Week ending October 06, 2002

News on Shipping

The Shipping Ministry concern about falling national tonnage The Union Shipping Ministry is reportedly expressed concern over decline in national tonnage, coupled with several shipping companies recently deciding to move out of shipping business, while some have been flagging out their ships to other low tax countries. At a recent presentation made before the ministry, by industry representatives, it was also pointed that uncertainty and delay in the privatization of Shipping Corporation of India (SCI) has also affected the expansion plans of SCI besides also of other companies, awaiting the outcome of disinvestments process. It was brought to the notice of the government that the national tonnage could soon fall from seven million tonnes GRT to 6.39 million tonnes GRT, if appropriate measures are not introduced. Recently, India Cements had decided to exit the shipping business to focus on its core business, while Sanmar Shipping is also in the process of selling some of its bulk carriers. Some of the shipping lines like Tolani Shipping Co Ltd. has gone ahead and decided to flag out its 56,000 dead weight tonnage (DWT) bulk carrier built at Mitsui Yard in Japan.

Government revises put and call option clauses in SCI privatization The government has reportedly revised the put and call option at 24 months and 12 months respectively for divesting its residual stake of 26 per cent, after the strategic sale of 51 per cent stake in Shipping Corporation of India (SCI). The initial draft of the shareholders agreement had incorporated a put and call options at 12 and 36 months respectively. The prospective bidders had sought a much shorter put and call options in order to quickly integrate the SCI fully with the group company of the acquirer by buying out the balance 26 per cent stake of the government. The retention of the 26 per cent stake for a longer period as a fallout of the decision would now enable the government to have veto powers on special resolutions, which could inconvenience the new private owner of SCI from taking certain crucial decisions affecting the future of the company.

MoS wants to set up country's first ever maritime university The Ministry of Shipping (MoS) has mooted the proposal of setting up a maritime university in the country to be called "Indian Institute of Maritime Studies (IIMS), which will bring together four of the existing government-managed maritime institutes - Lalbahadur Shastri Nautical College, two marine engineering research institutes and T.S.Chanakya. Once the university is formed the government proposes to bring under its fold about 120 private sector institutions engaged in maritime education and training and bring about standardization and uniformity in over 70 odd courses being offered at present. The government is also looking at the possibility of entering into some form of foreign affiliation, preferably with the International Maritime Organization (IMO) for the degrees to be offered by the Indian Maritime University (IMU).

Three-day International Maritime Conference and Exhibition at Mumbai A three-day International Maritime Conference (INMARCO) 2002 is being organized at Mumbai starting from 21 November 2002. The conference, aims to be a platform to deliberate on all maritime sector related issues such as containers, ship design and repairs, ship maintenance and management, cargo handling, regulations and norms pertaining to this sector and information technology solutions for the shipping industry. The event will also feature an industry exhibition, which will showcase the latest products and services for the maritime sector. INMARCO, which is held every four years, is a regular calendar event and is expected to be draw international participation as well.

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News on Shipyards

CSL posts Rs.16.4 crore in profits Cochin Shipyard Ltd. (CSL) has achieved a net profit of Rs. 16.4 crore during the fiscal ended March 31 2002. Following this year's performance, the total accumulated loss of Rs. 160 crore during 1996-97 has been wiped off. Last financial year, the CSL had a turnover of Rs. 490 crore. The profit before tax was Rs. 27.59 crore despite the tough times the shipyard had. The CSL earned Rs. 92 crore from ship repairs alone. CSL is currently handling an international order of $ 8.3 million from Abu Dhabhi for building an ocean-going cargo launch vessel.

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News on Ports

20 per cent productivity pay for port workers The Shipping Ministry has decided to pay a uniform 20 per cent productivity linked reward (PLR) to the port workers at the 12 major ports, as per the 1996 agreement in this regard. The five worker's federations and the port managements together signed an agreement to this effect. Following the conciliatory meeting, the shipping ministry has submitted a note to the Finance Ministry on continuing with the existing scheme for payment of PLR for one more year. The agreement has averted the proposed strike threat from the federations against its move to modify the PLR scheme and make it port-specific. The Shipping Ministry had earlier adopted the stand that profit-making ports should pay more PLR than their loss-making counter-parts. However, the worker's federations opposed this move and argued that since salaries and perks were uniform at all the ports, the PLR should not be made port-specific and should be uniform as well.

BPCL-IOC liquid jetty opened at JNPT Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation (IOC), which have jointly put up a liquid jetty at JNPT has started operations. The jetty was formally thrown open with its first-time handling of third party cargoes of Reliance. The jetty is expected to bag regular liquid handling business from Reliance, which is moving around one lakh tonnes of cargo per month for its Patalaganga plant in Maharashtra, through JN port. Besides the Reliance cargo, the new jetty will be handling 50,000 tonnes of ONGC cargo per month. The BPCL-IOC jetty was built at a cost of Rs 150 crore, originally as a captive jetty for handling IOC and BPCL products. The jetty has the capacity to handle eight million tonnes per annum.

Cochin port workers to observe action week against FoC vessels The The Cochin Port Staff Association is organizing ITF (International Transport Workers Federation) FoC Action Week 2002 from October 7 to 11 at the port, as part of the action against "flags of convenience" (FoC) and substandard shipping. The proposed action forms part of the ongoing campaign to highlight the dangers posed by FoC vessels to the crew that sail on them and the oceans they sail through. Seaman sailing on these vessels have to endure through very low wages, poor living conditions, inadequate medical attention and also lack of safety training. The objective of the campaign is to abolish the FoC system and return the FoC ships to the flag of the country of ownership.

Container Operators cut ICD box cost at MBPT Container transporters operating from Mumbai Port have reportedly slashed the transportation cost of containers being handled for inland container depot (ICD) from Rs 2,600 to Rs 1,500 per TEU with effect from October 1st, 2002. The move is expected to particularly benefit ships, which were forced to make dual calls, at different terminals of Mumbai port specifically offload ICD import boxes or load ICD export boxes. The decision to cut back on the transportation costs is also expected to encourage greater movement of ICD originating and destined containers for all destinations.

Record dry bulk handling in August 2002 at Haldia With an increase in iron ore and coking coal traffic, Haldia Dock Complex (HDC) of the Kolkata Port Trust (KPT) has set a record of handling 1.16 million tonnes of rail-borne cargo during August 2002. This was higher than the volume that handled in the same month of the previous

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News on Dredging

DCI tender for maintenance dredging at JNP The Dredging Corporation of India (DCI) has invited tenders from experienced dredging contractors for undertaking maintenance dredging at lagoon and liquid cargo berth areas of Jawaharlal Nehru Port for the year 2002-03. The estimated quantity to be dredged under the contract is 80,000 cubic meters. The last date for submission of the tender is 25.10.2002.

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News on Inland Waterways

New cargo-cum-passenger terminal launched at Guwahati A cargo-cum-passenger terminal IS being developed by Inland Waterways Authority of India (IWAI) has been started at Pandu, Guwahati on the banks of river Brahmaputra.The project investment in setting up this terminal is Rs 30 crore.

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News on Offshore

Gujarat government to invite private bids for gas distribution infrastructure The government of Gujarat has decided to invite private sector participation in the in the development of gas distribution infrastructure. Private companies interested in setting up gas pipelines in the state have been asked to approach Gujarat State Petroleum Corporation Limited (GSPCL), which has been specially mandated to act as the nodal agency for all matters related to gas pipelines. As per the State government guidelines to private sector investors, the interested parties will have to furnish a security deposit of Rs. 1 crore. The majority of the proposed gas pipeline network is expected to be ready by 2004.

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News on Logistics

Cement industry urges government to review freight rates The domestic cement industry has sought a review of the existing freight structure adopted by railways for transportation of cement across the country. Over the last three years, the quantity of cement transported by the Railways has been declining even when there has been increase in production levels of the domestic cement industry. The share of the cement transportation undertaken by the railways has been consistently coming down over the past few years. The railways transported 38.7 million tonnes of cement during 1999-2000 and accounted for 41.2 per cent of the total cement dispatched in that year. It transported 36.8 mt (39.4 per cent of the total cement dispatched) and 36.2 mt (35.4 per cent of the total cement dispatched) during fiscal 2000-01 and 2001-02 respectively.