Week ending December 14, 2002


News on Shipping

Foreign stake in excess of 25 per cent allowed in SCI The Union Disinvestment Ministry has reportedly agreed to allow foreign share holding in SCI in excess of 25 per cent limit under certain specified circumstances, setting aside earlier cap of 25 per cent. The new proviso has been included in the final draft of the shareholders agreement. Presently, all the four bidders - Great Eastern Shipping Company Ltd., Essar Shipping Ltd. Sterlite Group and Videocon - are bidding on their own without any foreign partners. However, it is likely that successful bidder might pledge part of his 51 per cent equity acquisition against a overseas bank loan. The revised stand of the Ministry of Disinvestment follows an representation made by prospective lenders that stipulation of a one year lock-in period for invoking the pledge of shares in case of a default by the borrower was contrary to the RBI guidelines which requires that security of shares against which advances are made should be freely marketable at all times.

SCI posts Rs.241.56 crore net profits for 2001-02 The Shipping Corporation of India (SCI) has posted Rs.241.56 crore net profits for the fiscal year ended March 2002, compared to a net profit of Rs. 382.56 crore recorded in the previous fiscal year. The board of directors of SCI has attributed the fall in profitability during the year in review to a depression in the operating income of various business streams of the company. Higher incidence of dry-docking and repairs, along with several write-offs and creation of additional assets had also affected the bottom line. SCI disposed off eight vessels during the fiscal year and is currently left with 94 vessels totaling 4.3 lakh dwt.

No stake in maritime institute for SCI bidders With the government deciding to hive off the Maritime Training Institute (MTI) into a separate entity, bidders for the 51 per cent stake in Shipping Corporation of India (SCI) will have no stake in the 40-acre campus of the institute. The MTI, was cross-subsidized by the SCI and has now been brought under government control and proposed to be turned into an independent maritime university.

Asia-Europe Box rates to go up from January 2003 The Far eastern freight Conference (FEFC) has announced that container freight rates on both the West and East bound Asia-Europe container trade would be hiked from January 2003, saying that current rates are still 30-40 per cent below " acceptable levels". The conference grouping of 15 major container lines active on the Asia-Europe trade is planning a three-stage rate hike from early next year, amounting to $650 per TEU west bound and up to $400 per TEU eastbound.

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News on Ports

PSA Corp. reports 29 % growth in container volumes PSA Corporation, the port operator for Singapore port has reported 29 per cent growth in container throughput to 2.12 million TEUs in November on a year-on-year basis. The throughput figures include the traffic volumes for terminals operated by PSA locally and overseas. Singapore port has handled 1.39 million TEUs in November, up by seven percent from the same period in 2001. The PSA terminals include Guangzhou Container terminal in China and the Hesse Noord Natie terminal in Belgium. PSA has been facing tough competition from smaller regional players, losing Maersk Sealand and Evergreen to Malaysia's Tanjung Pelepas.

Hamburg port to handle over five million TEUs in 2002 The port of Hamburg, one of Germany's biggest port expects to cross five million TEUs by end of 2002. The Hamburg port authorities have stated that during the first ten months of the current year, the port has posted a growth of 6 per cent in cargo traffic over the corresponding period of the previous year. The port expects to reach a traffic volume of 100 million tonnes by end of 2002. The port had seen traffic of 4.4 million TEU in 2001 and was among the top ten container ports in the world.

Kerala's Vizhnjam port attracts 21 global consultancy bids Following the global tender floated by the Kerala government inviting expression of interest (EOI) bids to be chosen as consultants for the Greenfield Vizhinjam port proposed to be set up near Thiruvananthapuram. Companies from UK, Austria, Singapore and Australia are among those who have put in the EOI bids, along with India companies like Larsen Toubro and TCS. Selection of the consultant for the project is likely to be finalized by January 2003. The Rs. 2,500 crore project has been proposed by the Kerala government with a view to create India's Southern-most port, which will be able to handle future generation vessels that are thrice the size of the vessels proposed to be serviced by the Vallarpadam terminal.

PPT road project to connect all berths completed The Paradip Port Trust (PPT) has completed the construction of nearly 8 km of concrete roads in the port area connecting all the 13 berths costing Rs. 11 crores. One more berth is under construction. The road connectivity between various berths was poor and had posed many problems for the trucks moving bulk cargoes in the port area, leading to spillage and pollution.

NMMT to allow use of transit sheds New Mangalore Port Trust (NMPT) has permitted the use of "transit sheds" within the dock without the compulsory deployment of port labour. The NMPT move has been welcomed by the Association of New Mangalore Port Stevedores and the New Mangalore Port C&F Agents Association and seeks to activate the use of 19,254 square metre of covered area within the port, which had been in disuse because of the earlier requirement that only 'port labour' could be employed in the facilities in the port area.

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News on Shipbuilding

Hyundai to build two VLCCs for SCI The board of directors of Shipping Corporation of India (SCI) have reportedly approved the price bid of $ 65.2 million submitted by Hyundai and has forwarded the proposal to the Shipping Ministry for final approval. The South Korean shipbuilder has emerged as the lowest bidder for building the 3,00,000 dead weight tonne vessel. The proposal for acquisition of the two VLCCs has however, been opposed by the Ministry of Disinvestment, with the SCI disinvestments plan in an advanced stage. The SCI's plan to acquire the two VLCC vessels is aimed at meeting the requirement of Indian Oil Corporation (IOC) and Reliance Industries Ltd., the two major importers of crude oil. On an average, two to three VLCC vessels for IOC and about 6-7 VLCC vessels in case Reliance call on the Indian coast. All these vessels are foreign-flagged ones and there is no Indian flag VLCC vessel at the moment.

Cochin Shipyard to expand training services The Cochin Shipyard Limited (CSL) is planning to further expand the training facilities at its Marine Engineering Training Institute, by including courses in fire fighting. CSL is planning to set up an exclusive complex at an ideal location along the water front, where necessary mock-up unit and other fire fighting equipment will be set up. The training scheme is being formulated in accordance with the IMO standards and is accredited with ISO-9001 quality standards.

News on Logistics

Government to extend 90 % grant to IWT projects The Central government will extend 90 per cent grant to state governments wanting to take up inland waterway projects. The Central government has sought assistance from World Bank and Asian Development Bank (ADB) for undertaking inland waterway projects. The ADB had initiated technical assistance of $1.125 million towards appointment of consultants for updating studies and preparation of IWT investment projects, before sanctioning of assistance. The government's inland waterway transport (IWT) development policy has sought to extend a number of concessions for the private sector initiatives in taking up IWT projects inland water. The government intends to develop the IWT mode through plan assistance and private sector participation. Inland vessel Building Subsidy of 30 per cent on the cost of building inland vessel is given to shipyards, while for encouraging ownership of inland vessels, the government is allowing higher depreciation rate for inland vessel operators and levying reduced customs duty on import of some equipment and machinery related to IWT sector.

CONCOR operates exclusive export rake to Haldia Container Corporation of India (Concor) has for the first time operated an exclusive export rake to Haldia from the Tughlakabad ICD, to move 50 export containers for shipment to Chittagong port in Bangladesh. The boxes handled so far by Concor were brought by its domestic rakes from Tughlakabad to Cossipore ICD and then moved to Haldia port. Transworld, the ocean carrier has entered into an arrangement with Concor, with the responsibility for land transportation of the boxes from various ICDs in North India to Haldia dock for shipment to Bangladesh.

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