Week ending January 28, 2001


News on Ports

The earthquake in Gujarat has severely affected the Kandla Port,  damaging one of the three oil jetties, few warehouses inside the port premises and most of the telephone lines. A pipeline and an oil storage tank have also been damaged causing a major oil spillage. A bridge leading to the National Highway has also collapsed affecting vehicular traffic and cargo movements from the port. However, the other private ports at Pipavav and Mundra have escaped undamaged by the earthquake.

The Cabinet Committee on Economic Affairs has cleared the revised cost estimates for creating mechanised coal handling facilities at the Paradip Port from Rs.5.8 billion to Rs. 8.31 billion including foreign exchange component of Rs. 1.9 billion. The project will help in economically transporting coal through rail and sea, from Talcher in Orissa to the thermal power plants in the coastal regions of South India.

Petronet LNG Private Limited has awarded IHI, a Japanese consortium, the equipment procuring and construction (EPC) contract worth Rs. 46 billion for the liquified natural gas terminal project at Dahej in Gujarat. IHI has been awarded the technical and price bid for the project. The other companies that were short listed for the project were  Chiyoda, Hanjang of South Korea, Technigas and TechniMount consortium of France.

The Union Government is considering to amend the Major Port Trusts Act, 1963, which will grant legal sanction to the major ports that are covered under the Act. The amendment covers two issues namely - one to enable Government to denotify major ports from the ambit of MPT Act before converting them into corporate entities. Second,  the  Act will allow the Government to transfer its assets, rights and liabilities in the port from the board of trustees to the new corporate entity.

Gujarat Adani Port Limited (GAPL) at Mundra has set itself the target of 119 million tonnes of cargo handling with a berthing length of 4,000 meters by the year 2027. GAPL, during the last one year, handled 12 Panamax vessels of 70,000 dwt each with handling of two Panamax vessels simultaneously for unloading coal. The Mundra port is also slated to get connected to the national broad gauge railway network through a 57 km rail link with Adipur by the second quarter of 2001.

The Container Feeder Operators (CFO) serving the Chennai port have announced the introduction of a US$100 per TEU congestion surcharge on all laden container movements from Chennai/Colombo and vice versa, and Chennai/Singapore vice versa. The surcharge will take effect on or after February 10, 2001 on all vessels sailing from Chennai, Colombo, Port Klang, Tanjung Pelepas and Singapore. The surcharge will be for a duration till the 'go slow' adopted by the workers at the port container terminal demanding higher productivity linked incentives scheme is there. The 'go slow' activity adopted by the Chennai port container terminal workers is affecting engineering exports resulting in piling of containers, compelling the concerned exporters to divert their containers to the Tuticorin and other ports .

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News on Shipping

Varun Shipping Company Limited will be augmenting its existing fleet of 11 vessels which includes one vessel on management basis in April 2001.  The company is coming out with a rights issue of Rs. 10 each at par aggregating to Rs. 362.6 million which will be opened in the last week of February. The proceeds from the rights issue will be utilised in acquiring vessel. The type and number of vessel has not yet been finalised by the company.

Central Government has cleared a package of amendments permitting Inland Waterways Authority of India (IWAI) to float bonds for mobilising funds from the market and to enter into commercial and joint ventures. The package also provides grant of 100 per cent tax exemption to investors for five years and further, 30 per cent exemption for the next five years as well as  introduction of 30 per cent subsidy for inland water vessels constructed in Indian shipyards and fixing of the rate of depreciation for vessels operating in inland waterways at 20 per cent on par with that of ocean going ships. Approval for the policy guidelines for private sector participation in inland waterways projects subjected to an equity participation by the government /IWAI limited to 40 percent for build, operate and transfer projects is also given.

The Ministry of Shipping is in favour of proposal for the transportation of LNG by companies registered in India and vessels carrying the Indian flag. The Shipping Ministry will take this proposal to the Committee of Secretaries and Cabinet level for consideration. The move to get Indian LNG ships registered in India would bring with it tax benefits and would spur ancillary business activities in the sector.  

The discontinuation of Loan Interest Subsidy Scheme (LISS) by the Shipping Ministry for acquiring inland water barges has caused resentment among barge operators. It is argued that the 30 per cent subsidy provided on the  cost of vessel by the public shipyard is not viable as it costs more. In this regard, the barge operators at Kochi had submitted memorandum to the visiting Parliamentary Standing Committee on tourism and shipping, urging them to take up the matter before the government for the re-introduction of the LISS. Also, the Mumbai based Indian Barge Owners Association has already represented to the Government with an appeal for the continuation of the scheme.

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News on Shipyards

Hindustan Shipyard Limited's  floating dock project has received 10 bids with bidders coming from Singapore, China, Russia and few other European  companies. HSL is expected to finalise its choice shortly and place requisite orders for the Rs. 250 million project by March 01, 2001. The floating dock project will add an additional ship repair capacity of 3000 tonnes to HSL. 

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News on Logistics

A vertical portal everythingabouttransport.com is launched by  EA Transport Private Limited, a logistics e-commerce solutions company. The portal, with an equal focus on all the modes of transportation, is expected to serve shoppers, carriers, service providers and private fleet operators to conduct online and offline business. 

Federation of the Freight Forwarders’ Association in India recently held its 15th biennial convention, inaugurated by Mr. S. Sathyam, Chairman, Tarrif Authority of Major Ports. The theme of the convention “Forwarder- into the e-millenium”, laid emphasis on the important role played by the forwarders in the shipment of the goods, which will not vanish with the advent of the internet and e-commerce.

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National Highways Authority of India has invited offers for 

Tender for: 4-laning of Chennai (Tambaram)-Tindivanam section on National Highway 45 on BOT basis.
Tenders may be obtained from
: The General Manager (PI)-IV, National Highways Authority of India, 3, Ring Road, Kilokri, New Delhi 110065.
Scope of work
: includes strengthning of the existing 4-lane stretch from Km 28 to Km 67 and widening to 4-lane divided carriageway and strenthening of existing 2-lane road stretch from Km 67 to Km 121 on Chennai (Tambaram)-Tindivanam section in Tamil Nadu and also operation and maintenance of entire section from Km 28 to Km 121 for specified period, on build, operate and transfer (BOT) basis.
Approximate cost of project: Rs. 3.77 billion
Last date for submission
:  February 9, 2001, 17.00 hours.


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