Week ending July 04, 2002

   

News on Ports

Reliance Ports & Terminals plans to raise $ 240 million The Reliance group is planning to float a global depository receipts (GDR) issue of $ 400 (close to Rs.2, 000 crore) through two of its infrastructure based companies – Reliance Utilities & Power (RUPL) and Reliance Ports & Terminals (RPTL). Of this total amount to be raised through GDR issue, RPTL will raise $ 240 million while RUPL will raise $ 160 million. Reliance Group is also reported to be planning to place 15 % of the equity in the two companies with foreign investors. The proposed GDR is planned to be listed on the Luxemburg Stock Exchange. RTPL currently operates a captive 50 million tonne port, which is said to be the largest private sector port in India. The port mainly receives crude oil, which is subsequently processed in the Jamnagar refinery. The funds being raised are likely to be used for capacity expansion and capital expenditure in the port’s operations.

News on Shippings

Essar Shipping sees decline in Q4 net Essar Shipping has reported a decline in net profit to Rs.20.40 crore for the fourth quarter ended March 31 2002 as compared to Rs.49.73 crore in the corresponding quarter last year. Income from operations too declined to Es.124.72 crore from Rs.137.63 crore last year. For the year ended March 31 2002, net profits stood at Rs.72.76 crore as against Rs.100.27 crore last year. Total income however, was up by four per cent to Rs. 490.98 crore from 472.39 crore. The decline is attributed to the substantial fall in freight rates in the crude carrier segment.

IPBC war-risk levy for ports north of Mumbai The member lines of the India/Pakistan/Bangladesh/Ceylon (IPBC) conference serving the trade route between some West coast ports and Europe have notified a war risk surcharge of $ 25 per TEU with effect from July 1 2002. The notification follows a decision by the insurance underwriters to cancel contracts for ports north of Mumbai. The move will affect two ports in Pakistan as well viz. Karachi and Qasim. Earlier the feeder operators serving the trade route between Indian sub-continent and West Asian ports had announced an additional war risk surcharge of $ 50 per TEU for laden containers. The war risk surcharge will affect containers moving in and out of the ports of Mumbai, Jawaharlal Nehru port, Kandla and Pipavav in India and Karachi and Qasim in Pakistan.

Star Cruises plans operations out of Mumbai Star Cruises, the Norway-based cruise liner company regarded as fourth largest in the world has shown interest in starting its services from Mumbai. The cruise liner company has been reported offered a shed by the Mumbai Port Trust. According to available data while only about 1000 Indians cruised in 1996-97, around 10,800 have opted to cruise in 1999, which has further increased to 21,000 in 2001. According to forecasts made by Star Cruise the number of people going on cruises is expected to further go up to 30,000 b y end of 2002. Currently Indians have to fly to Singapore or some other country from where the cruise line operates. Star Cruise is also reported to be looking for a possible joint venture partner for the project. Cruise shipping is a seasonal activity in Indian waters, as seas are very rough during the monsoon months and cruise ships have to suspend operations during unfavorable season.

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News on Inland Waterways

IWAI seeks private sector investments in national waterways Inland Waterways Authority of India (IWAI) has worked out model agreement for inviting private sector participation in the development of three national waterways. Based on the model agreement, the IWAI is planning to invite bids for 10 projects in August 2002. The likely private sector participation will be mainly in two streams – setting up of cargo terminals and running of vessel services on the identified waterways. Some of the major shipping companies like Shahi Shipping and Essar Shipping, besides other smaller shipping companies like Vivadas Inland Shipping Company and Lots Shipping have shown interest in participating in these projects. The terminals on the Ganga waterway would be at Allahbad, Varanasi, Chunar and Mirzapur (all in Uttar Pradesh) and on the Brahmaputra at Dhubri, Tejpur and Meamati (all in Assam). These terminals would be run on a build-own-operate (BOT) basis and would have container handling capacity ranging from 10,000 to 20,000 tonnes per annum. The IWAI is also planning to set up an Rs.25.15 crore terminal at Patna on its own, with a capacity of 20,000 tonne per annum to serve the container movement to and from Nepal.

Kerala government to revive Vizhinjam port project The Kerala government is seeking to revive the long pending proposal for the development of Vizhinjam port near Thiruvanathapuram, with steps being taken to conduct a technical feasibility study on the project. Under the initiative, ICICI-Kinfra, a joint venture between ICICI and Kerala Industrial Infrastructure Development Corporation has entered into tie-up with Tata Consultancy Services (TCS) for conducting the study. The JV has already completed a similar technical feasibility study on the development of Azhikal port in Kannur district in association with Howai India Ltd. The proposal is to develop the existing harbour at Vizhinjam into a major commercial port on a build-own-operate (BOT) basis and the project is estimated to cost Rs.800 crore in the first phase. The Vizhinjam port is one of the five minor ports in Kerala identified for development way back in 1995. It is considered to have the potential to become a major container transshipment terminals being close to international shipping route between UK, West Asia and Far East.

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News on Logistics

Transport subsidy for more agri product exports After announcing transport subsidy for export of food grains and sugar, the government is reportedly considering extending the scope of transport subsidy to fruits, vegetables, dairy products, poultry and processed food as well, in an effort to boost agro exports from the country. The subsidy scheme, which is compatible with the WTO requirements, is expected to come into operation in July or August. Agricultural Products Exporters Development Authority (APEDA) has prepared a draft formula for the subsidy scheme suggesting a margin subsidy at the rate of 20-40 per cent of the total transport cost incurred. Meanwhile, as per data released by the Central Statistical Organization (CSO) the performance of agriculture, forestry and fishing sector registered a 5.7 per cent growth during 2001-02 as against decline of 0.2 per cent in the previous year. Improved performance of agriculture has had a positive impact on the country’s gross domestic product (GDP), which grew by 5.4 per cent during 2001-02, against 4 per cent last year.

CONCOR planning major forays in logistics services The Container Corporation of India (CONCOR) has plans to become an integrated logistics services provider by 2006 through several joint ventures with private and public sector partners in launching various services. Concor plans to enter into a number of strategic alliances over the next five years, which include getting into coastal shipping, medium and short-haul road transport, third party logistics, building and maintaining cold chain and building container terminals and warehouses. An investment of Rs. 1,4000 crore has been earmarked for the 2002-06 period. Among the new strategic alliances planned include one with Department of Posts for parcel movement, with Haryana Warehousing Corporation for an ICD-linked container freight station. In the road sector, Concor is planning to acquire a trailer fleet to integrate long rail and short and medium road hauls.

 

 
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