Week ending May 07, 2002

News on Ports

KPT plans to appont JICA for advisory role The Kolkata Port Trust (KoPT) plans to engage Japan International Cooperation Agency to undertake strategic study on the development of its facilities and infrastructure, through private sector participation. The study will examine the scope for converting Kolkata port into a hub for inland and coastal shipping, turning the five dry docks into independent ship repair facilities and developing port & lighterage facility at Saugor and Sandhead. The report will also list the facilities that could be developed for making the KoPT into a hub for inland and coastal shipping and integrating them with the existing inland water, road and rail transport. This will include creation of bunkering for inland and coastal vessels. The study will also assess the role of private sector participation and funding alternatives. These would include raising of funds through sale and lease of some existing infrastructure and preparation of a detailed implementation schedule with financial and economic analysis. JICA would also survey ship-building and repair facilities now available in the Kolkata-Haldia region and work out some projections on the number of vessels likely to be drydocked over the next ten years.

SCI to pay 35 per cent interim dividend Shipping Corporation of India (SCI) will pay an interim dividend of 35 per cent about Rs.100 crore to the Union Government before the company is privatized by end of June 2002. The board of directors, which met recently took the decision at the behest of the Central government. The board meeting also decided to refer a proposal to invest a further $ 33 million in Greenfield Shipping Company to an internal committee before taking a final decision in this regard. The board also accepted the offer submitted by Oriental Bank of Commerce (OBC) to provide Rs.200 crore to SCI for part-funding the acquisition of two Suezmax tankers of 1,40,000 dwt from Daewoo Shipbuilding and Marine Engineering Company, South Korea. The SCI board also rejected a proposal submitted by the management to buy a second-hand 3,00,000 dwt very large crude carrier (VLCC) through newly created domestic subsidiary – Irano Hind Shipping Company, a 49.51 joint venture between SCI and Islamic Republic of Iran.

SCI to launch INDFEX-2 service to North China Shipping Corporation of India (SCI) along with three other consortium lines is launching a service named INDFEX-2 from Chennai port from June 16, which would call on four ports in China, including Dalian, Qingdao, Xingang and Yantai, besides covering other ports en route like Kelang, Pasir Gudang in Malaysia and Singapore and Hong Kong. The new service is being launched with a view to improve its share of the China trade. The SCI is also reported to be shifting its office from Japan to China. The consortium, which will operate this new service includes K-Line of Japan, Dangnan of Korea and PIL of Singapore. The current service to Shanghai is operated by the same consortium.

Bank of Oman to replace ANZ for financing LNG venture Bank of Oman is likely to raplace the consortium led by Greenfield Shipping Company, a joint venture between Oman government, Mitsui OSK Lines and the Shipping Corporation of India (SCI) formed for owning and operating a 137,000 cubic metre LNG tanker for carrying gas from Oman to Dabhol. The development follows the decision of the ANZ Investment Bank not to take further risk by continuing extend its lending to the the consortium following the Dabhol crisis. The three promoters of thje consortium are reportedly now planning to pre-pay ANZ loan of $110 million along with interest and inducting Bank of Oman as the new lender.

IPBC conference plans hike in freight rates The member lines of India/Pakistan/Bangladesh/Ceylon (IPBC) conference serving the trade route to Europe have proposed to hike the freight rates effective from June 1 to the tune of $150 per TEU and $300 per FEU. The proposed hike is the second of its kind to be planned this year. The earlier hike announced under the Rate Restoration Initiative (RRI) in March had hiked the freight rates by $ 300 per TEU ($ 600 per FEU). Some of the shipping lines are yet to implement the first hike announced under RRI, even as the second hike is being mooted. At present the prevailing rate is around $ 700-750 per TEU ($ 1400-1500 per FEU) against $ 800-850 per TEU and $ 1600-1700 per FEU in October 2000. India/Pakistan/Bangladesh/Ceylon (IBPC) conference has also revised upwards the bunker surcharge in view of the rise in the cost of bunkering at various international ports. The new rates at $ 50 per TEU and $ 100 per FEU will be applicable from May 1 2001.

GE Shipping net profits up by 17 per cent G E Shipping has announced its unaudited (provisional) annual results for 2001-02 and has recorded a revenue of Rs.11,963.5 million, representing growth of 3.58 per cent and an increase of 17 per cent in net profits (after provision for deferred tax ) aggregating to Rs.2,075.1 million for the year ended 31st March 2002. For the fourth quarter ended March 31, the revenues stood at Rs.2,584.5 mn. and net profit (after provision for deferred tax) of Rs.307.8 mn.For the fourth quarter of 2001-02, the shipping division contributed 75.68 per cent to revenues and 82.03 per cent to operating profits. Despite weak economic trends and freight markets, the shipping division has maintained its profitability as many of its vessels were locked in time charters.