disputed’ dues related to this matter under possible impact on train operations at the port,” ACTO said.

Mundra is India’s largest container handler by volume, having outpaced Jawaharlal Nehru Port Trust (Nhava Sheva) last year.