The Chennai Port Trust (ChPT) will sign a 12-year concession agreement with Hyundai Motor India Ltd on Wednesday for continuing exports of Hyundai cars through the Chennai port.

The port trust has agreed to give concessions in wharfage rate and vessel-related charges for the Korean automobile major. "Hyundai was considering Krishnapatnam and Ennore as alternative ports for car exports. However, we retained them by giving concessions," according to Mr K. Suresh, Chairman, ChPT.

Mr Suresh will sign the agreement with Mr H.S. Lheem, Managing Director, Hyundai Motor India, at a meeting to celebrate 125 years of the port starting commercial operations. The weeklong celebration will feature conferences and exhibitions.

3 other projects

Agreement for five other projects - three at Ennore port and two in Chennai - would also be signed at the meeting. The Tamil Nadu Chief Minister, Mr M. Karunanidhi, would lay the foundation stone for the Rs 492-crore second container terminal at the Chennai port.

As per the incentive-linked concession agreement for Hyundai, taking a base volume of 30,000 units in a calendar year, there will be no concession in wharfage rate for volumes of up to 30,000 units. Till this level, the wharfage rate will be as per the prevailing scale of rates of the port.

The wharfage rate will be 70 per cent of the prevailing scale of rate for volumes between 30,000 and 50,000 units; 50 per cent between 50,001 and 70,000 units; 30 per cent between 70,001 units and 1.50 lakh units; 20 per cent between 1.01 lakh units and 1.50 lakh units and 10 per cent for above 1.51 lakh units, Mr Suresh said.

Currently, the port trust gets revenue of Rs 700 per car and post-concession it would be Rs 400. "The amount is less. However, considering there would be no labour or machinery of the port trust involved, the port trust would get reasonable returns from Hyundai," a senior port trust official said.

From exporting 3,360 cars in the year 2000, Hyundai would increase the number through the port to 1.50 lakh during this fiscal ending March 2007. The volume would be around 3 lakh after Hyundai's second plant, he said.

On vessel-related charges, Mr Suresh said there would be no concession up to 20 car carriers with cumulative GRT (gross registered tonnage) of 10 lakh. From 21-30 vessels, the concession would be 70 per cent of the port trust scale of rates; 31-40 vessels it would be 75 per cent and above 41 vessels it would be 50 per cent, he said.

Hyundai has also agreed "in-principle" to participate in the Rs 48-crore passenger-cum-multi-level car park building that is planned inside the port in North Quay. Ground floor of the building would be used for passenger service and six floors to park around 6,000 cars, he said.