PSA SICAL Terminals Ltd, the entity that runs a container terminal at Central government-owned V O Chidambaranar Port Trust (VOCPT) in Tamil Nadu’s Thoothukudi district, has invoked force majeure in its licence agreement after the volumes slumped by as much as 75 per cent since April 1 due to the combined effects of the coronavirus and lockdown restrictions.
A force majeure clause absolves firms from meeting their contractual commitments for reasons beyond their control.
While notifying VOCPT on its decision to invoke force majeure, PSA SICAL has sought exemption from making any payment to VOCPT either on account of shortfall in the volume of containers handled or on account of any other obligation, including achieving the minimum guaranteed throughput, electricity charges etc and/or any other head of account until the situation entirely normalises, a Shipping Ministry official briefed on the development said.
PSA SICAL further said that its volumes have slumped by about 75 per cent when compared to March 2020, the Ministry official said.
PSA SICAL could not be reached immediately for comment.
It becomes the second privately-run cargo terminal on the public-private-partnership (PPP) mode in a state-owned major port to invoke force majeure after Dakshin Bharat Gateway Terminal Private Limited (DBGT), also operating in VOCPT. Reported on Thursday that DBGT had invoked force majeure.
PSA SICAL is one of India’s oldest private container terminals, starting operations in 1998. It is 51 per cent owned by PSA International Pte Ltd, the world’s biggest container terminal operator and a unit of Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore. The balance 49 per cent stake in the terminal is held by Sical Logistics Ltd, a unit of the Café Coffee Day Group.
PSA-Sical is contractually mandated to handle a minimum guaranteed throughput (MGT) of 300,000 twenty foot equivalent units (TEUs) in a year, translating into 25,000 TEUs a month.