Asian Shippers Chief applauds Mahinda for move against THC

Monday, 9 December 2013 00:13 - - {{hitsCtrl.values.hits}}

The Asian Shippers Council (ASC) has applauded President and Finance Minister Mahinda Rajapaksa’s 2014 Budget move to make Terminal Handling Charge (THC) imposed by shipping lines illegal. The commendation comes amidst opposition from shipping lines and agents who alleged that the move was a major setback to Sri Lanka’s hub aspirations as well as contravenes an earlier Supreme Court ruling.

“The Asian Shippers’ Council (ASC) applauds the President’s decision. We welcome the announcement by President Mahinda Rajapaksa. For too long we have to put up with multiple charges over and above our freight rates. Many were imposed on us without explanation or justification. Often this has resulted in confusion. Bangladeshi shippers began paying an all-in freight rate six years ago, Sri Lankan shippers will begin paying an all-in rate next year,” ASC Chairman John Lu said. “We take our hats off to the Sri Lanka Shippers’ Council (SLSC) for their key role in fighting for the removal of Terminal Handling Charge (THC) and other surcharges. SLSC’s leadership – both past and present – deserve kudos for working tirelessly in bringing about the much-needed change,” Lu added. According to ASC, the SLSC has lobbied successive governments since the late 1990s for the removal of the THC and other charges. Working together with the Exporters Association of Sri Lanka, the Joint Apparel Association Forum and the National Chamber of Exporters, it has taken every opportunity to raise the issue. “Their perseverance has paid off,” the ASC Chief said. “We join our member, the SLSC, in expressing our appreciation to the President and we look forward to the day when the rest of us in Asia will only need to pay an all-in rate,” Lu added. In its 2014 Budget, Rajapaksa, who Minister of Finance and Planning, announced: “In order to prevent the monopoly pricing in the shipping trade, no shipping line will be permitted to levy terminal handling and other charges in addition to freight and specified international charges for container cargo. Relevant prohibition will be made effective through amendments to the Finance Act, effective from January 2014.” The Asian Shippers’ Council (ASC) was formed on 13 September 2004 to integrate shippers’ councils in Asia into a single entity to protect and promote the collective interests of Asian Shippers. It consists of 19 shippers’ councils from 17 countries in Asia – Korea, China, Hong Kong, Macau, Taiwan, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand, Bangladesh, India, Pakistan and Sri Lanka, with affiliate shippers’ councils in Africa. Shipping industry sources make a strong case as to why such a move is counter -productive to the Government’s vision. The proposed prohibition also runs contrary to a Supreme Court decision in 2007 giving legal effect to the THC with effect from 1/7/2008 through the mechanism of a mediation committee, the report of which was filed in the Supreme Court. The Government’s five hub concept plus tourism, to boost Sri Lanka’s economic development and fast- track poverty alleviation is indeed commendable. The development of port infrastructure and the vision to propel Sri Lanka into the position of a global maritime centre has come in for high praise from the international and local shipping communities. With this backdrop, it is puzzling to note that the government intends to bring in legislation into an area that was hitherto completely ‘commercially driven’ by the global maritime and trading community. This proposed legislation, without a due consultative process with all stakeholders, against an internationally established and accepted practice, notwithstanding a Supreme Court decision in favour of the THC recovery, completely isolates Sri Lanka, to its own disadvantage, from other hubs competing with Sri Lanka. The THC cost recovery is available to shipping lines in these hubs viz Vallarpadam, Singapore, Malaysia and Salalah to name a few. See shipping lines and agents reactions on http://www.ft.lk/2013/12/02/shipping-lines-raise-concern-over-2014-budget-move-on-thc-says-setback-to-hub-aspirations/

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