shipping industry updates - september 2009

India Shipping Industry

In this issue: Effects of Recession: Global slump strikes jarring note in Major Ports’ growth symphony Downturn stalls Port Pipavav’s LNG terminal plan by a year Growth, Expansion and Developments: Krishnapatnam port on a record-breaking spree Tuticorin Port sets new loading records Mundra Port focuses on greenfield projects KASEZ issuing Form-I for developers to avail of CST waiver All-weather deep-water port coming up in Nagapattinam Real-time data likely to facilitate the shipping sector in India Pipavav Shipyard’s IPO cast-off on 16th September SICL sets new national 1-day record in loading thermal coal at Vizag Port KPT to decide on price bids for 4 new berths today Suttons Group develops chemical drumming facility for global customers Gopalpur port waiting for the word ‘go’ Allcargo Chennai handles 204 TEUs of LCL imports in August

Shipping Industry Updates

Issue No 9

September 2009

Effects of Recession:

Global slump strikes jarring note in Major Ports’ growth symphony

Major Ports are still in the doldrums although the volume of cargo handled by

them increased by some 1.2 per cent during April-July 2009-10, as per Indian

Ports Association (IPA) figures for the period. This confirms the continued

slump in export-import activities. Fiscal 2008-09 had posted a 2.1 per cent

increase in cargo traffic and the peak increase of about 35 per cent was

recorded in 2005-06.

More Downturn stalls Port Pipavav’s LNG terminal plan by a year

The economic downturn has prompted Gujarat Pipavav Port Ltd (GPPL), a

part of APM Terminals, to defer the proposed liquefied natural gas (LNG)

terminal, it is learnt. The Company had signed an agreement earlier this year

with the Mumbai-based Swan Energy to set up the terminal by 2012. Now, it

may be delayed by a year, sources said.

More

Growth, Expansion and Developments:

Krishnapatnam port on a record-breaking spree

Krishnapatnam port sets new national record in single-day loading and vessel

turnaround times despite not being fully-developed Krishnapatnam port, the

private sector mega port coming up in the Nellore district in Andhra Pradesh,

is already hitting the headlines. Even as it is still being developed in phases,

Mundra Port becomes 1st gateway in India to receive Panamax tanker Bharati Shipyard hikes stake in Great Offshore to 22.5% Alpha Vinimay wins contract to develop four new dry cargo berths at Kandla Port UK’s 3i Group keen to invest in more port projects India to invest $18 bn. in ports over next 5-7-years Mundra Port consortium to build mechanical coal handling terminal at Mormugao Port Bharati seeks nod to raise borrowing limit Private port operators likely to be authorised to fix tariffs International Updates: Baltic Dry Index sinks to 10-month nadir with Chinese ore demand dwindling Sharaf Shipping Agency joins hands with SEAL Security to provide unique cover against piracy China’s reduction in iron ore import pulls down BDI Now, long sea voyages won’t spoil refrigerated perishables! Ozone molecules deployed to rid mould, yeasts & bacteria APM TERMINALS bags global ‘Port Operator of Year’ award 2 major AHTSV orders won by Colombo Dockyard MOL completes concept for series of new-generation vessels NYK & Nippon Oil Corporation joint project MOL, Weathernews introduce real-time display system to monitor ship voyages

this port on the East Coast is setting operational benchmarks.

More Tuticorin Port sets new loading records

Tuticorin Port has set a new record by handling 14,407 tonnes of ilmenite ore

at Berth Number 8 on August 30, thereby surpassing the previous record of

11,907 tonnes handled by it on May 17, 2003, a Tuticorin Port Trust (TPT)

release said.

More Mundra Port focuses on greenfield projects

Private port companies in India are keen on setting up greenfield projects in

the country, which are eco-friendly, receives financial assistance from the

government and are able to attract substantial foreign investments.

More KASEZ issuing Form-I for developers to avail of CST waiver

Kandla Special Economic Zone (KASEZ) has taken an important step in the

implementation of a single-window mechanism by which developers will be

issued Form-I to avail of the Central sales tax (CST) exemption. This is

required under Section 26 (g) of SEZ Act, 2005 and Rule 32 of SEZ Rules,

2006.

More All-weather deep-water port coming up in Nagapattinam

The TN government has reportedly approved the development of a captive

port and an all-weather deep-water port in Nagapattinam to be constructed by

Tridem Port and Power Company, thereby opening up business opportunities

for small players in the region.

More Real-time data likely to facilitate the shipping sector in India

Shipping of cargoes and other essential commodities is going to become a

smooth process for ship-owners and vessel companies in India with easy

accessibility to continuous and real-time data, which was earlier not available

in the country.

More

Government Supports and Actions: Govt. promoting e-linking of ports MoS permits commencement of Cochin-Colombo ferry service TAMP notification to benefit the maritime industry Shipping Ministry focusing on divestment and PPPs MoS to ensure non-stop dredging at Haldia Dock Others: Shipping cos. preferring long-term deals despite better returns in spot markets Operational laxity frustrates ship-owners at KoPT KoPT cancels 20-year land lease deal with Navy Indian ports to face challenging year ahead, says report With surplus capacity seen on horizon, shipowners fear dwindling rates MPSEZ’s AAT lifts the bar on car loading rate ABGKCTL chosen for regular coastal box service by Jindal Vector Subdued crude prices pull down OSV rates VPT cuts wharfage charges by 10-20 pc Three Cheers for JNPT! Indian shippers seeking govt. protection in territorial waters New port projects remain at Environment Ministry’s mercy Implementation of GST may trigger more outsourcing to 3PLs Sethusamudram Ship

Pipavav Shipyard’s IPO cast-off on 16th September

Pipavav Shipyard, a private shipbuilding company, promoted by SKIL

Infrastructure and Punj Lloyd, is aiming to raise up to Rs. 513 crore through

an initial public offering (IPO). It has set the price band of its IPO at Rs. 55-60

per share.

More SICL sets new national 1-day record in loading thermal coal at Vizag Port

South India Corporation Ltd (SICL) established a national single-day

stevedoring record at Visakhapatnam Port on September 10 by loading

28,008 tonnes of thermal coal on to the vessel Tamil Anna in west quay berth.

More KPT to decide on price bids for 4 new berths today

The Kandla Port Trust (KPT) Board will on Tuesday (September 15) decide

on the price bids for the four new dry cargo berths to be constructed at an

estimated cost of Rs. 755 crore. Three bidders have submitted price bids—

IMC Ltd, Alpha Vinimay and Mundra Export Ltd, an Adani group company.

More Suttons Group develops chemical drumming facility for global customers

Suttons Group has broadened the range of services available to its customers

with the successful implementation of a chemical drumming facility at St.

Helens in UK. The facility, developed with an investment of £ 1.5 million to

provide drumming, warehousing and despatch services for various

customers, will handle around 90,000 tonnes of products using the latest

drum filling and handling technology to provide safe and effective operations

round-the-year.

More Gopalpur port waiting for the word ‘go’

Gopalpur Ports Ltd (GPL) is confident of converting the small port in southern

Orissa into an all-weather deepwater facility within 24 months, provided the

environmental clearance is given this month, two years ahead of the

stipulated timeframe.

More

Canal project faces dredging hurdle

Allcargo Chennai handles 204 TEUs of LCL imports in August

Allcargo Global Logistics Ltd, one of the leading freight forwarders and the

largest non-vessel operating common carriers (NVOCCs), handled 204 TEUs

of import LCL consol boxes here during August.

More Mundra Port becomes 1st gateway in India to receive Panamax tanker

In a first for any exim gateway in the country, Mundra Port accommodated a

Panamax-size tanker, m.t. Theresa Mediterranean, on September 11. The

vessel has a DWT of 77,788, LOA of 229 metres and a draught of 14.8

metres.

More Bharati Shipyard hikes stake in Great Offshore to 22.5%

Bharati Shipyard raised its stake in Great Offshore to 22.5% by picking up 3%

shares from the market, inching closer to the crucial 26% figure that will give

the company a clear edge over rival ABG Shipyard ahead of their competing

open offers, which are expected to open this month-end.

More Alpha Vinimay wins contract to develop four new dry cargo berths at Kandla Port

The Kandla Port Trust (KPT) has reportedly decided to award the contract for

constructing 4 new dry cargo berths at Tuna port to Alpha Vinimay, which is

to be developed at an estimated cost of Rs. 755 crore.

More UK’s 3i Group keen to invest in more port projects

Noticing immense opportunities in the cargo logistics in the country, the

London-based private equity investor, 3i Group Plc, which has a $ 1.2-billion

infrastructure fund for India, is planning to invest in more port projects.

More

India to invest $18 bn. in ports over next 5-7-years

India is likely to invest $18 billion in ports and over $4 billion in its shipbuilding

industry in the next five-to-seven years, shipping industry players said at a

meet here. Shipping Corporation of India's Chairman and Managing Director,

S. Hajara, who spoke at the meet, said that shipping should be brought under

the infrastructure ambit.

More Mundra Port consortium to build mechanical coal handling terminal at Mormugao Port

The Mormugao Port Trust (MPT) has signed a concession agreement with

the Ahmedabad-based Mundra Port consortium for the development of a

mechanised coal handling terminal at Berth No. 7 under the public-private

partnership (PPP) model.

More Bharati seeks nod to raise borrowing limit

Private shipbuilder Bharati Shipyard is topping up its war chest in the battle to

gain control of Great Offshore, India‟s largest integrated offshore services

provider. Bharati, which already has the approval to raise Rs. 5,000 crore

through various instruments, is planning to seek shareholders‟ nod to raise

the borrowing limit to Rs. 7,000 crore.

More Private port operators likely to be authorised to fix tariffs

The Indian Shipping Ministry has recommended the Union Government to

give private port operators the liberty to fix tariff in 12 major ports in India,

since it is aimed at bringing down port tariffs in the country. Private port

operators in the country are in high spirits with the Government of India

(GoI) mulling to grant them the permission to fix tariffs independently in 12

major ports.

More

International Updates:

Baltic Dry Index sinks to 10-month nadir with Chinese ore demand dwindling

The Baltic Dry Index, a measure of shipping costs for commodities, posted

its biggest monthly slide since October on plunging rentals for iron ore

carriers. The drop is attributed to China‟s reluctance to import more iron ore

following overcapacity in steel, cement and other industries.

More Sharaf Shipping Agency joins hands with SEAL Security to provide unique cover against piracy

Maritime piracy and terrorism has emerged as a formidable threat in the

world, impacting negatively on the seaborne trade and commerce. With the

modern-day grid-locking of international markets and the great dependence

of global economies on steady supplies of energy, goods and merchandise,

the recent upsurge in acts of piracy against commercial shipping off the

Somalia coast is a matter of grave concern.

More China’s reduction in iron ore import pulls down BDI

BDI has plunged by 28% in August, this financial year, which is the biggest

monthly slide since October of the last financial year. Causing a major

setback for the shipping companies in South-East Asia and the rest of the

world, the Baltic Dry Index (BDI), an indicator of the cost of shipping of key

commodities, has plunged terribly.

More Now, long sea voyages won’t spoil refrigerated perishables! Ozone molecules deployed to rid mould, yeasts & bacteria

Purfresh - a provider of clean technologies that purify, protect and preserve

food and water—has unveiled a solution that it says makes ocean transit a

more viable option than air freight for highly-sensitive produce shipped

worldwide.

More

APM TERMINALS bags global ‘Port Operator of Year’ award

APM Terminals worldwide has been acclaimed „Port Operator of the Year‟ by

Lloyd‟s List, an international magazine of repute in the maritime sector, at its

Global Awards held here on September 8. "It is a very proud day for all of us

who are part of APM Terminals," said Group CCO, Mr. Dick Mitchell, who

accepted the award.

More 2 major AHTSV orders won by Colombo Dockyard

Colombo Dockyard PLC has secured a major contract to construct two 130

T BP anchor handling tug-cum-supply vessels (AHTSVs) priced at around

Rs 7 billion, with the option for two more similar vessels.

More MOL completes concept for series of new-generation vessels

Mitsui O.S.K. Lines‟ (MOL) President, Mr Akimitsu Ashida, has announced

that the company has formed the concept for its next-generation vessels,

which will be a technically practical in the near future, by building on and

refining technologies it has already developed and adopted.

More NYK & Nippon Oil Corporation joint project

The solar power-assisted vessel Auriga Leader (gross tonnage: 60,213

tons), which was jointly developed by NYK and Nippon Oil Corporation has

completed seven months of voyages in its scheduled two-year experiment

into how solar power can be used to assist with powering a vessel.

More MOL, Weathernews introduce real-time display system to monitor ship voyages

Mitsui O.S.K. Lines Ltd (MOL) President, Mr. Akimitsu Ashida, and

Weathernews Inc. CEO, Mr. Chihito Kusabiraki, have announced the

development of FMS Globe, a system that displays vessels‟ operational

status as well as marine and terrestrial weather, in real time.

More

Governement Supports and Actions:

Govt. promoting e-linking of ports

The government‟s plan to increase the number of e-linked ports to 70 by

end-2010 is likely to benefit exporters by bringing down transaction costs

and improving communication between ports. A planned move by the Union

government is likely to give the Indian exporters a huge boost.

More MoS permits commencement of Cochin-Colombo ferry service

The Shipping Ministry gives a green signal to the passenger ferry service

from Cochin to Colombo, thereby opening up business opportunities for

private players at the Cochin port. The Ministry of Shipping (MoS) has given

its nod to the proposal for commencing a ferry service between India and

Sri Lanka, which was recently recommended at the South Asian

Association for Regional Cooperation (SAARC) Transport Ministers‟

conference.

More TAMP notification to benefit the maritime industry

TAMP notifies sugar and pulses importers to vacate the godowns at major

ports within 3 days of arrival to prevent hoarding of commodities, the failure

of which will lead to imposition of heavy penalties. A recent notification

issued by the Tariff Authority for Major Ports (TAMP) is expected to provide

a respite to the 12 major ports in the country and the logistics service

providers (LSPs) operating from these ports.

More Shipping Ministry focusing on divestment and PPPs

Apart from signing 20 PPP port building projects, the Indian Shipping

Ministry has recently approved DEA‟s recommendation to divest

government shares in Cochin Shipyard. The Indian Shipping Ministry is

scouting all possible routes to raise money for developing the port and

shipping sector in the country.

More

MoS to ensure non-stop dredging at Haldia Dock

The Shipping Ministry is making all efforts to ensure continuous dredging to

maintain the draught at Haldia Dock, asserted the Shipping Minister, Mr.

G.K. Vasan. "We are aware of the fact and are taking action on a war-

footing.

More

Others:

Shipping cos. preferring long-term deals despite better returns in spot markets

Despite signs of recovery in the tanker segment, the overall freight market

continues to be volatile and shipping companies are preferring to deploy their

vessels in the long-term contract market instead of the spot market. Earnings

from shipping remain uncertain, as global economies are still grappling with

the crisis.

More

Operational laxity frustrates ship-owners at KoPT

Lack of proper coordination at the Kolkata Port Trust and HDC, coupled with

complexities in the vessel logjam system, compel shipping companies to bear

heavy demurrage price. Lack of proper coordination and laxity in cargo

unloading operations at the Kolkata Port Trust (KoPT), the oldest port in India,

and the Haldia Dock Complex (HDC) is jeopardising the cargo-handling

business of several shipping firms.

More

KoPT cancels 20-year land lease deal with Navy

The Kolkata Port Trust (KoPT) wants the Naval authorities to return about 50

acres of land at Haldia Dock which it had leased out some 20 years ago.

KoPT contends the land has not been used so far for the purpose for which it

was leased. It wants to create back-up facilities for its proposed riverfront

jetty.

More

Indian ports to face challenging year ahead, says report

For a majority of Indian ports 2009-10 is going to be yet another challenging

year, much like 2008-09. And if the situation continues the way it is, the cargo

volumes anticipated in the XI Plan estimates may not materialise by 2011-12.

More

With surplus capacity seen on horizon, shipowners fear dwindling rates

Several shipowners are reportedly anticipating shrinkage in freight rates over

12-18 months with surplus tonnage entering the market, and the dismal trade

situation. Despite fears of huge cancellations, most shipyards went ahead

constructing newbuildings because they were already at an advanced stage

and wanted to complete the exercise.

More

MPSEZ’s AAT lifts the bar on car loading rate

Adani Automobile Terminal (AAT) at Mundra Port and Special Economic

Zone (MPSEZ) has achieved a performance high by loading at the rate of 150

cars per hour on the vessel m.v. Hoegh Tokyo which sailed from the Port on

September 5.

More

ABGKCTL chosen for regular coastal box service by Jindal Vector

The ABG Kandla Container Terminal Ltd (ABGKCTL), operated by ABG

Group at Kandla Port, has once again proved to be a preferred facility for

coastal movement, with Jindal Waterways Ltd. commencing a regular

container service.

More

Subdued crude prices pull down OSV rates

With global crude prices ruling low because of the meltdown, the charter rates

of the offshore support vessels (OSVs) have plummetted by 50-60 per cent in

the last 6-8 months. Oil exploration is the first area to be hit by falling prices

and demand due to the high costs and risks involved.

More

VPT cuts wharfage charges by 10-20 pc

The Visakhapatnam Port Trust (VPT) has pruned its wharfage charges by 10-

20 per cent to attract cargo, which has of late started shifting to the nearby

Gangavaram port. This charge is paid for using a wharf for handling goods.

More

Three Cheers for JNPT!

The Jawaharlal Nehru Port Trust (JNPT), the premier container handling Port

(which is also ranked 25th among the Top 30 World Container Ports), has

bagged the coveted „Indira Gandhi Rajbhasha Puraskar‟ (2nd prize) for 2007-

08.

More

Indian shippers seeking govt. protection in territorial waters

Absence of any stringent rule by the Shipping Ministry is allowing foreign

shippers to enter into Indian coasts, thereby posing stiff competition to their

Indian counterparts. Chiefs of a number of Indian shipping companies

recently met the Shipping Secretary APVN Sarma, requesting the

Government of India (GoI) to provide them protection in the country‟s

territorial waters.

More

New port projects remain at Environment Ministry’s mercy

The Environment Ministry has virtually blocked the Shipping Ministry‟s plan to

modernise and expand 20 ports across the country by imposing a temporary

freeze on all of them. The Shipping Minister, Mr. G. K.Vasan, had promised to

award six projects under the National Maritime Development Programme

(NMDP) within 100 days of taking charge.

More

Implementation of GST may trigger more outsourcing to 3PLs

Even though more than 30% of logistics services in foreign nations are

outsourced to third-party logistics (3PL) providers, the picture is quite different

in India. At present, less than 10% of companies have outsourced their

logistics services to 3PL providers.

More

Sethusamudram Ship Canal project faces dredging hurdle

With DCI pulling out dredgers from the controversial Sethusamudram Ship

Canal Project, several mid-sized vessel and ship operators are worried that

their hope of reducing cost of operation for ferrying cargoes between eastern

and western coasts in the country will not materialise.

More

Effects of Recession:

Global slump strikes jarring note in Major Ports’ growth symphony

Exim News Service - 08 September, 2009

NEW DELHI: Major Ports are still in the doldrums although the volume of cargo handled by them

increased by some 1.2 per cent during April-July 2009-10, as per Indian Ports Association (IPA) figures

for the period. This confirms the continued slump in export-import activities. Fiscal 2008-09 had posted

a 2.1 per cent increase in cargo traffic and the peak increase of about 35 per cent was recorded in

2005-06. The slow growth in traffic may hit the Ports‟ capacity utilisation, which has been growing to 34

million tonnes, 24 million tonnes and 23 million tonnes capacity in the last three years. Containerised

cargo traffic, which accounts for close to a fifth of total cargo handled, declined by 2.9 per cent and iron

ore, which accounts for 17 per cent, dipped by 2 per cent. Other products that registered a fall include

coking coal (-24.3 per cent) and finished fertiliser (-3.7 per cent), whose share in total trade was 5 per

cent and 2 per cent, respectively.

However, petroleum, oil and lubricants (POL) products, accounting for close to a third of the total traffic,

went up. While POL traffic rose by 2 per cent, raw fertilisers increased by 3 per cent, thermal coal by

20.4 per cent and other cargo by 8.9 per cent. The slump in cargo handled at Major Ports was not

uniform. Traffic picked up in 6 of the 13 Major Ports, which together handled a little more than half the

total. Three of the six Ports are on the East Coast—Kolkata, Paradip and Tuticorin and the remaining

three on the West Coast—New Mangalore, Mormugao and Kandla. Paradip Port, which handles a tenth

of all cargo, saw tonnage increase by almost 22.2 per cent. Kolkata Port also saw traffic pick up by 18.9

per cent. The Port registering the third-largest gain was Mormugao, which handles about 7 per cent of

the national traffic, where volumes grew by 19 per cent. Tuticorin Port, accounting for less than 5 per

cent of national cargo, saw volumes go up by a robust 11.8 per cent. Kandla, the numero uno Port,

handling around 14 per cent of the national cargo, also saw volumes pick up by 4 per cent in the April-

July period. Paradip Port‟s sharp increase was mainly due to a rise in POL traffic, which increased

almost six-fold.

Top

Downturn stalls Port Pipavav’s LNG terminal plan by a year


MUMBAI: The economic downturn has prompted Gujarat Pipavav Port Ltd (GPPL), a part of APM

Terminals, to defer the proposed liquefied natural gas (LNG) terminal, it is learnt. The Company had

signed an agreement earlier this year with the Mumbai-based Swan Energy to set up the terminal by

2012. Now, it may be delayed by a year, sources said. The Company has 400 hectares of land and a

considerable part of it has been reserved for the LNG project. According to an analyst, the country

needs about 170 mmscmd of gas, double the supply available. LNG is primarily used to transport

natural gas. Once the terminal is set up, the company proposes to carry out the regasification and sell it

to fertiliser and petrochemical companies in Gujarat through an extended pipeline.

Investments for the terminal are proposed to be made by Swan Energy, while Port Pipavav will be

earning from the various charges it proposes to levy, including marine and handling fees. The company

has not disclosed the investments required for the terminal. A total investment of Rs. 13,000 crore has

been made in Port Pipavav so far. The country has two LNG terminals of about 8 mbtu capacity. These

are in operation at Dahej and Hazira, both in Gujarat. Dahej has been set up by Petronet LNG and the

Hazira terminal by Shell. A third LNG terminal is expected to be commissioned this year at Dabhol in

Maharashtra. One more terminal is expected to come up at Kochi. These facilities are expected to

benefit the fertiliser and petrochemical companies, which are primarily on the West Coast.

Top

Growth, Expansion and Developments:

Krishnapatnam port on a record-breaking spree

Shippingbiz360.com – 01 September, 2009

KRISHNAPATNAM: Krishnapatnam port sets new national record in single-day loading and vessel

turnaround times despite not being fully-developed Krishnapatnam port, the private sector mega port

coming up in the Nellore district in Andhra Pradesh, is already hitting the headlines. Even as it is still

being developed in phases, this port on the East Coast is setting operational benchmarks. It has already

set a national record in single-day loading and crossed another milestone by turning around a Capesize

vessel in just 48 hours. The port achieved both the landmarks during August 2009, when Capesize

vessel MV Cape Santa Alegria berthed at the port. A record 50,380 tonne of iron ore was loaded into

the vessel in about 24 hours by using the traditional handling system of shore cranes, breaking the

earlier single-day loading record of 48,889 tonne. However, the new record was broken on the following

day, when 50,870 tonne of iron ore was loaded. The port succeeded to turn around the vessel by

loading 101,250 tonne of cargoes in just 48 hours.

“This is certainly a remarkable feat, especially because the port is still in a developing stage. With the

port showing its capability of handling Capesize vessels, several exporters and importers are likely to be

interested in availing the services provided by the Krishnapatnam port,” said J Jacob, Executive Director

of Century Shipyard, a mid-sized ships parts manufacturer in Cochin. Small and mid-sized logistics and

shipping services companies operating from Krishnapatnam port are also optimistic of a bright future, in

view of the record turnaround times achieved by the port.

“The prospects of the port look good. If it can continue to turn around vessels at such breakneck speed,

it will be able to reduce freight costs, which will be highly beneficial for exporters and importers.

Therefore, the port can procure plenty of consignments in the coming days, which will consequently

give a leg-up to the business of small entities like ours,” said VS Murthy, Proprietor of Mercury Industrial

and Investment Consultants, a small-scale shipping services consultancy firm in Hyderabad. After the

expected completion of the port‟s construction by 2015-16, it will have an annual capacity of handling

200 million tonne (mt.) of cargoes.

Top

Tuticorin Port sets new loading records


TUTICORIN: Tuticorin Port has set a new record by handling 14,407 tonnes of ilmenite ore at Berth

Number 8 on August 30, thereby surpassing the previous record of 11,907 tonnes handled by it on May

17, 2003, a Tuticorin Port Trust (TPT) release said. Similarly, 15,890 tonnes of muriate of potash was

handled in a single day, surpassing the previous record of 14,570 tonnes handled in December 2007.

Top

Mundra Port focuses on greenfield projects


Private port companies in India are keen on setting up greenfield projects in the country, which are eco-

friendly, receives financial assistance from the government and are able to attract substantial foreign

investments. Today when global port companies are adopting various measures to prevent the rapid

pace of climate change, the Indian private port companies are also not keen to stay behind. Increasing

number of leading private port players in the country are now focussing on setting up greenfield projects

in the country. Industry experts believe that this is a new wave that has hit India, which is definitely

going to build a positive image of the Indian port sector before the global companies.

Recently, Mundra Port and Special Economic Zone Ltd (MPSEZL), the Rs 39000 crore worth Adani

Group-promoted company, has announced its plans to set up greenfield projects in the country. As a

part of its plan, MPSEZL at the moment is evaluating the prospect of constructing such projects on the

eastern coast along the Bay of Bengal. D. Sukumaran, MD of Masterstroke Freight Forwarders Private

Limited, a mid-sized freight forwarding company in Chennai, says, “Although very few private port

companies are taking up greenfield projects in the country, in near future more and more companies

would participate in such projects in a much broader scale. At present, only companies with huge

financial strength are investing in such futuristic and eco-friendly projects.”

According to Sanjay Malhotra, Director of BMS Shipping (India) Pvt. Ltd., a mid-sized shipping and

forwarding company in New Delhi, “Today greenfield projects are on the rise, almost in every sector.

Since these projects follow environmental management system and environment impact assessment

(EIA), they receive special assistance from the government. Moreover, such projects attract global

players, who are keen to invest in greenfield projects in India.” Currently, MPSEZL is concentrating on

building cargo-handling facilities and greenfield projects in the coastal areas of Orissa, Andhra Pradesh

and Tamil Nadu under the under the Government of India‟s public-private partnership (PPP) model.

Top

KASEZ issuing Form-I for developers to avail of CST waiver


GANDHIDHAM: Kandla Special Economic Zone (KASEZ) has taken an important step in the

implementation of a single-window mechanism by which developers will be issued Form-I to avail of the

Central sales tax (CST) exemption. This is required under Section 26 (g) of SEZ Act, 2005 and Rule 32

of SEZ Rules, 2006. Form-I is being issued from KASEZ for the whole of Gujarat, in the absence of

which developers of units in SEZs had to approach state government authorities to provide the

necessary exemption. Another notable export promotion measure that KASEZ has implemented is the

setting up of a grievance redressal committee, to facilitate speedy disposal of long-pending disputes.

This forum will also provide suggestions on policy matters wherever necessary.

According to Dr. Maya Kem, Development Commissioner of KASEZ, this committee is expected to meet

every fortnight and find solutions to the problems faced by entrepreneurs. Exports from KASEZ in the

current fiscal up to August 31 were valued at Rs. 811 crore, which is lower than the corresponding

period of 2008-09. This can be attributed to the economic slowdown, explains a KASEZ release. The

eight functional SEZs in Gujarat have together contributed about Rs 34,000 crore to exports till August

2009, which are more than what were registered in the whole of 2008-09. Given the worldwide

recession, these figures are remarkable, emphasises the release.

And with 14 more formally approved SEZs in various stages of development, exports from zones in

Gujarat are all set to witness a massive surge in future. The success story of SEZs in Gujarat has not

only given a boost to the national economy, but also improved the lives of people in the state,

underscores the release.

Top

All-weather deep-water port coming up in Nagapattinam


The TN government has reportedly approved the development of a captive port and an all-weather

deep-water port in Nagapattinam to be constructed by Tridem Port and Power Company, thereby

opening up business opportunities for small players in the region. The private port sector in Tamil Nadu

is set to receive a boost, with the state government reportedly having approved the development of a

captive port at Vettaikaran Iruppu village in Nagapattinam and a seafront limit of 3.2 km to establish an

all-weather deep-water port in the same district. Construction works for both the projects are likely to

commence in September 2009. The projects will be handled by Tridem Port and Power Company,

which was incorporated as a special purpose vehicle (SPV) a couple of years ago. Tridem, which also

proposes to develop a power plant in Tamil Nadu, intends to invest Rs 1,500 crore for the port project.

The requisite amount will be raised through 30% equity and 70% debt.

“Considering that both the port and power project sites are well-connected by road and broad-gauge

railway, it is likely to attract a number of investors,” said CS Kumar, Proprietor of Akash Uni-Safe

Equipment, a mid-sized fire extinguisher manufacturing firm in Chennai. “Therefore, raising funds for the

project should not be difficult,” he added. The proposed all-weather deep-water port will have an annual

cargo-handling capacity of 20 million tonne (mt) in the initial phase. This includes a daily coal-handling

capacity of 40,000 tonne. Initially, 40,000 deadweight tonnage (DWT) coal vessels will be able to call at

the port, which is expected to increase to 1,00,000 DWT vessels after completion of the second phase

of the project. Private shipping and logistics service operators (LSPs), which are mostly small or mid-

sized players, are looking forward to the development of the proposed port at Nagapattinam.

“This will come as a good business opportunity for us, which we look to capitalise upon. Small players

like us need business on a regular basis to sustain ourselves, and this upcoming port may play a key

role in doing that,” said P Prabhu, Proprietor of Sealine Logistics India, a small-sized LSP in Tuticorin.

However, some industry players are concerned by the fact that Nagapattinam was one of the places

that was severely affected by the devastating tsunami in 2004.

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Real-time data likely to facilitate the shipping sector in India


Shipping of cargoes and other essential commodities is going to become a smooth process for ship-

owners and vessel companies in India with easy accessibility to continuous and real-time data, which

was earlier not available in the country. With the help of these data, large as well as comparatively

small-sized vessels, barges and ships can move safely near the ports without the constant fear of

collision with other floating objects. Research analysts and marine scientists in the Indian National

Centre for Ocean Information Service (INCOIS), which is an autonomous institute under the Ministry of

Earth Sciences in Hyderabad, has made a major breakthrough by developing a hi-tech navigation

system, which can provide crucial information to oil tankers, shipping companies and even fishermen

about other moving and floating objects near the entry point of the port.

According to D. Sukumaran, MD of Masterstroke Freight Forwarders Private Limited, a mid-sized freight

forwarding company in Chennai, “Not only shipping companies, but also fishermen can take the

advantage of INCOIS data to boost their business. Especially, the mid-sized shipping firms are likely to

benefit from this data immensely, since it is not always economically possible for such firms to

implement such highly sophisticated navigation systems that come at a high price range.” The latest

innovation has already received accolades from the Maritime Boards of Gujarat, Maharashtra and

Andaman & Nicobar Islands. These Maritime Boards have benefited immensely after using the wave

height data by regulating vessel navigation. At the moment, INCOIS data is being used by shipping

companies and fishermen in and around 80 minor port harbours along various coastlines within the

country.

M. Suresh, Senior Manager of Eagle Maritime Private Limited, a mid-sized shipping company based in

Chennai, says, “Previously, large vessels were not given the permission to enter the minor ports, since

the minor port authorities were not keen to take the risk that large vessels posed while entering such

small ports.” INCOIS has also set up a wave rider buoy network in collaboration with the National

Institute of Oceanography (NIO) in Goa for real-time monitoring of wave and swell conditions.

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Pipavav Shipyard’s IPO cast-off on 16th September


MUMBAI: Pipavav Shipyard, a private shipbuilding company, promoted by SKIL Infrastructure and Punj

Lloyd, is aiming to raise up to Rs. 513 crore through an initial public offering (IPO). It has set the price

band of its IPO at Rs. 55-60 per share. Its issue to sell 85.5 million shares to investors opens on

September 16 and closes three days later. Pipavav Shipyard has an order book of $ 920 million (Rs.

4,462 crore), including 12 offshore supply vessels from government-owned ONGC and an order for 22

dry bulk carriers from three European shipping companies.

"The company is renegotiating with the European clients for its bulk carrier orders and the value of the

order book is likely to be rationalised according to the changed market conditions," the Vice-President,

Mr. Bhavesh Gandhi, had said last week. The shipyard is being built with an investment of Rs. 3,000

crore in Gujarat. Of this, Rs. 2,086 crore has already been invested, with a part of the operation under

way at the yard. The company proposes to use the IPO proceeds for construction of facilities for

shipbuilding, etc.

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SICL sets new national 1-day record in loading thermal coal at Vizag Port


VISAKHAPATNAM: South India Corporation Ltd (SICL) established a national single-day stevedoring

record at Visakhapatnam Port on September 10 by loading 28,008 tonnes of thermal coal on to the

vessel Tamil Anna in west quay berth. This surpasses the Port‟s earlier record of 24,098 tonnes of

thermal coal loaded on to m.v. APJ Akhil in January 2008. Incidentally, the loading was done manually.

In 2008-09, SICL handled 3.44 million tonnes of thermal coal at this Port. In 2009-10, it expects to

handle more than 3.5 million tonnes. Mr. Seeralan of SICL thanked the Port authorities, the shipping

agent J.M. Baxi & Co., and others for extending their co-operation in achieving this national record.

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KPT to decide on price bids for 4 new berths today


GANDHIDHAM: The Kandla Port Trust (KPT) Board will on Tuesday (September 15) decide on the

price bids for the four new dry cargo berths to be constructed at an estimated cost of Rs. 755 crore.

Three bidders have submitted price bids—IMC Ltd, Alpha Vinimay and Mundra Export Ltd, an Adani

group company. These bids were opened on September 9, officials of KPT said. According to them,

four new dry cargo berths will be constructed on build, operate and transfer (BOT) and revenue-sharing

basis. These berths are expected to start operations by September 2011.

"We opened the price bids two days ago and the highest bidder is Alpha Vinimay. However, the Board

will meet on September 15 to take a final decision on the matter and, subsequently, the contract will be

awarded," a senior official of KPT said. Alpha Vinimay has proposed a revenue share of 31 per cent to

KPT, while IMC and Mundra Export have offered 10 per cent and 8.7 per cent, respectively, it is learnt.

"At present, there are 12 berths, and with four more, KPT‟s capacity will go up significantly," the official

added. KPT had invited global tenders and shortlisted 10 firms after the Union government cleared the

move to develop new berths. Nine of the 10 firms received request for qualification (RFQ) and later

three companies finally submitted their price bids.

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Suttons Group develops chemical drumming facility for global customers


MUMBAI: Suttons Group has broadened the range of services available to its customers with the

successful implementation of a chemical drumming facility at St. Helens in UK. The facility, developed

with an investment of £ 1.5 million to provide drumming, warehousing and despatch services for various

customers, will handle around 90,000 tonnes of products using the latest drum filling and handling

technology to provide safe and effective operations round-the-year. As with all Suttons‟ operations,

safety is of paramount importance and the installation uses the latest drum handling technology to

reduce manual handling risks. Safety is further enhanced using dedicated extraction systems and

enclosed automatic and semi-automatic drum filling operations.

The installation has an empty drum storage magazine capable of simultaneously handling 6 different

drum types and a total capacity of 1,584 drums. Two fully-automatic drum filling machines have been

installed, each capable of filling 60 drums an hour, with an additional pallet filler capable of filling

different size drums and intermediate bulk containers (IBCs). The Suttons operation currently handles 5

different product streams, which are delivered into the plant by dedicated Suttons road tankers. The

majority of drums are exported to customers in Asia and in America. Filled drums can either be loaded

directly into containers or diverted to an automatic palletiser for storage and subsequent despatch.

The operation has been designed to provide a "just-in-time" service to Ineos Chlor, minimising the need

to hold large stocks whilst ensuring the high quality of the finished product. Commenting on this

achievement of Suttons International, Mr. Sukumar Mehta, global Group President of Amfico Agencies

Pvt. Ltd. (a K. B. Cooper Group company), which is the sole agent for Suttons International, and which

has been handling all the ISO tank containers since 2001, said, "The combination of Suttons

investment, drumming operation expertise and our excellent relationship with Indian chemical shippers

will deliver a successful, high quality, safe and effective operation. In addition, we are also now looking

at developing our drumming activities in other international markets." Suttons has 80 years of global

experience in transport, storage and bulk logistics and is one of the UK‟s largest privately-owned

specialist logistics companies. Its group headquarters is in Widnes. Suttons International has invested

over £ 3.2 million in the current year by taking delivery of 200 (26,000-litre) baffled tanks, which will

increase its share of business in China and India.

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Gopalpur port waiting for the word ‘go’


BHUBANESHWAR: Gopalpur Ports Ltd (GPL) is confident of converting the small port in southern

Orissa into an all-weather deepwater facility within 24 months, provided the environmental clearance is

given this month, two years ahead of the stipulated timeframe. The phase-II development of the port at

Gopalpur will begin immediately thereafter, the GPL Managing Director, Mr. Mahimananda Mishra, said

here. Mr. Mishra pointed out that GPL, consortium of Orissa Stevedores Ltd and Sara International Ltd,

was able to start operations of the seasonal port within three months of getting clearance, as against

the concessional agreement of 12 months. Though the expert committee of the Union Ministry of

Environment and Forests recommended the issuance of environmental clearance in April 2009, a

formal clearance is pending with the Orissa State Coastal Zone Managing Authority, he explained.

Seventeen consultants of international repute were engaged to conduct studies and all statutory

studies, investigations and engineering, duly vetted by IIT-Madras, were also completed, he added.

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Allcargo Chennai handles 204 TEUs of LCL imports in August


CHENNAI: Allcargo Global Logistics Ltd, one of the leading freight forwarders and the largest non-

vessel operating common carriers (NVOCCs), handled 204 TEUs of import LCL consol boxes here

during August. With operations in 11 major centres in the South, viz., Chennai, Tuticorin, Cochin,

Bangalore, Hyderabad, Tirupur, Karur, Salem, Coimbatore, Pondicherry and Vizag, Allcargo has carved

out a niche for itself by providing better services to the trade. Allcargo is capable of handling the entire

chain in the supply process, right from collecting the cargo from the shipper‟s doorstep, aggregating

LCL cargo, transporting it under bond, re-working it at cargo hubs and arranging its carriage to the final

destination.

As for importers, the company caters to the delivery needs of its clients at various ICD locations through

multi-city consolidation. Ms. Shantha Martin, All India CEO of Allcargo Global, expressed her gratitude

to the trade and well-wishers for their support, which had enabled the company to face challenges with

ease. Mr. Hareram, Regional Manager, Allcargo, South & East India, thanked the trade for its unstinted

support and congratulated the Allcargo team for its unfailing efforts. Allcargo has emerged as a colossal

entity offering various logistics services, cargo consolidation, export and import, LCL and FCL

forwarding, terminal handling of over-dimensional cargo, container transportation logistics and

equipment.

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Mundra Port becomes 1st gateway in India to receive Panamax tanker


MUNDRA: In a first for any exim gateway in the country, Mundra Port accommodated a Panamax-size

tanker, m.t. Theresa Mediterranean, on September 11. The vessel has a DWT of 77,788, LOA of 229

metres and a draught of 14.8 metres. This is yet another „first‟ for Mundra Port and a feather in its cap.

m.t. Theresa Mediterranean carried a cargo of 36,202 tonnes of crude palm oil, 1,500 tonnes of RBD

palmolein and 770 tonnes of crude palm kernel oil. The vessel loaded the oil cargo at Panjang in

Indonesia on August 30. The receiver of the cargo was Adani Wilmar Ltd. (AWL). Unloading was done

at rates up to 656 tonnes per hour. With the oilseed crop affected by lack of rains, imports are expected

to increase. Strategists at AWL believe that they can achieve economies of scale by bringing in large

parcels of vegetable oil. This was a trial shipment and certainly was well implemented. Mundra Port

may be the only gateway to have the capability to handle such massive vessels, which are fully loaded,

at least in the foreseeable future.

Port officials feel that bigger vessels laden with vegetable oil may call in the future. They expect to

handle vegetable oils at over 1,000 tonnes per hour. Besides having adequate tank capacities, the Port

also has a railway siding, which makes it convenient to transport the liquid cargo by BTVN rakes, or

tank containers, to other parts of the country.

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Bharati Shipyard hikes stake in Great Offshore to 22.5%

The Economic Times - 17 September, 2009

MUMBAI: Bharati Shipyard raised its stake in Great Offshore to 22.5% by picking up 3% shares from

the market, inching closer to the crucial 26% figure that will give the company a clear edge over rival

ABG Shipyard ahead of their competing open offers, which are expected to open this month-end.

Bharati Shipyard managing director PC Kapoor confirmed the development. The Mumbai-based ship

builder acquired these shares at an average price of Rs. 558.8 per share, the highest price being Rs.

560. With this, the company‟s offer price for Great Offshore went up to Rs. 560, because if a company

buys shares of the target company at a higher price during an open offer, the offer price will

automatically go up to the new price.

The new offer price is 8% higher than the Rs. 520 a share offer by ABG Shipyard, which currently owns

8.28% in Great Offshore. The applications for open offers of Bharati and ABG are currently pending with

market regulator Sebi. Bharati bought 11.2 lakh shares, including 2.23 lakh from Videocon Industries,

for nearly Rs. 63 crore. Mr. Kapoor did not confirm the identity of the sellers. The transaction

consolidates Bharati‟s position as its shareholding moved closer to the crucial 26% mark. Under the

Indian laws, a shareholder with a 26% stake enjoys some important veto powers. Both ABG and Bharati

make dry bulk carriers and offshore rigs and a controlling stake in Great Offshore will help them become

integrated marine services companies offering services ranging from ship building to offshore drilling

and logistics.

Bharati and ABG have been involved in a takeover battle since June this year to acquire Great

Offshore. In June, ABG launched a hostile bid to acquire Great Offshore at Rs. 373 per share to outbid

Bharati‟s offer at Rs. 344. Since then, both the parties have revised their offers several times. Great

Offshore scrip closed at Rs. 565 on BSE on Wednesday, up almost 5% over the previous close. ABG

Shipyard closed up at Rs. 265.15.

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Alpha Vinimay wins contract to develop four new dry cargo berths at Kandla Port


GANDHIDHAM: The Kandla Port Trust (KPT) has reportedly decided to award the contract for

constructing 4 new dry cargo berths at Tuna port to Alpha Vinimay, which is to be developed at an

estimated cost of Rs. 755 crore. Three bidders were in the fray when the price bids were opened on

September 9. The highest bidder was Alpha Vinimay which quoted Rs. 1,000 crore to develop the

jetties on a public-private partnership (PPP) basis. KPT is also understood to have decided to install two

harbour cranes of 60 tonnes at an estimated cost of Rs. 40 crore at the berth. These 4 berths are

expected to start operations by September 2011. At present, KPT has 12 berths and the new berths are

expected to considerably boost the Port‟s handling capacity.

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UK’s 3i Group keen to invest in more port projects


NEW DELHI: Noticing immense opportunities in the cargo logistics in the country, the London-based

private equity investor, 3i Group Plc, which has a $ 1.2-billion infrastructure fund for India, is planning to

invest in more port projects. Mr. Anil Ahuja, Managing Director of 3i‟s India business and co-head of 3i

Asia, however, declined to identify any port. "India is amazingly short on port capacity," he observed. 3i

reportedly has already invested in the high-potential Krishnapatnam Port Co. on the East Coast and

Mundra Port & Special Economic Zone Ltd in the West Coast. The government has forecast cargo

traffic at seaports to almost double to one billion tonnes by March 2012. As much as 95 per cent of

India‟s global trade is routed by sea and the ports require $20 billion in five years, according to the

Planning Commission. "We‟ve done two ports and our experience in both has been very good," Mr.

Ahuja said. The 12 Major Ports in the country handled 530.4 million tonnes in 2008-09. He explained

that 3i would make its next investment in a company that may be in the power, airports or roads

business.

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India to invest $18 bn. in ports over next 5-7-years

The Economic Times – 24 September, 2009

MUMBAI: India is likely to invest $18 billion in ports and over $4 billion in its shipbuilding industry in the

next five-to-seven years, shipping industry players said at a meet here. Shipping Corporation of India's

Chairman and Managing Director, S. Hajara, who spoke at the meet, said that shipping should be

brought under the infrastructure ambit. He called for a relaxation in the present cabotage law to allow

shipping into the infrastructure sector. Cabotage is the transport of goods or passengers between two

points in the same country. Originally starting with shipping, cabotage now also covers aviation,

railways and road transport. Cabotage is described as trade or navigation in coastal waters, or, the

exclusive right of a country to operate the air traffic within its territory. The national tonnage should be

encouraged so as to increase exports, he said, adding that there should be support from the

Government in making available funds at low interest rates in order to encourage the Indian ship-

building industry. Presently, international players are given loans at lower interest rates in their countries

whereas for Indian firms here, the rates are between 8-13 per cent, he said. There was a need to

provide incentives to Indian ship-builders, he added.

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Mundra Port consortium to build mechanical coal handling terminal at Mormugao Port


MORMUGAO: The Mormugao Port Trust (MPT) has signed a concession agreement with the

Ahmedabad-based Mundra Port consortium for the development of a mechanised coal handling

terminal at Berth No. 7 under the public-private partnership (PPP) model. This was disclosed by the

MPT Chairman, Mr. Praveen Agarwal, in a press release. The agreement was signed by Mr. Agarwal

and the Director of MPSEZ Ltd and Adani Mormugao Port Terminal Ltd (AMPTL), Mr. R. R. Sinha, at

the MPT Office, Headland, Goa, in the presence of the Deputy Chairman of MPT, Mr. P. C. Parida, the

Chief Mechanical Engineer, Mr K.C. Kuncheria and the CEO (Projects), AMPTL, Mr. A.M. Uplenchwar.

The project, to be developed on a design, build, finance, operate and transfer (DBFOT) basis under

PPP model, will give MPT a revenue share of 20 per cent, which works out to roughly Rs. 40 crore a

year. MPT has kept its commitment by awarding the contract as announced by the Union Minister of

Shipping in his 100-day UPA agenda. IL&FS Maritime Infrastructure Company Ltd, Mumbai, and Punj

Lloyd Ltd., Gurgaon, had offered the second-highest revenue share of 14.7 per cent.

Mr. Agarwal said the new terminal, which would be able to accommodate vessels of up to 1,20,000-

DWT, would double the Port‟s coal handling capacity. MPT handles 5.5 million tonnes of coal imports at

present from South Africa, Australia and Indonesia, 4.5 to 5 million tonnes of which go to Karnataka, .5

million tonnes are consumed in Goa and the balance 5 million tonnes are despatched to Maharashtra.

There have been inquiries to enhance the Port‟s coal imports from a new mega thermal power plant

planned for the Bijapur area and steel industries in Sindhdurg, which makes MPT confident of garnering

big business for the new coal terminal, Mr. Agarwal said. The problem of pollution due to manual

handling of coal at Berth Nos. 10 and 11 was a source of serious concern for the citizens of Vasco, Mr.

Agarwal said. The terminal at Berth No. 7 had been devised to minimise the pollution and would be

designed to the highest environmental standards with state-of-the-art dust suppression systems, Mr.

Agarwal explained.

Mormugao Port has already obtained environmental clearance from the Union Ministry of Environment

and Forests and a no objection certificate (NoC) from the Goa State Pollution Control Board. Now,

96,000 sq. metres of land and water area would be handed over to the Mundra-Adani consortium for

development. The Rs. 252-crore project, the construction of which will begin in early 2010, would

become operational by March 2013, the MPT Chairman added. MPT is also spending Rs. 52 crore to

revamp its internal rail network, and South Western Railway has finalised the project for doubling the

Hospet-Vasco line which would serve the Karnataka hinterland. The Konkan Railway‟s Cansaulim-

Majorda bypass in Goa will give the KRC line access to Vasco and serve port connectivity to

Maharashtra and possibly Gujarat as well, Mr. Agarwal revealed.

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Bharati seeks nod to raise borrowing limit

The Economic Times - 28 September, 2009

MUMBAI: Private shipbuilder Bharati Shipyard is topping up its war chest in the battle to gain control of

Great Offshore, India‟s largest integrated offshore services provider. Bharati, which already has the

approval to raise Rs. 5,000 crore through various instruments, is planning to seek shareholders‟ nod to

raise the borrowing limit to Rs. 7,000 crore. Bharati is locked in a takeover battle with India‟s largest

private shipbuilder ABG Shipyard to get control of Great Offshore. “The growing financial requirements

of the company necessitate an upward revision of this limit of Rs. 5,000 crore. The board thought it

prudent to raise this limit up to Rs. 7,000 crore,” Bharati Shipyard said in a note to its shareholders.

Bharati had Rs. 1000 crore debt in its book at the end of March 31, 2009 while its net worth during the

period was Rs. 702 crore. This translates into a debt equity ratio of 1.5, which is considered moderate.

On the asset side, the company reported total current assets of Rs. 2000 crore at the end of FY09.

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Private port operators likely to be authorised to fix tariffs


The Indian Shipping Ministry has recommended the Union Government to give private port operators

the liberty to fix tariff in 12 major ports in India, since it is aimed at bringing down port tariffs in the

country. Private port operators in the country are in high spirits with the Government of India (GoI)

mulling to grant them the permission to fix tariffs independently in 12 major ports. While considering a

recent proposal from the Indian Shipping Ministry, the government has said that if private port operators

are allowed to decide tariffs in the major ports, it would help in bringing down the overall tariff. If the

Shipping Ministry‟s proposal gets the final approval from GoI, it would give the private operators the

liberty to fix tariffs in various port-related activities such as cargo and container handling and

documentation based on the demand and supply factors.

At present, the Tariff Authority for Major Ports (TAMP), the chief port regulatory body in India, is

endowed with the task to fix tariffs for all activities in all the 12 major ports in India. According to Sanjay

Malhotra, Director of BMS Shipping (India) Pvt. Ltd., a mid-sized shipping and forwarding company in

New Delhi, “Keeping in mind the current condition prevailing in the port and shipping industry, this is a

right decision taken by GoI. This will intensify competition among port operators, which in turn will help

to reduce tariff and benefit shipping companies.” In this context, it needs to be mentioned that GoI is

planning to de-link TAMP from port tariff in the future. “Since in most other countries, tariff is fixed

considering the market dynamics, GoI should also walk in the same path to ensure that shipping

companies do not feel the pressure of paying different tariff in different ports within the country, says,

Vishal Patel, Proprietor of Xpress Shipping & Logistics, a small-scale logistics company in Ahmedabad.

Apart from recommending private port operators the right to fix tariff, the Shipping Ministry is also

expected to propose the government to restructure and strengthen the port regulator.

Top

International Updates:

Baltic Dry Index sinks to 10-month nadir with Chinese ore demand dwindling


LONDON: The Baltic Dry Index, a measure of shipping costs for commodities, posted its biggest

monthly slide since October on plunging rentals for iron ore carriers. The drop is attributed to China‟s

reluctance to import more iron ore following overcapacity in steel, cement and other industries. Iron ore

to make steel is the biggest single dry bulk commodity hauled at sea, accounting for 25 per cent of the

total in the second quarter of 2009, according to Drewry Shipping Consultants. "The Chinese are trying

to reduce stockpiles," said one observer. The index tracking transport costs on international trade routes

fell by 4 points, or 0.2 per cent, to 2,421 points on August 28, for a 1.9 per cent retreat, according to the

Baltic Exchange. It dropped by 28 per cent in August, the biggest monthly decline in 10 months.

Vessels are being delivered into the fleet, the observer noted. A greater ship supply would force rates

down without any increase in demand.

The global dry bulk fleet will expand by 14 per cent to 492.8 million DWT this year, according to Drewry

estimates that exclude scrapping, cancelled orders and delays. Daily rents for Capesize ships that

typically haul iron ore and coal slid by 35 per cent to $37,865 a day in August. Smaller Panamaxes that

compete for the cargoes and also carry grains dropped 32 per cent to $17,303 a day. In a related

development, the cost of shipping oil from Middle East to Asia, the world‟s busiest route for

supertankers, slumped for a seventh consecutive session in London as too many vessels competed for

cargoes. Rental income on the benchmark Saudi Arabia-to-Japan route fell by 3 per cent to 30.78

Worldscale points, according to the Baltic Exchange. That‟s a 20 per cent drop for the week. Income

from the voyage after fuel costs slid 45 per cent to $1,302 a day, the lowest for data going back to July

16, 2008.

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Sharaf Shipping Agency joins hands with SEAL Security to provide unique cover against piracy


DUBAI: Maritime piracy and terrorism has emerged as a formidable threat in the world, impacting

negatively on the seaborne trade and commerce. With the modern-day grid-locking of international

markets and the great dependence of global economies on steady supplies of energy, goods and

merchandise, the recent upsurge in acts of piracy against commercial shipping off the Somalia coast is

a matter of grave concern. Continuing with the Sharaf Shipping Agency (SSA) tradition of providing

proactive and cost-efficient services to the maritime community for more than 3 decades, SSA has

joined hands with SEAL Security Solutions to provide professional and protective security solutions for

vessels transiting through the Gulf of Aden. The alliance between Sharaf Shipping and SEAL Security

brings together the resources, expertise and reach of Sharaf Shipping with SEAL Security, a US-based

company which provides customised security solutions to a broad spectrum of industries working in

hostile and difficult environments.

The core features of the service are: a highly-trained security team comprising 6 men and 4 assault

dogs, round-the-clock observers (1 HIGH and 1 LOW) using advanced optics and technology, 24-hour

patrol team on deck and a tactical leader in radio communication with all personnel. The emphasis is on

avoidance and prevention of boarding by pirates. The services include training of the crew on safety

and lock-down procedures in the event of an attack, full co-ordination with the Master of the vessel to

take preventive measures on sighting of pirates and coordination with international and Coalition

Maritime Task Forces. The security teams are available for embarking/disembarking at the strategic

locations of Fujairah, Salalah, Djibouti, Red Sea ports and Egypt. Ensuring complete peace of mind and

instilling in its principals the confidence required to carry out any logistics operation through the piracy-

affected areas are the main objectives of this unique service.

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China’s reduction in iron ore import pulls down BDI


BDI has plunged by 28% in August, this financial year, which is the biggest monthly slide since October

of the last financial year. Causing a major setback for the shipping companies in South-East Asia and

the rest of the world, the Baltic Dry Index (BDI), an indicator of the cost of shipping of key commodities,

has plunged terribly. The BDI has crashed by 28% in August 2009, thereby once again dismantling the

slowly growing confidence in South-East Asia. The current fall in BDI is expected to be the biggest

monthly slide since October of the last financial year. According to analysts and leaders in the shipping

industry, this fall is attributed to China‟s sudden decision to reduce the import of iron ore. However,

China has said in a declaration that it had to stop the import of iron ore because some of its core

industries such as steel and cement have no demand for the same at present. In the recent past, China

had imported substantial amount of iron ore, which had given a decisive push to the BDI.

According to Drewry Shipping Consultants, a London-based independent port and shipping consulting

and publishing firm, iron ore used for making steel has accounted for 25% of the total single dry bulk

commodity transported via sea in the second quarter of 2009. On this issue, Anand Paranjape, MD of

Exim Management Services, a Pune-based export import consultancy firm, comments, “Influential

maritime nations in South-East Asia should understand the vulnerability of the current situation before

taking any drastic decisions that may have a tumultuous effect on the maritime business and also on

the economy of this region.” On a similar note, M. Suresh, Senior Manager in a Chennai-based mid-

sized shipping company, Eagle Maritime Private Limited, says, “In this current economic scenario, the

global leaders of maritime nations in Asia or across the world has to play a defining role in taking

decisions that is beneficial for all industries, including shipping.” According to the BDI, the index tracking

transport costs on global trade routes fell by 4 points to 2,421 points on August 28, 2009.

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Now, long sea voyages won’t spoil refrigerated perishables! Ozone molecules deployed to rid mould, yeasts & bacteria


CALIFORNIA: Purfresh - a provider of clean technologies that purify, protect and preserve food and

water—has unveiled a solution that it says makes ocean transit a more viable option than air freight for

highly-sensitive produce shipped worldwide. Purfresh Transport, based in Fremont here, provides

„ripening control‟ with 100 per cent residue-free decay prevention. The key is deploying „ozone

molecules‟ that kill mould, yeasts and bacteria without affecting the natural characteristics of the

produce, explained a company statement. The company claimed studies and trial results on mangoes,

papayas, ginger and cherries "show significant decreases in mould and decay and an overall increase

in quality, including fruit pressure, weight and sugar content." The company says it monitors and

manages the environment inside a refrigerated container throughout long ocean voyages to enable fruit

and vegetables to arrive fresh at the destination.

"Shippers used to have to rely on costly high-speed liners and air transport to maintain freshness over

long distances. Now, they can avoid rigid delivery timelines and expensive transport while ensuring

safety and quality," explained Purfresh‟s CEO, Mr. David Cope.

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APM TERMINALS bags global ‘Port Operator of Year’ award


LONDON: APM Terminals worldwide has been acclaimed „Port Operator of the Year‟ by Lloyd‟s List, an

international magazine of repute in the maritime sector, at its Global Awards held here on September 8.

"It is a very proud day for all of us who are part of APM Terminals," said Group CCO, Mr. Dick Mitchell,

who accepted the award. "In a very difficult global economic environment which has affected our

industry quite harshly, we are still able to provide our customers with the highest calibre of service. That

is a true testimony of the teamwork and dedication of every member of our organisation", he said. The

APM Terminals senior management executives received the award at a glittering ceremony in the

presence of customers, financial institutions and industry journalists.

The Lloyd‟s List judges selected APM Terminals based on how it continued to expand its portfolio of

terminals at a time of tough economic conditions. Other nominees in contention for the Port Operator of

the Year award were Philippine-based terminal operator International Container Terminal Service, Inc.

(ICTSI), the Port of Valencia and VISET Malta. This is the second time that APM Terminals has bagged

this award. Group company Maersk Line was the winner of the „Safety at Sea‟ award and „Captain of

the Year‟ award went to Captain Richard Philips for his bravery on the Maersk Alabama. Port Pipavav is

a subsidiary of APM Terminals in India. APM Terminals took over the management and operations of

the Port in 2005. It has 54 per cent shareholding in the company and has invested Rs 1,100 crore to

modernise the Port. The Port has been growing steadily in terms of output, customer reach and service

capability. It is poised to become an important gateway port in North-West India.

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2 major AHTSV orders won by Colombo Dockyard


COLOMBO: Colombo Dockyard PLC has secured a major contract to construct two 130 T BP anchor

handling tug-cum-supply vessels (AHTSVs) priced at around Rs 7 billion, with the option for two more

similar vessels. These vessels will be built for Singapore-based owners. The contract was signed here

on September 2. This is the largest capacity vessel (bollard pull) that the Dockyard has contracted in its

35-year history. The vessel design has been developed by Moss Maritime AS of Norway, which has

expertise and experience in designing vessels, platforms and floaters used by the offshore industry.

The vessels are scheduled to be delivered at the end of June and September-end in 2011.

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MOL completes concept for series of new-generation vessels


TOKYO: Mitsui O.S.K. Lines‟ (MOL) President, Mr Akimitsu Ashida, has announced that the company

has formed the concept for its next-generation vessels, which will be a technically practical in the near

future, by building on and refining technologies it has already developed and adopted. The first is a

next-generation, environment-friendly car carrier. MOL continues to work on concepts for other next-

generation vessels such as ferries, bulkships, tankers and containerships. MOL has named the first

concept car carrier ishin one, which stands for Innovations in Sustainability backed by Historically

proven, integrated technologies. The features are as follows:

While in port, and during loading and unloading: Achieve zero carbon dioxide (CO2) emissions.

Further develops the use of renewable energy for conventional car carriers. Realises zero

emission goal by adopting large-capacity solar-power panels and rechargeable batteries.

Under way: Reduce CO2 emissions by 50 per cent (Note)

Adopts multiple new technologies to greatly reduce the vessel's burden on the environment.

Note: The ship achieves a 41 per cent reduction, in comparison (per unit) to conventional vessels

(PCTC with a capacity of 6,400 standard passenger cars).

When needs for larger vessels arise in the future, CO2 emissions can be reduced by 50 per cent on that

assumption.

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NYK & Nippon Oil Corporation joint project


TOKYO: The solar power-assisted vessel Auriga Leader (gross tonnage: 60,213 tons), which was jointly

developed by NYK and Nippon Oil Corporation has completed seven months of voyages in its

scheduled two-year experiment into how solar power can be used to assist with powering a vessel.

Auriga Leader set out on its maiden voyage on December 19, 2008, and completed its fourth voyage on

July 13, 2009, a total of 207 days. By the end of the fourth voyage, the solar-panel system had been

operated for a total of 2,600 hours and had generated 32,300 kilowatt-hours of electricity, equivalent to

seven months of electricity used by 17 households in Japan. The amount generated surprisingly turned

out to be about 1.4 times more than that generated on land in Tokyo. Further research is needed to

determine the exact reason, but the stronger sunlight caused by the high sun altitude and more daylight

are thought to have played a part. Moreover, the wind the vessel encountered cooled the system, thus

improving generating efficiency.

As initially anticipated, solar power was able to provide 0.05 per cent of the ship‟s propulsion power and

1 per cent of the electricity used on the vessel, such as for pumps and lights. This change will reduce

fuel per year by an estimated 13 tons (14 kiloliters) and the carbon dioxide resultantly produced by

approximately 40 tons. Another purpose of this project is to verify the endurance of solar panels in the

harsh conditions of actual navigation. Through the four voyages, the vessel encountered rough

conditions—such as three straight hours of rain and lightning, 20 straight hours of strong wind (about 20

metres/second), and 48 straight hours of waves 3-4 metres high—but the system continued to operate

well.

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MOL, Weathernews introduce real-time display system to monitor ship voyages


TOKYO: Mitsui O.S.K. Lines Ltd (MOL) President, Mr. Akimitsu Ashida, and Weathernews Inc. CEO,

Mr. Chihito Kusabiraki, have announced the development of FMS Globe, a system that displays

vessels‟ operational status as well as marine and terrestrial weather, in real time. FMS Globe stands for

Fleet Management System (ship management system), and Globe (the earth). Weathernews

cooperates fully with MOL to ensure the safe management of MOL-operated vessels. The FMS Globe is

placed in the reception area on the seventh floor of the MOL Head Office at Minato-ku here. This is the

first such comprehensive system introduced in Japan. It stands as a symbol of MOL‟s commitment to

safe operation which is the highest priority for the entire MOL Group, and visually conveys a message

of both companies‟ approach to safety management.

The FMS Globe takes various data from the FMS.SAFETY, the system used to manage the operation

of all vessels at MOL‟s Safe Operation Support Centre. It provides real-time displays of the positions of

all vessels and the latest global weather information that can affect ship operation, including

atmospheric pressure, typhoons, tidal currents, seawater temperature, and clouds. The Safety

Operation Support Centre was set up to provide 24/7 support for MOL-operated vessels in February

2007. Weathernews has supported MOL vessel operation over the years, and assisted in the startup

and operation of the center with the Total Fleet Management Service (TFMS) to support safe vessel

operation of all vessels at sea and in port.

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Government Supports and Actions:

Govt. promoting e-linking of ports


The government‟s plan to increase the number of e-linked ports to 70 by end-2010 is likely to benefit

exporters by bringing down transaction costs and improving communication between ports. A planned

move by the Union government is likely to give the Indian exporters a huge boost. The government

intends to increase the number of electronically linked ports in the country from the current 34 to 70 by

the end of 2010. This move is expected to help exporters bring down transaction costs and thereby

increase their profits. The electronic linking will ensure setting up of electronic systems such as

electronic data interchange (EDI) at ports and electronic message exchange (EME) between Customs

and the Directorate-General of Foreign Trade (DGFT). The DGFT is in the process of connecting ports

and various coastal locations to make them EDI-enabled and thereby facilitate e-trade.

“To be globally competitive, there is a need for more technological upgradation. The government‟s plans

are in the right direction, as the move will not only ease communication between ports, but also make

transactions smoother and more cost-effective for exporters,” said RBA Kumar, GM of PL Shipping and

Logistics, a mid-sized shipping and logistics solutions provider in New Delhi. Usually, exporters have to

deal with various agencies while delivering their goods to foreign shores. In this process, their

consignments are always at the risk of being delayed. Besides, it involves substantial transaction costs.

If more ports are e-linked, there would be multiple benefits for exporters. It will ensure faster movement

of cargoes, simplified procedures for documentation and online approvals. These factors will collectively

help reduce transaction costs of exporters. “Given the prospective benefits of ports being e-linked, more

exporters are expected to avail the port services in the coming days, which will consequently help small

logistics firms engaged in cargo-handling like us to get more consignments,” said S Singh, Proprietor of

Geologistics, a small-sized logistics services company in Ahmedabad. A step-up in the number of

consignments will ensure more revenue generation for the logistics players, which is particularly a prime

requirement for small players in this segment.

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MoS permits commencement of Cochin-Colombo ferry service


The Shipping Ministry gives a green signal to the passenger ferry service from Cochin to Colombo,

thereby opening up business opportunities for private players at the Cochin port. The Ministry of

Shipping (MoS) has given its nod to the proposal for commencing a ferry service between India and Sri

Lanka, which was recently recommended at the South Asian Association for Regional Cooperation

(SAARC) Transport Ministers‟ conference. The proposed ferry service will connect Cochin in India with

Colombo in Sri Lanka. The Ministry is keen to see this service start at the earliest, and has been

enquiring about the facilities provided at the Cochin port, such as immigration and Customs. The

proposal for the ferry service has been accepted by the Ministry of Home Affairs, but it will give its green

signal for the service to start only after examining the security arrangements at the port.

The proposed service is meant for ferrying passengers only. Since the Shipping Corporation of India

(SCI) does not operate vessels for this purpose, it is likely to invite expressions of interest (EoIs) from

private players to assume responsibility for the service. The commencement of the Cochin-Colombo

ferry service is expected to come as a huge boost to the water transport operators in Cochin. “We

expect that the service will draw heavy public demand. Therefore, the requirement for ferries will also be

high. In such an event, small players like us providing boat and ferry services can hope to make

substantial profit out of this venture,” said HN Nikesh, Proprietor of KVP Shipping Agencies, a small-

sized shipping services company in Cochin. Considering that majority of the water transport operators

functioning from the Cochin port are small or mid-sized entities, a step-up in margins will be immensely

helpful for them. “If more revenues come in, we will be able to consolidate our business and also look to

expand it,” said KV Sandeep, Proprietor of Aaron Shipping, a small-sized marine transport company in

Cochin. Given that the government is planning to start a ferry service from Tuticorin as well, the small

water transport operators‟ prospects of expanding business look bright.

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TAMP notification to benefit the maritime industry


TAMP notifies sugar and pulses importers to vacate the godowns at major ports within 3 days of arrival

to prevent hoarding of commodities, the failure of which will lead to imposition of heavy penalties. A

recent notification issued by the Tariff Authority for Major Ports (TAMP) is expected to provide a respite

to the 12 major ports in the country and the logistics service providers (LSPs) operating from these

ports. In a bid to prevent hoarding of essential commodities at major ports, the TAMP has asked sugar

and pulses importers to vacate the godowns at these ports within 3 days of their arrival. The tariff

regulator‟s notification further specifies that importers who fail to empty the godowns within the

maximum permissible time will have to pay a high storage fee. If it extends for 4-10 days, the charges to

be levied for the first 3 days will become double. Further, the charges will become treble for 11-20 days

and four times for 21-30 days. If the goods are not removed within 30 days, it will be ceased, even after

the payment of fines.

“This tough stance undertaken by the TAMP was essential for the maritime industry. With several

importers keeping their goods in the ports‟ godowns, the operations of the ports get hampered. When

fresh cargoes arrive, ports are left with a space crunch to accommodate the goods,” said RD Bhargawa,

CMD of Avignon Shipping Company, a mid-sized custom house agent in Pune. With importers unwilling

to remove their goods from the ports, LSPs engaged in cargo-handling are also suffering. They are

unable to take up fresh consignments, as the lack of space at the port premises affects their operations

as well. “In the absence of new consignments, our business is suffering. Our revenue generation has

slowed down, which is hurting small players like us in particular,” said M. Jayachandran, Proprietor of

Movar International, a small-scale LSP in Indore. Considering that the small logistics firms operate on

paper-thin margins, even a slight dip in business can hit them badly. Therefore, the TAMP‟s decision is

especially significant from the perspective of the small LSPs.

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Shipping Ministry focusing on divestment and PPPs


Apart from signing 20 PPP port building projects, the Indian Shipping Ministry has recently approved

DEA‟s recommendation to divest government shares in Cochin Shipyard. The Indian Shipping Ministry

is scouting all possible routes to raise money for developing the port and shipping sector in the country.

It is believed that the Ministry is aiming to revamp the existing state of infrastructure and mode of

operations in the country‟s maritime sector. To achieve these plans, the Ministry is looking towards

divestment of government shares and undertake projects through public-private partnership (PPP)

mode. In its latest drive to raise funds, the Shipping Ministry has approved Department of Economic

Affairs (DEA‟s) proposal to divest government shares in the in state-run Cochin Shipyard. Cochin

Shipyard, which is the largest ship repair yard in India, had been awarded with Category -1 Miniratna

status in July 2008. Backed by bulk ship building and ship repairing orders from private as well as public

shipping companies, its net profit has jumped by 70% to reach Rs. 160 crore during 2008-09.

According to PV Thomas, Managing Partner of PT Varghese and Co, a mid-sized shipping firm in

Cochin, Kerala, opines, “It is highly commendable that even in this trying times, Cochin Shipyard has

emerged as one of the biggest revenue generating ship yard of the Indian Government.” Shipping

Secretary, APVN Sarma has recently announced that the Shipping Ministry has given its full support to

the recommendations forwarded by DEA. It is expected that the DEA will very soon propose

government for 10% disinvestment in Public Sector Undertaking Units (PSUs). Mr. Sarma also said that

the Shipping Ministry has decided to sign 20 PPP schemes in port projects this year. Shajan Joshi,

Manager of PL Shipping & Logistics, a small-scale shipping firm in Cochin, says, “The cash-starved

Shipping Ministry is taking the right approach at this point to undertake port projects through PPP

schemes without taking the financial pressure solely on its own shoulder.” In a bid to boost maritime

trade and encourage shipping companies, the Shipping Ministry has already started working on

formulating a flexible taxation regime.

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MoS to ensure non-stop dredging at Haldia Dock


CHENNAI: The Shipping Ministry is making all efforts to ensure continuous dredging to maintain the

draught at Haldia Dock, asserted the Shipping Minister, Mr. G.K. Vasan. "We are aware of the fact and

are taking action on a war-footing. We are sending more dredgers to Haldia, which is an important and

efficient Port," he told newsmen here. There was a sudden drop in the depth of the Hooghly at

Auckland. The draught at Haldia Dock fell by 0.3 metre, and between October 1 and 15 by another 0.4

metre.

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Others:

Shipping cos. preferring long-term deals despite better returns in spot markets


HYDERABAD: Despite signs of recovery in the tanker segment, the overall freight market continues to

be volatile and shipping companies are preferring to deploy their vessels in the long-term contract

market instead of the spot market. Earnings from shipping remain uncertain, as global economies are

still grappling with the crisis. The outlook for 12-18 months is also not very bullish, said an industry

source. Analysts say that India and China are the current key growth drivers and the freight market

movement will largely hinge on how these two countries handle their economies. Overall, freight rates

for tankers (ships that carry crude oil and liquids) have sunk by about 40-60 per cent over last year,

while dry bulk carriers earn about 70 per cent less than last year, an analyst calculated. In order to

hedge themselves from the risk of a volatile freight market, shipping companies are now deploying more

ships in the long-term market, although the spot market is usually known to yield better returns.

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Operational laxity frustrates ship-owners at KoPT


Lack of proper coordination at the Kolkata Port Trust and HDC, coupled with complexities in the vessel

logjam system, compel shipping companies to bear heavy demurrage price. Lack of proper coordination

and laxity in cargo unloading operations at the Kolkata Port Trust (KoPT), the oldest port in India, and

the Haldia Dock Complex (HDC) is jeopardising the cargo-handling business of several shipping firms.

Since almost 20 days, around 40 shipping vessels, carrying different kinds of essential commodities

worth crore of rupees, are marooned at the KoPT and Haldia port due to complications in the vessel

logjam system. Under such circumstances, D. Mukherjee, Executive Director of Tara Marine Syndicate,

a mid-sized container management company in Haldia, says, “This is unacceptable for a port authority

that dates back to 139 years ago. The concerned port authorities should realise that being trapped in

this situation, each shipping line is compelled to bear an additional financial burden of US$10,000 per

day as demurrage.”

Shipping firms, importers, clearing agents, ship-owners and stevedores are complaining that KoPT is

plagued by several problems and the most notable among them are incessant strikes and improper

utilisation of port facilities. According to Amit Ghosh, VP (Logistics) of TKM Global Logistics Ltd., a mid-

sized shipping and logistics company in Kolkata, “Incidentally, this is happening at a time when shipping

companies are already struggling to maintain their profit margin due to the declining freight rates and

global financial slowdown.” Mr. Mukherjee, further adds, “It should be kept in mind that the amount of

cargo traffic has declined considerably in the recent years due to silt deposition in the Hoogly River belt.

Now if the port authorities are taking a lack-lustre approach towards operational drawbacks then it

would cost the business of these ports significantly.” Considering the current developments, it has been

predicted that the Haldia dock would witness a decline in cargo traffic to nearly 6 million tonne by end of

the current financial year.

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KoPT cancels 20-year land lease deal with Navy


KOLKATA: The Kolkata Port Trust (KoPT) wants the Naval authorities to return about 50 acres of land

at Haldia Dock which it had leased out some 20 years ago. KoPT contends the land has not been used

so far for the purpose for which it was leased. It wants to create back-up facilities for its proposed

riverfront jetty. When the Defence authorities failed to respond to KoPT‟s pleas, the latter served it a

notice terminating the lease agreement. According to the agreement, six months‟ notice is required for

the lease termination to come into force. At the last meeting of the Board of Trustees of KoPT, the

Naval Office-in-charge, also a member of the Board, took strong exception to KoPT‟s action, it is learnt.

KoPT is, nevertheless, ready to provide an alternative site on the riverfront to the Navy. It has offered 10

acres at Jellingham immediately and the balance of 40 acres at some other place. However, the Navy‟s

response to KoPT‟s offer is understood to be lukewarm. The Navy‟s reluctance to return the Haldia

Dock land has led to uncertainties about one of the two riverfront jetties proposed to be developed at

the Dock.

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Indian ports to face challenging year ahead, says report

The Economic Times – 07 September, 2009

For a majority of Indian ports 2009-10 is going to be yet another challenging year, much like 2008-09.

And if the situation continues the way it is, the cargo volumes anticipated in the XI Plan estimates may

not materialise by 2011-12. These are the findings of ICRA, a leading credit rating agency, in its recent

report on 'Challenges in Private Sector Participation in Port Projects'. "Fiscal 2009-10 will be another

challenging year for domestic ports ..., because of the continuing slowdown being experienced by key

end-user industries, especially the steel sector, although there have been some improvements of late.

Consequently, ports with their cargo mix showing concentration of iron ore, coking coal and coke could

see muted growth (in cargo)," the report said.

"A few private sector ports could nonetheless achieve higher growth on the strength of their superior

infrastructure and gain of market share from Major Ports nearby," it added. Given the uncertainties in

the near term, it noted, missing the 11th plan cargo figures could mean significant overcapacity in case

all the proposed projects come up. More importantly, ICRA believes that the actual capacity addition will

be lower than anticipated because of the likely delays in the awarding of projects under National

Maritime Development Programme (NMDP), in attaining financial closure by private sector players, and

in project execution. "The capacity addition should nevertheless improve service standards for end-

users who now have to cope with near 100% berth occupancy in the Major Ports," it said. Talking about

the port privatization programme, the report said that private participation in the Indian port sector has

been on the increase during the past decade, thanks to the initiatives of central and state governments.

"Notwithstanding the initiatives, private players continue to face several challenges, including a

protracted approval process, stiff bidder selection criteria, and certain issues associated with the Model

Concession Agreement (MCA) and with tariff setting.

Despite the near-term challenges, it expects the outlook to be favourable for cargo in the medium to

long term for domestic ports. The key drivers for growth will be the commissioning of power projects

based on imported coal, expansion of refinery capacity, setting up of steel projects, imports of raw

materials and fertilizers, increase in containerisation, and offshore E&P projects.

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With surplus capacity seen on horizon, shipowners fear dwindling rates


MUMBAI: Several shipowners are reportedly anticipating a shrinkage in freight rates over 12-18 months

with surplus tonnage entering the market, and the dismal trade situation. Despite fears of huge

cancellations, most shipyards went ahead constructing newbuildings because they were already at an

advanced stage and wanted to complete the exercise. "The ships likely to be delivered in 12-18 months,

whether in the dry bulk or wet side, will put further pressure on the freight rates," opined Mr. A. R.

Ramakrishnan, Director, Essar Shipping Ports & Logistics. The governments of China and Korea are

bailing out their shipbuilding industries through financial stimulus packages and banks there are

providing special credit lines for shipbuilders. Hence, there could be even more tonnage in a market that

is already witnessing excess capacity.

The dwindling freight rates have impacted domestic shipping companies which is reflected in their first

quarter earnings. While the Shipping Corporation of India‟s (SCI) net profit fell by 57 per cent to Rs.

119.92 crore, that of Varun Shipping fell by 91.8 per cent to Rs. 1.84 crore. Essar Shipping, however,

reported a net profit of Rs. 29 crore, as against a net loss of Rs. 12 crore in the same quarter of 2008,

although total income fell by 26.2 per cent to Rs. 209.6 crore.

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MPSEZ’s AAT lifts the bar on car loading rate


MUMDRA: Adani Automobile Terminal (AAT) at Mundra Port and Special Economic Zone (MPSEZ) has

achieved a performance high by loading at the rate of 150 cars per hour on the vessel m.v. Hoegh

Tokyo which sailed from the Port on September 5. The vessel loaded a total of 2,089 Nissan Pixo cars.

The Captain and Chief Officer of the vessel praised the stevedoring operations, saying that they were at

par with the best auto terminals globally, according to a release. Capt. Ramnath, General Manager of

AAT, reiterated the commitment of the terminal to serve the automobile industry and provide excellent

service levels to customers.

AAT is the first terminal in South Asia to use a floating pontoon and link span facility to provide round-

the-clock uninterrupted loading operations for Pure Car Carrier (PCC) vessels. The terminal has, since

the commencement of operations in January 2009, handled more than 60,000 Maruti Suzuki and

Nissan cars. The highlight of this period was in August, during which AAT berthed 9 PCC vessels and

handled a volume of 13,379 units. MPSEZ has a long-term agreement with Maruti Suzuki India Ltd to

export cars from Mundra Port. MPSEZ has provided a PDI area near the Port, which can accommodate

8,000 vehicles at any given time, as well as a back-up area inside the Port for parking vehicles. PCC

vessels of NYK Line, "K" Line, Hoegh Autoliners and Nissan Motor Car Carriers regularly call at AAT.

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ABGKCTL chosen for regular coastal box service by Jindal Vector


GANDHIDHAM: The ABG Kandla Container Terminal Ltd (ABGKCTL), operated by ABG Group at

Kandla Port, has once again proved to be a preferred facility for coastal movement, with Jindal

Waterways Ltd. commencing a regular container service. Jindal Waterways, through Jindal Vector, had

launched liner services in February 2008 and has already emerged as a major coastal carrier. The

company provides total logistics solutions with a high-frequency, high reliability service, port-to-port and

door-to-door in container and bulk. The coastal service from Kandla serves domestic cargo movement

between Kandla and Cochin so as to attract cargo from Northern India to South Indian destinations. The

vessel under this service, m.v. Jindal Kamakshi, made her maiden call at ABGKCT on September 4.

Jindal Vector has deployed 3 vessels in this service with the port rotation Kandla, Cochin, Tuticorin,

Kandla. The service frequency to Kandla is once every 5 days. Jindal Vector owns and operates short-

sea shipping container and break-bulk vessels along the coast and the Subcontinent. Plying between

the ports of Gujarat and South India, Jindal Vector operates modern containerships sized right for the

Indian coastline, providing high-frequency and high-reliability container services between the ports of

Kandla, Pipavav, Cochin and Tuticorin. In order to commemorate the maiden call of m.v. Jindal

Kamakshi, a brief function was arranged on board the vessel at the terminal, during which a memento

was presented to the Master of vessel by the chief guest, Mr. M. A. Bhaskarachar, Deputy Chairman of

Kandla Port Trust.

In a brief address, Mr. Bhaskarachar said that Kandla Port was "very happy to receive such new

services and the Port is very well equipped to provide good service to all customers. I also take this

opportunity to wish Jindal, ABGKCTL team and the vessel agent, Seabridge Maritime Agencies, all the

very best." Among the others present on the occasion were, from Jindal Waterways, Capt. Ashwin

Advani, VP-Business Development, Mr. Kiran Nandre, DGM-Business Development; from Seabridge

Maritime Agencies, Mr. Dharamshi Mitesh, General Manager, Mr. Vijay Patel, Operations Manager, Mr.

Manoj Mishra, Senior Executive-Marketing, Mr. V. Prakash Rao, Senior Executive, Operations; and

from ABGKCTL, Mr. S. Senthilkumar, Terminal Manager, Capt. Manish Kumar Mittal, Senior Manager

(Operations), Mr. Anil A. Kumar, Executive (Marketing), Mr. Paras Vyas, Officer (Marketing), Mr. Vijay

Selvan, Planning Superintendent, and Mr. Subramanian, Deputy Manager (Planning). A total of 133

TEUs were handled during the call.

According to the ABGKCTL management, the terminal has been positioned as the most preferred

facility for coastal, Middle East and Karachi destinations. It is confident that by attracting more such

services, the terminal will continue on its steady growth path and exponentially increase its volumes in

the time to come. The management has expressed a deep sense of gratitude to the Jindal Vector team

for extending its wholehearted support to the terminal and has assured it of continued excellent

services.

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Subdued crude prices pull down OSV rates


MUMBAI: With global crude prices ruling low because of the meltdown, the charter rates of the offshore

support vessels (OSVs) have plummetted by 50-60 per cent in the last 6-8 months. Oil exploration is the

first area to be hit by falling prices and demand due to the high costs and risks involved. It is no wonder

then that several oil companies put on hold the riskier explorations projected for the second half of last

year when the price of oil tumbled from an all-time high of $ 140 a barrel in July, to around $ 33 in

December.

They are no longer considering oil exploration as a viable option and this has, in turn, hit the offshore

industry. "Due to the market conditions, companies are not going in for oil exploration, due to which the

offshore rates have gone down," commented an analyst. "The offshore sector has different segments

like rigs, OSVs and others. However, on a wider term, the rates in the offshore segment have gone

down by at least 50-60 per cent in the last 6-8 months," he added. Since the offshore segment is

directly related to the oil and gas sector, chances of it bouncing back is the bleakest. Some industry

experts, nevertheless, believe that the downturn is temporary. "The offshore segment has come down,

but it is not as badly hit like the other segments like dry bulk tankers," commented one player.

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VPT cuts wharfage charges by 10-20 pc


VISAKHAPATNAM: The Visakhapatnam Port Trust (VPT) has pruned its wharfage charges by 10-20

per cent to attract cargo, which has of late started shifting to the nearby Gangavaram port. This charge

is paid for using a wharf for handling goods. "After the commencement of Gangavaram port, bulk

cargoes like coking coal, thermal coal, iron ore have started shifting from Vizag Port. If the situation

continues, the Port will lose more cargo volumes in the coming days," Mr. Krishna Kumar, President of

the Visakhapatnam Stevedores‟ Association, feared.

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Three Cheers for JNPT!

...bags coveted Indira Gandhi Rajbhasha Puraskar award for 3rd year in a row


NAVI MUMBAI: The Jawaharlal Nehru Port Trust (JNPT), the premier container handling Port (which is

also ranked 25th among the Top 30 World Container Ports), has bagged the coveted „Indira Gandhi

Rajbhasha Puraskar‟ (2nd prize) for 2007-08. This award was received, on behalf of JNPT, by its

Chairman, Mr. S. Shahzad Hussain, IAS, at the hands of the President, Ms. Pratibha Devisingh Patil, at

a glittering function organised by the Department of Official Language, Ministry of Home Affairs, at

Vigyan Bhavan in New Delhi on September 14, as part of the „Hindi Day‟ celebrations.

The Union Home Minister, Mr. P. Chidambaram, presided over the function. Pertinently, the Port was

last year awarded the first prize for the same reason for 2006-07 and the second prize for 2005-06. The

Port has also been awarded five times by the Union Ministry of Shipping and thrice by the Town Official

Language Implementation Committee (Undertakings), Mumbai, for its excellent implementation of the

official language. Apart from serving the international trade and commerce of the country by handling

more than 60 per cent of the containerised cargo, the Port has also been doing excellent work in

fulfilling its Corporate Social Responsibility (CSR), protecting and upgrading the Port‟s environment and

implementing the nation‟s Official Language Policy.

Top

Indian shippers seeking govt. protection in territorial waters


Absence of any stringent rule by the Shipping Ministry is allowing foreign shippers to enter into Indian

coasts, thereby posing stiff competition to their Indian counterparts. Chiefs of a number of Indian

shipping companies recently met the Shipping Secretary APVN Sarma, requesting the Government of

India (GoI) to provide them protection in the country‟s territorial waters. The chiefs urged the

government to enforce stringent rules that would ward off competition posed by foreign players in Indian

waters. According to the chiefs, countries such as Indonesia and China have rules that allow only their

respective domestic firms to move coastal cargo on their territorial waters. These rules have been

particularly framed to overcome the impact of the global demand slump, which has severely hit the

shipping players across the globe.

“Shipping firms in India have also suffered badly due to the turmoil in the financial markets. However,

the Indian Shipping Ministry have not taken any such measures that were taken by Indonesia and

China,” said P Jain, Proprietor of Kushal Corporation, a mid-sized shipping services firm in Ahmedabad.

Although the country‟s coastal trade is reserved for India-registered ships, foreign ships can move cargo

along the coast when Indian ships are not present, after taking permission from the Directorate General

of Shipping. However, of late it is being increasingly noticed that global ship owners are looking at

potential regions on Indian coasts to stay afloat, which is hurting the business of domestic fleet owners.

With business of Indian shippers coming under threat from foreign competitors, small and mid-sized

logistics service providers (LSPs) are also concerned about their prospects. “If foreign shipping firms

are allowed to trade on Indian coasts, the number of consignments domestic shippers procure may

gradually reduce. This will adversely impact our business, as we would be receiving fewer orders in

such an event,” said M. Amit, Proprietor of Delight Agencies, a small-sized LSP in Indore. Shipping and

logistics companies are hoping that the Shipping Ministry will take some step in their favour in this

regard in the coming days.

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New port projects remain at Environment Ministry’s mercy


NEW DELHI: The Environment Ministry has virtually blocked the Shipping Ministry‟s plan to modernise

and expand 20 ports across the country by imposing a temporary freeze on all of them. The Shipping

Minister, Mr. G. K.Vasan, had promised to award six projects under the National Maritime Development

Programme (NMDP) within 100 days of taking charge. With investments estimated at Rs 3,320 crore,

the projects were to be taken up in 2009-10. But before work orders for any of these could be awarded,

the Environment Ministry imposed its three-month moratorium on August 21. The Environment

Ministry‟s move follows the recommendation of a committee headed by Dr. M.S. Swaminathan.

The Shipping Secretary, Mr. A.P.V.N. Sarma, held a high-level meeting and has decided to take up the

matter with the Environment Ministry. The Environment Ministry has taken the stand that liberal

approvals of port capacity expansions have damaged the coastline and a cautious approach is needed

for granting approvals. It had conducted a satellite image survey of the entire country and is now

analysing the images. While the Shipping Ministry has agreed to apprise the Environment Ministry of all

expansion projects in future, it wants the moratorium to be lifted for projects already at an advanced

stage of clearance. The government is planning to increase the capacity of all ports by 1.5 billion

tonnes.

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Implementation of GST may trigger more outsourcing to 3PLs

Shippingbiz.com360.com – 24 September, 2009

Even though more than 30% of logistics services in foreign nations are outsourced to third-party

logistics (3PL) providers, the picture is quite different in India. At present, less than 10% of companies

have outsourced their logistics services to 3PL providers. However, the scenario is likely to change after

the implementation of the goods and services tax (GST) in the country from April 2010. The proposed

tax is expected to have a positive impact on the manufacturing and logistics sectors, particularly in the

execution of activities such as manufacturing, distribution and warehousing. According to industry

experts, if a uniform tax structure is drafted and implemented for all states, there will not only be parity

in the functioning of manufacturing and logistics companies, but also help manufacturers base their

logistics decisions on operational efficiency instead of tax optimisation.

“Once manufacturers start taking decisions on the basis of their operations, they will be more inclined to

outsource their logistics services to 3PL providers to ensure that they provide quality service. In this way

demand for 3PL service will increase in the coming days,” said VS Murthy, Proprietor of Mercury

Industrial and Investment Consultants, a mid-sized shipping services consultancy firm in Hyderabad. If

3PL providers procure more orders in the near future, their business will get a huge boost. “Small

players engaged in providing 3PL services will be greatly benefited if more and more companies

outsource their logistics services. This will not only ensure them of more business, but also make

logistics operations hassle-free for manufacturing companies,” said DS Sen, DGM at Esskay Shipping,

Kolkata branch, a mid-sized shipping services company based in Visakhapatnam. Not surprisingly,

manufacturers and logistics companies are happy to outsource their tasks to 3PL providers, which is

likely to streamline their work process. Although 3PLs generally focus on a large network of sub-scale

warehouses instead of fewer, larger and mechanised warehouses, the implementation of GST will no

longer limit their boundaries.

Top

Sethusamudram Ship Canal project faces dredging hurdle


With DCI pulling out dredgers from the controversial Sethusamudram Ship Canal Project, several mid-

sized vessel and ship operators are worried that their hope of reducing cost of operation for ferrying

cargoes between eastern and western coasts in the country will not materialise. A decision by the state-

run Dredging Corporation of India Ltd (DCI) has put a major hurdle before the controversial

Sethusamudram Ship Canal Project. Following DCI‟s move to pull out the last dredger used for digging

the channel, the project has come to an unprecedented halt.

According to the DCI authority, they had employed a specialised ship to deepen the channels of ports

and harbours under a 4-year contract with the Sethusamudram Corporation Ltd. The dateline of the

contract came to an end on July 27, following which, the DCI has pulled out its dredger from the project.

Needles to say, with the absence of the DCI dredger the project would be delayed. Moreover, it would

also hamper the work that has already been done. “The project had to be completed within a stipulated

timeframe, which did not happen in this case, thereby leading to a delay in the process further. Now

when the dredging work has come to a halt, silt deposition will take place rapidly even in the areas

where dredging was done earlier, thereby marring the whole process,” comments, Ram Suresh, Senior

Manager of Eagle Maritime Private Limited, a mid-sized shipping firm in Chennai.

The decision has not only left the Sethusamudram Corporation frowning, but it has also dashed the

hope of several mid-sized vessel and ship operators in the region. The purpose of the canal was to

shorten the shipping route between the country‟s eastern and western coasts. In this context, Marcia

Ellens, Manager of Viking Shipping Chennai Private Limited, a mid-sized shipping company in Chennai,

Tamil Nadu, rues, “With the completion of this project the operation cost of small and mid-sized shipping

companies were expected to come down. If the maritime distance between India‟s eastern and western

coasts was reduced it would have significantly benefited the shipping companies financially, especially

in this difficult time of an economic slowdown.” According to the project plan, boring of a new shipping

channel was to be done, which would connect the Gulf of Mannar and Bay of Bengal through the Palk

Straits and Palk Bay.

Top

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