Week ending January 21, 2002

News on Ports

Vallarpadam transshipment terminal project draws global majors The Union Shipping Ministry is once again set to re-tender the Vallarpadam project (pending final Cabinet approval). Several of the global majors in the port development business, including CSX Terminals, USA, Westport of Malaysia, Hutchinson Port Holdings of Hong Kong and Maersk Sealand of Denmark's A P Moeller Group and the Dubai Port Authority have reportedly expressed their interest to bid for the project. The second round of bidding is taken up, after the first round of bidding for the project only elicited single bid from P&O Ports. The P&O Port's bid will stand technically cancelled once the re-tendering process is initiated. The Vallarpadam transshipment terminal project will have the potential for handling large container transshipment cargo, with 70 per cent of India's transshipment cargo going through the Colombo, Singapore and Gulf ports. The bidder for the Rs. 2,000 crore project, to be taken up on build-own-transfer (BOT) basis, according to the Shipping ministry is likely to be finalized in the next three months.

Pipavav port signs traffic-delivery pact with Railways Gujarat Pipavav Port Limited (GPPL) and Indian Railways have signed a traffic-delivery pact, based on fixed performance guarantees. As per the pact, the Indian Railways have undertaken to guarantee a firm schedule for cargo delivery to the port, while GPPL has assured a minimum annual traffic of one million tonnes in the first year. The traffic is expected to further go up to 3 million tonnes in the third year, which would include cement, coal, food grains and petroleum products besides containers. Under the mutually binding pact, both the Railways and GPPL will be liable to pay heavy penalties to the other, if either of them fails to keep up to the terms of the agreement. Both the parties to the pact have created a special purpose vehicle (SPV) with equal stakes for the purpose. The Rs.300 crore project scheduled to be completed by December 2002 involves gauge conversion on Surendra Nagar-Rajula City-Mahuva section and construction of a new line between Rajula City and Pipavav.

Pipavav Port to shelve plans for crude oil jetties Gujarat Pipavav Port Limited (GPPL) has decided to drop its plans for setting up jetties for crude oil and instead focus on containers and other cargo. GPPL had earlier floated tenders for the construction of two jetties and had planned to complete the construction in 18 months. The GPPL board of directors at its recent meeting has taken the decision to this effect.

Dholera Port serves notice on GPCB JK Industries, promoters of Dholera port project in Gujarat, have filed legal notices against the Gujarat Pollution Control Board (GPCB) for "criminal negligence" in delaying the project. The Rs. 1,400 crore mega port project is to come up in the Bhal region of Central Gujarat. The project is one of the five green-field projects developed by private promoters along the Gujarat coast. The decision to take up the matter with the court comes within days of obtaining long-delayed no objection certificate (NoC) for the project. Dholera Port Limited (DPL) has contended that while it had submitted an application for an NOC from the GPCB in January 2001, it finally received the NOC only on January 3, 2002 and has sought Rs 140-crore compensation in damages.

News on Shippings

MOS to expedite DPR for Sethusamudram canal The Union Shipping Ministry is seriously considering bringing down the time limit for submission of detailed project report (DPR) for the proposed Sethusamudram ship canal project in Tamil Nadu, from two years to six months in order to expedite the project. The Tuticorin Port Trust (TPT), the nodal agency appointed by the government for the project, has already received a few bids for taking up the project. The government had floated tenders to select a consultant for conducting a DPR in two parts. The first part was to focus on the techno-economic viability of the project, which links the Palk Bay with the Gulf of Mannar on the east coast through a canal that will run through Rameshwaram island, while the second part will look into detailed environmental impact assessment of creating a canal. The Sethusamudram project involves widening and deepening of the Pamban channel to facilitate the movement of coastal ships up to size of 3,000 tonnes.

News on Shipyards

Submarine repair yards mooted at Vizag and Cochin The Union Shipping Ministry (MoS) is exploring the prospects for making the public sector shipyards at Vishakapatanam and Cochin into submarine repair yards. This was stated by the Union Minister for Shipping, Mr. Vedprakash P Goyal, while speaking at a round table meeting on "Strategies for Development of Port Infrastructure to Boost International Trade" organized by the Southern India Chamber of Commerce and Industry in Chennai. The minister said that while the proposal was at a preliminary stage, MoS was seriously considering the proposal. He said that MoS was looking at the proposal keeping in view lack of orders for new ships and the available expertise of the yards in submarine repairs.

News on Logistics

Konsortium Logistik plans to enter SCM sector in India The Malaysia-based Konsortium Logistik Berhad Group of Companies, which currently has equity stake of 26 per cent in Kakinada Seaports Ltd., and another 40 per cent stake in New Delhi-based Associate Container Terminals Ltd., is believed to be further scouting for opportunities in the supply chain management (SCM) sector. The company has identified large projects in the automotive, oil/gas and retail distribution as likely areas of investment.