Week ending May 31, 2003

News on Shipping

Essar posts 81 per cent hike Q4 net profit : Essar Shipping Ltd., has posted 81 per cent growth in its net profits at Rs.36.51 for the fourth quarter ended March 31, 2003, compared to Rs. 20.40 crore in the corresponding quarter of the previous year. The total income has grown by 26 per cent to 155.38 crore from 123.23 crore in the last year. For the fiscal year ended March 31, 2003, the net profit has however, declined to Rs.63.30 crore as compared to 72.70 crore last year. Total income too has declined marginally to Rs. 489.10 crore from Rs. 490.98 crore in the previous year. During fiscal year, the company has however, paid out its high-cost debt by approximately Rs.142 crore, which has helped reduce its debt-equity ratio to 0.53:1 from 0.63:1.

Shreyas to foray into feeder services on East coast : Shreyas Shipping Ltd. is planning to enter into container feeder service on the East Coast for the first time. The proposed services plan to link Haldia, Visakatanam and Chennai ports. The coastal transshipment service will be started after the company acquires two second-hand container vessels, each having 500 TEU capacities. The vessel acquisition plan is presently awaiting approval by the board of the company. The company is expecting rapid growth in the demand for feeder traffic on the East coast, where it plans to deploy two of its to be acquired feeder vessels.

News on Ports

TAMP introduces hourly berth hire charges : Following series of revised measures finalized by Tariff Authority for Major Ports (TAMP), hourly berth hire charges will come into force in all the designated major ports of the country effective from June 1 2003. As per the new tariff system, berth hire charges would now be calculated on an hourly basis, instead of berth day basis. TAMP began the exercise for rationalizing port tariffs in 1998 and passed an order in January 2000 reducing the basic duration for berth hire charges from 24 hours to eight hours in all major ports. The port users had further sought reduction of the period to one hour. While TAMP proposal is benefiting the port users, several port trusts, particularly at Kandla, JNPT, New Mangalore have objected to the new tariff regime, as it would mean substantial revenue loss for them. However, TAMP has overruled the objections and stuck to its proposal.

Cochin to re-tender bunkering terminal : Cochin Port Trust (CPT) has reportedly decided to opt out of the build-own-operate (BOT) route for setting up proposed bunkering terminal at Puthuvypeen, near entrance to Cochin harbour. The proposal has been dropped, as there were clear disadvantages of taking up the project under BOT terms. As the bunkering terminal location did not come under the SEZ and lacked facilities like power, water and transport, the port now proposes to re-tender the project. Four Indian companies - Indian Molasses Company, Indian Oil Corporation, Bharat Petroleum Corporation Ltd., and Essar Shipping had evinced interest in the project.

News on Logistics

Transchart throughput up by 67 percent : Transchart, the ministry of shipping's chartering wing that looks after all government cargo has seen a 67 per cent increase in cargo volume chartered during 2002-03. The increase is mainly owing to public sector oil major Indian Oil Corporation (IOC) taking its help for shipping crude oil, contracted prior to the deregulation of the sector in April 2002. Transchart during the year however, also handled delivery of some of the spot contracts for crude oil by other oil PSUs like BPCL and HPCL. Out of the total quantity of 51.22 million tonnes of cargo for which shipping arrangements were made by Transchart in the period, 17.77 million tonnes (34.7 per cent) were carried through Indian flagged vessels.

Concor & P&O Ports sign MoU for rail linkages : Container Corporation of India (Concor) and P&O Ports India have signed a memorandum of understanding (MoU) to improve the quality and frequency of rail connectivity between Concor's ICD network and P&O Ports India-managed terminals at Nhava Sheva, Chennai and Mundra. The MoU seeks to fix the time frame for container movement to ports and create transport contracts that would be backed by penalty clauses to prevent breach of deadlines. The MoU will also enable introduction of dedicated container movement services between Tughalakabad and P&O terminals at Chennai and Mundra as also NSICT. MoU also envisages guaranteed fixed handling time for containers at these terminals, with system of penalties and rewards to improve efficiency levels.

P&O exits from Conware takeover bid : P&O Ports India has reportedly pulled out of the bidding process for the Punjab State Container & Warehousing Corporation (Conware) after the global advisors RR Financial Consultants disqualified it expression of interest (EoI) on the grounds that it lacked the necessary documentary support for meeting the net worth criterion. The minimum net worth criterion for bidding for Conware is Rs. 20 crore. The Punjab government, which wholly owned the company, had called for strategic investor to sell its 100 per cent equity stake in the loss making company to retire its costly debt. Conware owns a 2-acre Container Freight Station (CFS) at Dronagiri near Nhava Sheva port, which has capacity for handling 100,000 TEUs.

Concor plans CFS at MEPZ : Container Corporation of India (Concor) is planning to set up a container freight station (CFS) within the Madras Export Processing Zone (MEPZ) and has approached the Chennai Customs authorities for obtaining necessary custodianship for the setting up the facility. The setting up of the facility would offer one-stop facility to customers, which will enable handling of export cargo from CFS to Chennai port in eight hours and import cargo within 24 hours. Similar CFS is being also planned at Cochin's Special Economic Zone (SEZ). The initiatives form part of the efforts of Concor aimed at improving efficiency of "last-mile linkage" to customers.