Jawaharlal Nehru Port Trust, Mumbai Port Trust draw CAG’s ire

New Delhi: The Comptroller and Auditor General (CAG) of India has charged the Jawaharlal Nehru Port Trust authorities for incurring a loss of Rs 54.72 crore in 2015-17 in their decision to award an adjacent berth to the same entity operating the existing berth at a lower revenue share without safeguarding the financial interests of the port trust.

The port trust suffered the loss since the concessioner Nhava Sheva International Container Terminal (NSICT) diverted the traffic from the existing berth to the new berth. The trust authorities tried to wriggle out, claiming that the adjacent berth was not allotted to the same firm but to Nhava Sheva (India) Gateway Terminal Pvt Ltd (NSIGT). But for the CAG intervention, the loss would have been many folds since the award to NSIGT was for 17 years, the CAG said in one of its reports tabled in the Rajya Sabha on Wednesday on the last day of the monsoon session of Parliament.

The CAG rejected the trust's argument that the two concessionaires were independent legal entities and they were expected to operate the berths independently. It said it was known as early as 2007 that there would be difficulties in separately accounting for revenue from the two contiguous berths if operated by the same entity. It dismissed the port trust's claim of the two concessionaires as independent legal entities, pointing out that both NSICT and NSIGT were 100% subsidiaries of DP World Pvt Limited.

MUMBAI PORT TRUST: The CAG also noted loss of revenue to the tune of Rs 17.13 crore during 2015-17 and undue benefit given by the Mumbai Port Trust to the licencee Indira Container Terminal Pvt Limited (ICTPL) in 2007 to develop two Offshore Container Terminals (OCT) on Build Operate and Transfer (BOT) basis with a revenue share agreement.

The project was to be completed by December 2010 but got delayed due to the PPP operator not getting the security clearance fast. The port trust had to bear an unnecessary dredging cost of Rs 416 crore due to the delay, though the licencee also suffered a loss of Rs 618.20 crore as on March 2017.

The port trust allowed ICTPL to operate another berth of the Ballard Pier Station for five years up to 2012-13. The company, however, defaulted payment of Rs 45.87 crore towards the licence fee and revenue share. Rejecting the trust authorities' claim that no undue financial benefit was extended to ICTPL, the CAG said the company continues to collect berth hire charges at the rate of 130% without approval, which is irregular.

It said the decision to let ICTPL charge tariff at 130% led to undue benefit to the licensee for over two years.

The CAG also noted that the Mumbai Port Trust's failure to revise the casual occupation charges and service charges since 1990-92 led to loss of revenue to the port. Considering the revised charges proposed by the port in May 2002, the loss amounted to Rs 15.10 crore (approx) during April 2012 to March 2017. The CAG said the loss would continue till the Port takes necessary steps to revise these charges or rather till the bye-laws are replaced with fresh regulations.

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