The Jawaharlal Nehru Port Authority and APM Terminals-run Gateway Terminals India Pvt Ltd (GTI) have agreed to create an infrastructure fund of ₹286.55 crore and refund ₹18.1 crore to port users as part of a settlement to resolve a long-running 14-year tariff dispute.
According to the settlement formula worked out by the Conciliation and Settlement Committee (CSC), both JNPA and GTI will contribute to the infrastructure fund and the user refund in a 65:35 ratio, in line with GTI’s revenue-sharing agreement with the port authority.
The settlement agreement, brokered by the CSC headed by former Ports Secretary Gopal Krishna, is expected to be signed before May 21, following a six-week deadline set by the Bombay High Court in its April 10 order.
The dispute dates back to February 2012, when the erstwhile tariff regulator, Tariff Authority for Major Ports (TAMP), reduced GTI’s tariffs by 44.28 per cent. GTI subsequently obtained a stay from the Bombay High Court, allowing it to continue charging the pre-revision rates pending final adjudication.
In 2021, both parties referred the matter to the CSC, an alternative dispute resolution mechanism established by the Ministry of Ports, Shipping and Waterways to settle contractual disputes in the port sector.
The CSC recalculated the surplus and deficit across three periods — before 2012, between 2012 and 2019, and after 2019. For the 2012–2019 period, the panel evaluated six methods based on both physical performance parameters and financial metrics such as Return on Capital Employed (ROCE).
The committee concluded that there was no surplus or deficit under the physical parameter-based methods during 2012–2019. However, financial parameter-based calculations identified a surplus of ₹18.1 crore, which will now be refunded to port users.
The much larger surplus of ₹286.55 crore accumulated before 2012 could not be refunded directly because historical user records were unavailable. Instead, the amount will be utilised for developing infrastructure at the port, with projects to be jointly decided by JNPA and GTI.
Industry sources said the agreement is fully compliant with the 2005 Tariff Guidelines and Bombay High Court directives, while also benefiting port users through infrastructure creation and refund of excess charges.
The settlement is also expected to improve investor confidence in India’s port sector by resolving one of the longest-running commercial disputes involving a global port operator.
Source: ET Infra
