The port users in Kochi port are up in arms against the decision of the port management to revise the lease rentals of port land, saying that any increase in the rental charges at this stage will adversely affect the overall cost of the export/import trade.

Sources in the trade fraternity pointed out that the port had forwarded the proposal to Tariff Authority for Major Ports (TAMP) and it is learnt that a hearing would be convened by the TAMP shortly to discuss the issue with the trade. According to sources, many of the port users have their own land taken on lease for 30 years and constructed their own building for running their business.

It is absolutely essential for the port users to have their offices set up at Willingdon Island to carry out the export/import operations efficiently.

Considering this, such steep increase as proposed by the port would detrimentally affect their business prospects leading to increased cost of exports/imports.

Lease agreement

The port had entered into lease agreement with various port users and these lease agreements are executed for 30 years. The lease deed provides for a base rent. The base rent cannot be changed legally during the existence of the period of the lease. It can be done so only at the time of renewal of the lease. Moreover, no modification of the lease rent is permissible during the currency of the lease. Lease being basically an act done by two consenting parties, the Port Trust cannot unilaterally seek a revision of the base rent during the currency of the lease, the sources added.

The port Chairman had constituted a committee last year to reduce the rates and the trade was directed to reduce the cost. Accordingly the trade reduced the rates, but no reduction was made from the side of the port. Instead the port gave a proposal to increase the rates by 40 per cent, which was subsequently approved by TAMP.

Will hit trade

This has made Kochi comparatively disadvantageous in the recent period compared to neighbouring ports due to high handling cost. Apart from this, the present increase in lease rentals would detrimentally affect the trade.

At a time when the port has lined up various developmental projects and measures to woo more cargo from hinterland, these proposals would affect the prospects of the port. With the rates at Kochi for all categories being one of the highest in the country, it is a fact that business is being diverted through other neighbouring ports, the sources said.