Week ending July 25, 2002


News on Ports

JNPT decides on BOT route for conversion of bulk terminal Jawaharlal Nehru Port (JNPT) board of trustees at its recent meeting has decided to opt for build-operate-transfer route for the new Rs.1, 000 crore project for setting up a container terminal after converting its present bulk container terminal. The decision approved by the majority of trustees has opposed the earlier proposal to form a joint venture with foreign public port by offloading 74% of its stake. The decision to take up the project on a 30-year BOT basis also entails sharing of the revenue with the potential operator instead of the earlier royalty-based agreement JNPT had entered into with the P&O Australia, which operates the private container terminal.

Container terminal agreements to have security clause Union Shipping Minister Mr. Vedprakash Goyal has reportedly stated that all future agreements on setting up private container terminals at major ports in the country will have a new security clause, which will empower the Central government to takeover the terminal from the private operator in case of a perceived threat to national security. The government stand comes in the wake of similar policy followed in case of Shipping Corporation of India (SCI) disinvestments, where strategic bidders for the SCI were required to go through a security clearance.

Andhra Pradesh to develop Machilipatam port The Andhra Pradesh government is planning to privatize the Machilipatanam port and is expected to shortly invite for expression of interest (EOI) from private port developers. The government has appointed RITES Ltd. as consultant for preparation of a detailed project report (DPR) for developing the port as a deep-water port. The port when developed could handle thermal coal imports for the nearby Vijaywada Thermal Power Plant besides handling exports from Godavari and Krishna basin region. Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is expected to be appointed as the nodal agency for the port project. APIDC is also currently the nodal agency for the development of Gangavaram project. Presently, among the minor ports of Andhra Pradesh, Kakinada port is handling about 5 million tonnes of cargo.

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News on Shipping

Aban Lloyd-Qatar Shipping consortium pulls out of race for SCI stake The Aban Lloyd-Qatar Shipping consortium has pulled out of the race for taking over Shipping Corporation of India. A notice to this effect has been sent to the Bombay Stock Exchange (BSE). With the withdrawal of Aban Lloyd and Qatar Shipping combine from the SCI race, only three of the original bidders - GE Shipping, Essar Shipping and Sterlite group are left to participate in the disinvestments process. Earlier, Mitsui OSK and Malaysian International Shipping Company had been among foreign shipping companies that had pulled out of the disinvestments process. Most of the foreign shipping companies, which had initially shown interest in the SCI, were not willing to accept 25 per cent cap on foreign equity, out of the 51 per cent of stake that was being offered through the disinvestments route.

GE Shipping to raise $ 140 million through ECB routeGE Shipping is raising $ 140 million through the external commercial borrowing (ECB) route to part finance its fleet expansion programme. The company plans to acquire two Aframax crude carriers and two product carriers to help increase company's current market share in movement of crude and petroleum products. GE expects to domestic crude oil demand to rise substantially after the deregulation of the oil sector. The company presently has two Aframax and seven medium range product tankers, besides one Suezmax vessel. The company has already placed orders with Hanjim Heavy Industries of Korea for the two product carriers. Both the Aframax have a capacity of 105.50 DWT (dead weight tonne) each, while the product carrier will have a capacity of 45.50 DWT each.

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News on Shipyards

Cochin Shipyard to enter into FPSO projects Cochin Shipyard Ltd. (CSL) is seeking to enter into the offshore construction market and is reported to be among the 14 companies that have bid for the ONGC's Floating Production Storage & Offloading (FPSO) project. CSL is the first shipyard to enter the race and is part of the strategy of diversifying its operations. The shipyard proposes to enter into a joint venture if the bid attempt is successful. The shipyard has the facilities to build the FPSOs, which could go down up to 900 meters.

News on Logistics

CONCOR launches train service from Vadodara to JNPT The Container Corporation of India (CONCOR) has launched a new dedicated train service from Concor's Railway Terminal (RCT) at Vadodara to JNPT and New Goods Shed Mulund. The service will be operated twice a week and is expected to reduce the transit time. The new train service has become operational from July 23.

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