Week ending August 12, 2001

   

News on Ports

The ICC (Indian Chamber of Commerce) seeks industry recommendations to facilitate the development of a new port facility at Kulpi being developed by Bengal Port Limited, a company jointly promoted by the Mukand-Keventers Consortium & Associates and the West Bengal Industrial Development Corporation in West Bengal. Initially the new facility is expected to handle at least two million tonnes of container and break-bulk general traffic.

P&O consortium bags Chennai terminal project to privatize and develop the container terminal, the second biggest container port in India in respect of total container volumes.

Investment during the first five years of the project is estimated at $100 million. The consortium partners are P&O Ports holding 75%, the Chettinad Group holding 20% and the MBEC Group holding 5%.

Mundra Port, the Rs.6 billion multipurpose terminal of Gujarat Adani Port Limited (GAPL) is setting up the longest railway line in the private sector between the port and Adipur in Kutch and plans to commission the project by October at an investment cost of Rs.1.6 billion. The infrastructure of the rail track would be developed, owned and maintained by GAPL while its operational aspects would be under the purview of the Western railway. An agreement regarding to operations, revenue sharing and other related issues is to be signed between GAPL and the railways very soon. The railway project comprises two intermediate stations - a terminal yard at Mundra Port called receipt and dispatch stations, a number of sidings and spurs to serve commodity specific requirements with platforms, connecting roads, loading and unloading facilities, gantry in the cargo complex as well as rail container yard.

CDLB (The Calcutta Dock Labour Board) is likely to take a long awaited merger decision with KPT (Kolkata Port Trust) after the dock labour board unions failed to come to an agreement on the crucial issue of merger. The Union Government initiated the merger proposal when it amended the Dock Workers' Regulation of Employment Act in 1997 to facilitate such mergers of Dock Labour Boards with respective ports. The merger will be achieved in two phases. In the first phase, the workers and employees of the CDLB will form a new division under the KPT designated as 'Cargo Handling Labour Division'. Thereafter, the steps for integration of the shore workers with the CDLB workers will be initiated in a time-bound manner. However the merger is likely to increase KPT's burden, as it will have to pay a 2300 work force along with 6000 pensioners of DLB.

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News on Shippings

The Shipping Corporation of India has decided to enter into two separate joint ventures with three Japanese companies Mitsui OSK Lines, NYK Line and K line- for constructing and operating two liquefied natural gas (LNG) ships at a building cost of about $373 million at a debt-equity ratio of 75:25. The two joint ventures would transport LNG from RasGas in Qatar to the Petronet LNG (PLLs) terminal build at Dahej in Gujarat. The joint ventures have been contracted for 24 years and would be incorporated at Malta to avail the advantages of the double tax avoidance agreement between India and Malta.

A new Indo-Iranian shipping venture is planned to cater to the countries growing crude oil import. The proposed venture would involve an initial investment of $100 million and is likely to be a subsidiary of the Teheran based Irano-Hind Shipping Company, an existing joint venture between the public sector Shipping Corporation of India and the Islamic Republic of Iran Shipping Line. Initially the company would be acquiring three tankers and is expected to be ready with its tankers by March 2002.

PLL (Petronet LNG Ltd.) has invited pre-qualification bids for Engineering, Procurement and Construction (EPC) contract for the Rs.16 billion LNG import and regassification terminal at Kochi in Kerela. PLL has put on hold the earlier plans to construct the Kochi terminal on Build-Own-Operate-Transfer (BOOT) basis in favour of EPC contract. The facilities would include unloading arms, vaporization system, utilities and off-site facilities. All pre-project activities including various on-shore and off-shore surveys/ investigations, preparation of detailed feasibility report, mathematical and physical modeling studies, terrestrial and marine environment impact assessment studies, terrestrial and marine impact assessment studies have been completed.

Meanwhile, Petronet LNG has signed MoU with prospective buyers for liquefied natural gas to be supplied from its proposed Dahej and Cochin terminals. MoU have been signed with 13 buyers for 25.08% mmscd (million standard cubic meters per day) LNG from Dahej, five suppliers have signed pacts for 9.34 mmscd from Cochin.

The Union Ministry of Shipping is likely to set up a working group on tonnage tax in response to a long-standing demand of the Indian shipping Industry. The committee would include members of the Union Ministry of Shipping and finance as well as shipping industry representatives. Indian shipping companies that are levied corporate taxes on their profits, are among the highest taxpayers in the global shipping industry. Globally 70% of the shipping tonnage is accounted for by flag of convenience (FoC) vessels, registered in countries, which offers the zero tax benefits. Another 20% of the tonnage comes from countries, which levy minimal taxes in the form of tonnage tax on their shipping industry.

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News on Logistics

Gati Ltd., a retail express cargo and logistics solution provider, has recorded an increase in operating profit from Rs.0.16 billion to Rs.0.17 billion for 2000-2001 on a turnover of Rs.2.5 billion. The company has earned a net profit of Rs.80 million and declared a dividend of 40% on an enhanced paid-up share capital. Meanwhile, the company has made heavy investments on brand-building through information technology for customer service and online real-time tracking system.

TCI (Transport Corporation of India) is in talks to rope in an alliance partner in China. The company is also in talks with companies in Pakistan and Sri Lanka for similar alliances. It already holds a 49% equity stake in Transystem Logistics International Limited to provide automotive logistics solutions with Mitsui & Co. of Japan as well as the automotive logistics solutions for Toyota. TCI is an integrated logistics service provider serving 3000 destinations with its fleet of 2,500 trucks through a branch network of 800 offices, 30% of which are owned by the company.

The Konkan Railway has submitted its skybus metro project to MMRDA (Mumbai Metropolitan Regional Development activity. This project is an innovative proposal offering a solution to the urban transportation problem. It also offers a cost-effective, non-polluting and fuel-efficient transport system.

ICT (International Consultants and Technocrats Pvt. Ltd.) has bagged a contract from the government of Mongolia for providing technical consultancy for road development. The contract envisages preparation of a detailed engineering report as well as bid documents for the 56-km Erdenet-Bulgan road project estimated to cost $10.7 million.

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