Stalemate over extra charges at Hazira Port roils Gujarat paper mills

Vapi-based Gujarat Paper Mills Association said that it “will be forced to shut down the paper mills” after Adani Hazira Port Pvt Ltd (HPPL) stopped delivering containers nominated by the shipping lines to the container freight stations (CFS) as the port operator and the CFS’s argue over an extra charge imposed at Hazira Port.

The Association has also threatened to divert their cargo to Jawaharlal Nehru Port near Mumbai as the extra charges will be recovered from the importers by the CFS operators, rendering imports through Hazira Port unviable.

Adani Hazira Port imposed extra charges of Rs2,500 for a 20 ft container and Rs4,000 for 40 ft and 45 ft boxes from CFS operators when import loaded containers are taken to a CFS as nominated by the shipping lines. Adani Hazira Port also asked the CFS operators to maintain a Pre-Deposit Account (PDA) balance at the terminal from 8 September to facilitate invoicing CFS’s nomination charges for the import laden box.

From 10 September, Adani Hazira Port stopped delivering import-laden containers to the CFSs servicing the port.

“Due to the above there will be an impact in the raw material production at our factory and we will be forced to shut down the paper mills at Vapi,” Sunil Agarwal, President, Gujarat Paper Mills Association wrote in a 12 September letter to the Commissioner of Customs, Ahmedabad, in the first sign that the squabble over extra charges has started to bite importers shipping their cargo through Hazira Port.

“Already we have been facing a huge financial crisis as the waste paper business is becoming non-competitive in India…  The facilitation charges for nomination and other documentation are already being paid to the shipping lines and hence levying the same again on CFS’s and ultimately to be paid by importer is “irrational and also arbitrary,” the Association argued.

“By introducing these charges by Adani Hazira Port, the facility of importer choice of CFS allowed by the Customs and the DPD (direct port delivery) facility available to the importers vide the public notices issued for the same get jeopardized totally,” Agarwal said in the letter.Levying additional charges over and above the THC (terminal handling charges) for no additional activity is “arbitrary and unjustified”, the Association said.

“We are of the view that Adani Hazira Port has no right and/or authority to levy, impose and recover the proposed additional charges on containers going to the CFS. In any case, for all the services they render to the cargo/containers, they already collect “Terminal Handling Charges” which they recover in advance from the shipping lines and the importers pay for the same.” Agarwal added.