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Ports Authority’s Proposed Fee Hikes Would Generate $13.8 Million In Two Years

Shippers Say Increase Would Be Detrimental To Industry And Consumers


August 21, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

The Puerto Rico Ports Authority is proposing to increase service fees by 24% in the next two years, which would add $11.2 million in 2004 and $2.6 million in 2005 to the agency’s 2003 base revenue of approximately $47 million, said Ports Authority Deputy Finance Director Miguel Calimano.

The Puerto Rico Shippers Association (PRSA) strongly opposes the proposal on the grounds that it would hurt the island’s already competitive shipping industry and consumers who depend on imported goods. Shippers balked at the volume projections in the Ports Authority study, claiming they are too high for what is expected in 2004 and 2005.

Calimano complained that after presenting the final study and the proposed fee hikes to the PRSA, the association hasn’t contacted the Ports Authority to discuss them, preferring instead to take its complaints public. Next week, an examiner chosen by the Ports Authority will lead a public hearing where documents and comments may be presented. The examiner will make a final decision after the hearing.

"We are only doing what Ports Authority law demands of us," said Calimano. "Our agreement with our bondholders demands a reasonable recovery of our debt to maintain our capital debt program."

While individual port-service-fee increases average less than 1%, revised fees would collect $21.3 million in 2004 wharfage revenue, a $1.5 million increase compared with $19.8 million collected in 2003, plus another $837,000 to $22.1 million in 2005.

"The law is clear that the Ports Authority must recuperate its costs," said Calimano. "Forty-five days ago, we submitted a fee study prepared by the agency to the Puerto Rico Shippers Association with our suggestions for new tariffs beginning January 1, 2004. This fee increase has been delayed since July 1, 2002, when the last fee increase was implemented."

According to the Ports Authority, wharfage fees on motor vehicles, containers, liquid cargo, general cargo, and sugar & molasses will bring in an additional $2 million in during 2004. Dockage fees for cruise ships, tankers, and cargo vessels will also increase, generating an additional $3.8 million in 2004 and $610,000 in 2005. Additional increases to fees for cruise passengers and port services will increase revenue by $5.9 million in 2004 and $1.2 million in 2005.

In July, the Ports Authority went through a similar process with the air cargo industry. Fees were raised in accordance with the agency’s needs and negotiations were held with airline industry members. The Ports Authority expects to do the same with members of the maritime cargo industry.

This Caribbean Business article appears courtesy of Casiano Communications.
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