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Reduction in port charges for cruise liners, easier movement of foreign-flagged vessels in works

Lack of development and poor facilities at ports have so far kept passengers and operators away from the sector

, ET Bureau|
Updated: Oct 20, 2011, 05.38 AM IST
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MUMBAI: A high-level panel appointed by the shipping ministry is likely to seek a sharp reduction in port charges for cruise liners, more facilities for passengers at ports and easier movement of foreign-flagged vessels.

Officials said lack of development and poor facilities at ports have so far kept passengers and operators away from the sector that offers huge business potential in India. "The ministry of shipping has set up a steering committee to look into the issues," said K Mohandas, secretary, shipping ministry.

While the government had introduced a cruise shipping policy in 2007, it could not take off due to various reasons. The steering committee is now shaping up several amendments to that policy.

Mohandas said the ministry has identified five ports-Mumbai, Mangalore, Kochi, Chennai and Tuticorin-that could be developed as cruise shipping locations and it is now working on plans to attract investments in these ports.

"There could be part funding (for the development of these ports) from the tourism ministry or it could be implemented on a public-private partnership basis," he said. The committee is also of the view that foreign vessel movement in the country should be facilitated, he said.

Analysts say high port charges was the main reason holding back operators from entering this sector. "Many a times port charges are very high as the passenger ships have a higher tonnage as compared with other vessels," said Anand Sharma, director at Mantrana Maritime Advisory. "The high charges get passed on to the consumers, which acts as an impediment (to the growth of the sector)."

An official said since ports are autonomous bodies, the ministry cannot direct them to reduce charges on cruise vessels. "We will suggest to the Tariff Authority for Major Ports to reduce charges levied on cruise vessels," said Rajeev Gupta, joint secretary, shipping ministry.

The government had set a target of 1 million cruise passenger landings for 2010, but it achieved near nil landings . Several cruise liners have shut operations in the past few years citing poor demand and high port charges. Only one private liner- Amet Majesty, which started operations in October this year - and two state-controlled vessels - Colombo and Lakshwadeep - now offer cruise services along with small ferries by local operators.

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