Week ending January 14, 2003

News on Shipping

Ministry of Commerce proposes merchant navy The Union Ministry of Commerce has come out with a proposal to set up a `second registry of ships' in one of the newly set up special economic zones (SEZs). The details of the proposed second registry are not yet immediately available but the Shipping Ministry is reportedly examining the proposal at the request of the Commerce Ministry. The major advantages of a separate SEZ registry is that while the ships registered with it can fly the Indian flag, they may be exempted from payment of domestic taxes. In addition, seamen employed on such ships may also be exempted from payment of income tax. The Commerce Ministry's plan is understood to be to seek the proposed tonnage tax applicable (in place of corporate tax) to ships registered with SEZ registry or to shipping companies registered in the zone. The rate of tax under the proposed tonnage tax will be much lower as compared to corporate tax. Countries such as the Netherlands, Germany and Denmark have a second ship registry. These second registries mainly help their shipping lines to recruit foreign crew.

News on Ports

British Gas Pipavav LNG terminal hinges on NTPC British Gas indicated that viability of its LNG import terminal at Pipavav, Gujarat is fully dependent on the prospect of securing the three million tonnes per annum LNG supply contract of National Thermal Power Corporation (NTPC). Mr. Nigel Shaw, CEO OF British Gas recently told delegates at the `Petrotech 2003' conference in New Delhi that his group needed a secure firm commitment on consumption before investing in the terminal. Meanwhile, the NTPC has floated a tender to procure LNG for its proposed power plants having an aggregate capacity of 1,300 MW. British Gas, along with several other majors like Reliance Industries and Royal Dutch Shell are actively participating in the tender process. British Gas is in the process of setting up a 2.65 million tonnes per annum capacity LNG import terminal at Pipavav, which is slated to begin operations in 2006. So far, the company has invested around $20 million in the project.

Kidderpore Dock II resumes operations The Kolkata Port Trust (KoPT) has reopened the Kidderpore Dock II (KPD II) under the Kolkata dock system after a gap of nearly one year. KPD II was earlier declared closed for want of sufficient traffic volumes. With the resumption of services, the barges carrying imported pulses have already started bringing in cargo - the volume of traffic so far being more than 15,000 tonnes. The export traffic, mainly foodgrain for Bangladesh is likely to be handled from KPD II. In order to attract traffic to KDS II, the authorities have already reduced the rates and have granted licences to enable the exporters to use the sheds for storage purpose. These measures have cumulatively resulted in wharfage charges being reduced by 40 per cent and onboard handling charge by another 40 per cent. The port of Visakhapatnam, which was so far handling bulk of foodgrain exports from north India to Bangladesh and Vietnam, was charging lower port charges - the differential being nearly Rs 140 per tonne.

BHEL launches VTMS for New Mangalore port Bharat Heavy Electricals Ltd. (BHEL) has successfully commissioned its first-ever Vessel Traffic Management System (VTMS) at the New Mangalore port, which it had bagged under stiff international competitive bidding. The VTMS is designed for monitoring safety of navigation, besides traffic at the points of port entrance and intersection of traffic speed zones. It can effectively detect movement and position of vessels in the port area through radar tracking and provide sailing coordination for anchoring, shift of voyage, as per the preset schedule. The VTMS, incorporates an operator display unit and software for enabling all the functions required for the control of vessel traffic. The system comprises radar equipment, VHF direction finder equipment, tracking system, automated identification system (AIS), VTMS computer system, voice and video recording and replay system, communication links and meteorological & hydrological sensors, besides fire-fighting equipment.

Tuticorin Port seeks Central support for capital dredging Tuticorin Port Trust (TPT) has sought Central plan assistance of Rs 100 crore for improving the draft at the port from the present 10.7 to 12.8 meters. TPT chairman Mr. Raghupathy has said that there was a broad consensus that capital dredging being a national asset should be funded by the government. During 1999-00, the Tuticorin port has already spent nearly Rs. 230 crore on capital dredging to improve the draught from 9.13 to 10.7 m, with funds coming from yen loan from the Japan Bank for International Co-operation. During the 10th five-year plan, the Tuticorin port, proposes to add an additional eight million tonnes of capacity estimated to cost Rs 230 crore, with the total throughput forecast to grow to 21.65 million tonnes in 2006-07, the terminal year of 10th plan.

UNCTAD sees small dip seaborne trade in 2001 In its Review of Maritime Transport 2002, the United Nations Conference on Trade & Development (UNCTAD) says the world seaborne trade fell to 5.83 billion tonnes in 2001 from 5.89 billion tonnes in the previous year, ending 15 years of consecutive growth. However, the developing countries' overall share of world seaborne trade has increased slightly in 2001 to 50.5 percent from 49.6 percent in 2000. Oil and other commodities accounted for a large proportion of loaded goods. However, the report notes that in the same period, developing countries experienced a fractional decline in their share of the world fleet from 19.4 per cent to 19.3 per cent although in terms of absolute capacity, their fleet increased by two million dwt to 159 million dwt. On the other hand, worldwide fleet expansion has continued at a pace of 2.1 per cent in 2001, reaching 825.6 million dwt at the beginning of 2002. New ships built were up 1.8 per cent at 45.2 million dwt, while tonnage scrapped and lost was down 27.7 per cent to 27.9 million dwt, leaving a net a gain of 17.3 million dwt. Oil tankers and dry bulk carriers comprised 70.3 per cent of the world fleet while container ships rose by 11.4 per cent to 77.1 million dwt, or 9.3 per cent of the world fleet while containers handled worldwide increased by 15 per cent to 225 million TEUs.

News on Inland Waterways

CIWTC to spend Rs. 40 crore on building fleet The Central Inland Water Transport Corporation (CIWTC), the river services and boat building and repairing company has plans to spend more than Rs 40 crore to complete the construction of vessels lying in an unfinished state for past several years and also repair some of the existing vessels in its own fleet. The plan is expected to help modernize CIWTC fleet consisting of 100-odd vessels of various kinds. Presently, there are as many as six vessels lying in an unfinished condition for the past few years, whose construction is now being taken up in phases while repairs would be undertaken in nearly 50 river craft of various kinds. The funds for works being taken up by CIWTC has been made available by the Union Ministry of Shipping out of Rs 139.5 crore sanctioned as part of the rehabilitation package.

News on Dredging

DCI to take up Hooghly river dredging The government has decided to entrust the Hooghly river dredging work to the Dredging Corporation of India (DCI). Global tenders were floated earlier to select a suitable dredging company for the work, but much progress could not be made. The dredging work is part of the Hooghly river regulatory measures programme taken up by the Ministry.