Week ending June 14, 2003


News on Ports

TAMP Okays 10 per cent tariff hike in Chennai private box terminal Tariff Authority for Major Ports (TAMP) has given its approval for an average 10 per cent hike in tariffs on carnage and wharfage at the privatized container terminal in Chennai port. Following this hike, the existing penal charges on demurrage cargo will now be applicable, only when a cargo removed from container and stored beyond three days. Such penal charges will be applicable on Less than Container Load (LCL) cargo, which requires destuffing at the port, beyond three-day free period, at the rate of Rs. 10 per tonne per day up to 10th day and Rs. 100 per tonne per day thereon. The P&O Ports, the private terminal operator had sought the revision of the port charges and for reduction in tenure of free period from earlier ten days to three days. Before the take-over of the container terminal by P&O Ports, the penal charges of Chennai Port Trust (CPT) ranged from Rs. 15 to Rs. 50 per tonne per day after the 10-day free period.

BOOST pact for Rewas and Dighi port signed The Maharastra Maritime Board (MMB) has entered into a Build Own Operate Share and Transfer (BOOST) agreement with Amma Lines Ltd and Dighiport Ltd. respectively for the development of Rewas and Dighi ports. As per the agreement terms, the concession period is up to 50 years, including five years of construction period. As per the estimates prepared by the two companies, the project is expected to cost around Rs. 12-15 billion in the first phase, with the Maharashtra Maritime Board (MMB) holding an equity of 11 per cent. The first phase of Rewas port would constitute of five berths, comprising two bulk, one petrochemical terminal and two container berths. The Dighi port would involve construction of two liquid cargo terminals for crude, chemicals and LNG and a container berth in the second phase.

Four port developers short listed for Gangavaram port The selection process for choosing the successful bidder for the Rs 15. 2 billion Gangavaram port project has been initiated with four out of the 10 companies that had shown interest in the project being now short-listed. Four companies had collected their request for proposal (RFP) and the deadline for submission of the detailed proposals is fixed on May 8. 2002. The Andhra Pradesh Industrial Infrastructure Corporation (APIIC), the nodal agency to develop the Gangavaram port, through private participation, is expected to take a final decision and select the final developer in place by June-end. The four companies finally in the race are Adani Exports Ltd, a consortium of Dubai Ports International, West Port Holdings of Malaysia and the Singapore-based Jurong Consultants, the Lanco group and another consortium of BMT Asia-Pacific Ltd of Singapore and Port of Brisbane Corporation of Australia. According to APIIC's projections, the Gangavaram port had the potential to receive 17.57 million tonnes per annum (MTPA) of traffic by 2006 (including 8.8 MTPA of dry bulk, 4.08 MTPA of container and 1.09 MTPA of liquid bulk cargoes) and 35 MTPA by 2012 (including 22.2 MTPA of dry bulk and 7.8 MTPA of container traffic).

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News on Shipping

Exemption bank guarantee for transshipment containers urged Shreyas Shipping, in a letter addressed to the Mr. Bongirwar, chairman of the Committee on Transshipment and also of the Jawaharlal Nehru Port Trust (JNPT) has urged for exemption of 15 per cent bank guarantee requirement for carrying out transshipment of containers. The Committee on Transshipment headed by Mr. Bongirwar in its report had recommended simplification of transshipment procedures, through a common corporate guarantee instead of bank guarantees in respect of each container movements. The bank guarantee in respect of custom bonded goods is enforced for purposes of customs recovery, in case of non-fulfillment of transshipment obligation. However, coastal shipping operators feel that they would benefit if exempted from having to furnish bank guarantees, as they will be able to handle more tonnage.

SCI permitted to negotiate contracts with HPCL, BPCL The government has reportedly allowed the Shipping Corporation of India (SCI) to directly negotiate with public sector oil refineries Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) for transporting their crude cargo from the Persian Gulf region. The decision to allow SCI to undertake the crude transportation requirements of both HPCL and BPCL on market-related AFRA rates was cleared on March 15. Both HPCL and BPCL have contracts with suppliers in the Persian Gulf for import of 15 million tonnes of crude for their refineries at Mumbai and Visakhapatnam (for HPCL) and Mumbai and Kochi (for BPCL). The SCI move follows the decision of Indian Oil Corporation (IOC) to move out of the role nodal agency from April 1 2002 by finalizing its annual crude purchase and transportation contracts on its own. Both HPCL and BPCL are expected to follow IOC in making their own crude purchase and transportation contracts without going through the nodal agency system.

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News on Offshore

GSPC-Niko to set up Hazira offshore platform The Gujarat State Petroleum Corporation (GSPC) - Niko Resources combine is reported to be finalizing plans to install an offshore platform in the Hazira offshore area, at an estimated cost of around Rs 300 crore. About 8-10 offshore platforms are to be commissioned by 2003. Exploitation of offshore gas is expected to result in increased production of gas, taking the total production to around 4-5 million cubic metres per day. The additional gas would also meet the increasing demand of the industries in Gujarat. The Hazira gas field has been under development since 1995, after GSPC and Niko signed a production sharing contract with the government in 1994. So far, 19 wells have been drilled, resulting in the establishment of a significant reserve base and a daily production of over 2 million cubic metres of gas daily. Various versions of reserve estimates have been discussed between GSPC-Niko and the DGH over the past few years. However, D&M was roped in order to have an independent opinion from a reputed international firm.


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