Week ending August 23, 2002

News on Shipping

Private shipping companies oppose SCI move on "special overtime payment" The wage negotiations under the National Maritime Board (NMB) have come to a standstill with private shipping companies opposing Shipping Corporation of India's appeal to merge its special overtime payment agreement with the new NMB wage pact. SCI is not interested to continue a parallel wage pact, when it is already covered by the NMB wage agreement. Meanwhile, under the NMB agreement, the unions have been seeking a substantial hike in the existing pay scale, which the private ship owners are not likely to agree.

DGPS recommended for inland water vessels The Ministry of Shipping has recommended Differential Global Positioning System, DGPS to monitor the inland water vessels. . The DGPS network will cost around 40.0 to 45.0 lakh for each vessel, which is higher than other navigational systems. DGPS was chosen as it has a high level of accuracy with almost negligible margin of error, which is required by inland water vessels plying through narrow creeks and channels. It is felt that an early introduction of the navigation system would result in faster movement of the project cargoes.

SCI's successful bidder allowed to delist company The Ministry of Disinvestments has allowed the successful bidder of SCI to delist the company from the stock exchange, only if all the shareholders tender their shares in the open market. The SEBI has ruled that the "open offer" has to be made even if the company is delisted after the bidding process. In case the company is delisted, the government's stake of 26.0% would be protected through various clauses in the shareholders agreement.

Varun Shipping to acquire a new vessel Varun Shipping Company Ltd. is planning to acquire a new vessel as part of its fleet expansion and make it operational by the end of FY2002. Since the price of second hand ships is weakening in the international market, the company is carefully examining the various proposals for acquisition of ships but has not finalized any acquisition.

New sea link on the east coast HRC Shipping Ltd. has received license from Director General of Shipping to operate coastal service on the east coast. The new coastal service would be cost effective and a speedy alternative for shippers to send goods to the North- East from Chennai and vice-versa. By purchasing slots from the Shipping Corporation of India HRC is soon to extend its services to Tutucorin also.

OOCL to double its port calls Orient Overseas Container Line (OOCL), proposes to add a second loop to its Kanto/Kansai Taiwan South China Express (KTX) thereby increasing many of its port calls in the region to twice a week. With KTX2, OOCL expects better outbound and inbound transit times.

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News on Shipyard

Workers plan strike over CSL privatization The Shipyard protection Committee of the CPI(M) held a road blockade before the Cochin Shipyard Ltd. (CSL) to protest against the privatization of the yard. None of the other trade unions at CSL have however, backed the strike. The strike move was opposing the Geethakrishnan Committee report favoring the privatization of the PSUs under the Shipping Industry. The CSL currently has 2,222 permanent workers and 1,000 contract workers at its yard.

Goodwill delivers passenger-cum-cargo vessel Goodwill Engineering Works, Pondicherry, the engineering division of the Chennai-based South Indian Corporation (Agencies) Ltd. (Sical) has delivered the Rs 7.0 crore, passenger-cum-cargo vessel, "Katchal", to the Andaman and Nicobar Administration. The vessel will be used to transfer people and materials between the A&N islands. Goodwill Engineering has also bagged an order to build two more ships (similar to Katchal) from the A&N Administration.

Keppel Corp acquires Dutch shipyard Keppel Corporation has bought the Dutch shipyard for US $18 million, excluding the yard's land and its dry docks. With about 15 yards under them, the company has a wide network of offshore repair and conversion yards in various parts of the world.

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News on Ports

NMPT to provide cruise facility In order to develop Mangalore as a cruise destination like Goa, New Mangalore Port Trust (NMPT) plans to develop a cruise handling facility. The port plans to carry out this work by offering necessary facilities to private operators on a build-operate-transfer basis (BOT). A cruise lounge for passengers has already been developed and its stakeholders have been formed. About 14 cruise liners were handled by the port during FY 2001-02.

Paradip plans construction of a new berth The Paradip port proposes to set up a new berth with a deeper draft to augument its ore handling capacity. The Indian Ports Association (IPA) is currently examining the feasibility of having a deep draft berth at the port. This proposal of a new berth was made due to a significant increase in the port's iron ore handling in the last few years. By creating a deep-draft berth the port intends to attract larger vessels with full load. The current iron ore berth at the port is thirty years old. It has a lesser draft with outdated equipment and hence not able to provide services efficiently. As the cost of construction of the proposed berth runs into hundreds of crores of rupees, the port authorities are also reportedly looking at the possibility of private sector participation.

P&O to buy 100 per cent stake in NSICT The P&O ports is to make Nhava Sheva International Container Terminal (NSICT) a fully owned subsidiary by acquiring the remaining 5%from the MB Eduljee Cassinath Group. The NSICT had an initial equity capital of Rs 200 crore. Later, the MB Eduljee Cassinath Group bought 5% stake from DBC, while the remaining equity was taken over by P&O Ports. Within three years of operations, the private terminal has achieved a cumulative cargo throughput of 2m. As per the contract JNPT and NSICT will manage the terminal for 30 years before transferring it back to P&O ports.

Significant rise in cargo growth rate of Indian ports The Indian Port sector has registered a 10.2% growth in the total throughput for the first 4 months of the current fiscal as compared to the previous year. Out of the 12 major ports in India, only Chennai port has recorded a negative trend. The downtrend was mainly due to the loss of traffic with the upcoming of a new port at Ennore. Vizag port has recorded the highest throughput followed by Kandla and Chennai and the biggest increase in the throughput was from container traffic. According to the IPA report almost all the cargo except fertilizer had registered an increase in the volume handled for the first four months of FY 2002-03.

GAPL to offer berthing facility for Capesize vessels The Gujarat Adani Port Ltd. (GAPL) at Mundra is planning to offer the first berthing facility in the country for capsize vessels. So far, handling of Capesize vessels was done at the anchorage point where the unloading is done offstream onto smaller vessels. This resulted in double handling of cargo causing reduction in turnaround time, wastage of cargo and environmental pollution. The new berthing facility will yield freight savings of about US $2 per tonne on account of quicker ship turnaround time. The Adani Exports Ltd. (AEL) aims at tapping the Capesize vessel route to increase its market share by consolidating the requirements of major users of imported coal.

Malaysia's PTP to increase in its box handling capacity Malaysia's Port of Tanjung Pelepas, (PTP) in Johor is planning to rebuild its box handling capacity to 10.0 million TEUs in three years. This would make PTP, currently handling 700,000 TEUs the largest port in Malaysia. Meanwhile, the Singapore's container terminal operator, PSA Corporation has received a severe jolt with Maersk-Sealand and Evergreen sailing off to PTP. Trade sources say that PTP is 30.0% cheaper than the Singapore port. Port of Singapore (PSA), which has meanwhile lost its business to PTP has declared a 50.0% discount on handling charges for all empty containers handled at Singapore, along with a 10.0% discount on all bills at PSA's cargo terminals in Singapore. With the overseas volumes growing at over 30.0% per year, PSA is also looking for new investments in China and India.

Significant rise in Kandla's box traffic There has been a phenomenal growth of 36.0% growth in the container traffic at the Kandla port during the first four months of the current year. With this growth rate the port is expected to handle more than 1.5 lakh TEUs by the end of this year. A constructive approach adopted by the port along with its low cost operations and faster turnaround of container vessels has resulted in such a high growth. To meet the growing demand, KPT plans to create additional infrastructural facilities for an exclusive container terminal with private sector participation.

BHEL to provide VTMS to New Mangalore Port Bharat Heavy Electricals Ltd. (BHEL) has commissioned its Vessel Traffic Management System (VTMS) at the New Mangalore Port. The VTMS is designed to monitor safety of navigation and traffic at the port entrance and intersection of traffic speed zones. The system mainly comprises of radar equipment, tracking system, automated identification system (AIS) and fire fighting equipment.

Shipping Minister calls for cost reduction in port sector The Union Minister for Shipping, Mr. Vedprakash Goyal, has stressed the need for cost reduction at the ports to facilitate the importers and exporters. He has also emphasized the need to promote and develop hub centers so that modern shipping lines can call directly at Indian ports. He also highlighted the importance of pending projects like the Sethusamudram project, which if completed would reduce the sailing time by about 36 hrs.

PLL joins with Adani to develop cargo port facility The public sector Petronet LNG Limited has selected the Adani group as its partner to develop the a 4.0 mt per annum capacity general cargo facility. As per the conditions agreed by both the partners, Adani group, which holds 74.0% of the total equity, would set up a special purpose vehicle (SPV) for the project. The first phase of the project involves Rs. 300.00 crore to set up a 4.0 mt per annum port capacity with a solid berth and mechanized handling equipment. According to the sources this new port would be beneficial for power projects and de-oiled cake exports of Madhya Pradesh. The new facility is expecting around 3.0-4.0 lakhs of cargo per annum.

Sea Services to recommence feeder service on Kolkata-Haldia-Colombo sector SEA services (Pvt) Ltd. is scheduled to start a new feeder service on the Kolkata-Haldia-Columbo sector. Colombo, due to its strategic location became the hub port in the Indian subcontinent. A.S.Shipping Agencies Pvt. Ltd looks after Sea Services' interests in Kolkata and Haldia.

Shipping lines to withdraw war surcharge on Indian ports A group of shipping lines have reduced the additional premiums for vessels calling at the ports of Mumbai, Nhava Sheva, Kandla and Pipavav by lifting the extra war risk surcharge from August 21. However the major feeder operators like Maersk Sealand, P&O Nedlloyd, Mitsui OSK Line, Delmas Midas, Gold Star Line and Ignazio Messina continue to levy a surcharge of US $45.0 per TEU from these ports.

Last date for Hooghly's river regulatory project's tender extended On the request of some of the firms interested in the Hooghly river project the Kolkata Port Trust (KoPT) has extended the last date for the submission of tender papers till August 28. This is the fifth time that KoPT had floated global tenders for the river regulatory project in the Hooghly estuary. The price bids for the project would be considered after shortlisting the firms competing for the project.

Maersk and Evergreen interested in Xiamen terminals Both Maersk and Evergreen are in talks with the Xiamen authorities in order to buy stakes in the terminals being developed in the. Xiamen port currently has three under-construction berths and another two berths available to the foreign investors.

Rise in transhipment at Amsterdam ports The ports of Amsterdam have registered a three percent increase in the transhipment of goods this year as compared to the last year. This was mainly due to the increase at Amsterdam and Ijmuiden ports, which showed an increase of 2.2 percent and 6.5% respectively.

Le Havre port sets a record in container handling The port of Le Havre broke its monthly record for container traffic by handling over 155,000 TEUs in July, which is about 22% increase since the beginning of 2002. The port officials attribute these results mainly to the improved productivity of stevedoring operations and a dramatic increase in the transshipments in the first half of 2002.

Rise in box volumes at the port of Houston The port of Houston on the US East Coast has registered an 8.0% increase in its total container volumes in the first half of this year. Overall container shipping also grew by about 7.6% over the same period of 2001.

Singapore dedicate 20 more berths to enhance competitiveness To enhance its competitiveness, the Singapore government has decided to set aside 20 more berths at Pasir Panjang for other port operators and shipping lines to run. The government is very keen in maintaining its position as a premier transhipment hub of the region and is ready to do what ever is necessary to maintain that position.