Week ending September 12, 2002


News on Shipping

Mercator Lines expands capacity Mercator Lines Ltd. (MLL) has expanded its fleet by acquiring a second-hand tanker vessel of 52,711dwt, which was deployed during the first quarter of FY 2002-03. Mercator lines has two divisions viz. Lighterage and Shipping. The lighterage division operates in the Mumbai port and handles bulk liquids like petroleum products and chemicals. The shipping division is engaged in the coastal and international movement of petroleum products and other liquid cargo.

SCI grants VRS to its employees The Shipping Corporation of India (SCI) currently undergoing disinvestment, has granted VRS to 177 of its employees. Out of 207 applications for VRS 13 were rejected and 17 others withdrew from the scheme. The total outgoing compensation under the scheme works out to about Rs 14.35 crore. The SCI took this step in order to resize the organisation.

1st quarter loss makes SCI bidders go for third round of due diligence Following a loss of Rs 6.0 crore reported in the first quarter of the current financial year, the disinvestments ministry is reportedly considering for a third and final round of due diligence for the bidders of Shipping Corporation of India (SCI). The fall in the freight rates in the international market had caused SCI to face a loss of Rs 6.0 crore in the first quarter as against a profit of Rs 112.0 crore during the same quarter last fiscal. The disinvestment ministry has also stated that there would not be any reserve price for the SCI and that the highest bidder would take over the company. The bidders have meanwhile, demanded for a shorter duration of 12 months from the strategic takeover for the sale of the remaining 26% stake held by government.

Shipping Ministry proposes new registry of ships The Shipping Ministry proposes to set up a second registry of ships in one of the newly set up special economic zones (SEZs), following a request to this effect by the Ministry of Commerce. The ships along with their seamen registered with this SEZ would be exempted from paying the domestic taxes. The tonnage tax for these ships also would be much lower than the corporate tax. Meanwhile, some of the shipping companies have already approached the Positra Special Economic Zone in Gujarat for details of facilities and tax incentives offered by the SEZ.

A.P. Moller doubles profits A. P. Moller's shipping operations has achieved an 100% increase in its after tax earnings. The group's liner shipping unit, Maersk Sealand, and Safamarine posted an profit after tax (PAT) of 2.98 billion Danish kroner for the first six months of 2002.

CP Ships adds four more vessels to its fleet CP Ships Ltd. has bought four ice-strengthened container ships for US$1.8 million. Of the four ships, two were earlier operating as part of the CP Ship fleet since 1996 under bare-boat-charter while the other two ships joined in 1998. The liner provides international container transportation services in Transatlantic, Australasian, Latin America and Asian regions.

Norasia to deploy its newly built box vessel "Englandina" The Englandina, newly constructed by the Norasian Lines has been deployed to the Chinese port of Chiwan. The container vessel has a capacity of 2,824TEUs and a speed of 24 knots.

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News on Shipyard

GMB to help in renovation of Alang ship-breaking yard The Gujarat Maritime Board (GMB) has decided to provide treatment, storage and disposal (TSD) facilities at the Alang Sosiya ship-breaking yard to minimize pollution from hazardous materials. GMB has invited bids for setting up the TSD facilities at the yard. The facilities are expected to be operational in a year. The GMB has decided to commission a detailed waste management plan for land filling, incineration, farming and other related activities. The board has also hired Engineers India Ltd (EIL) to identify problems related to the handling of hazardous materials, and assess the threat to environment.

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News on Ports

Kandla moots setting up a box terminal on BOT basis The Kandla Port Trust (KPT) has decided to float a tender for converting two of its existing berths into container terminals on a build-operate-transfer (BOT) basis. The successful bidder is expected to invest at least Rs 175 crore and also raise the container traffic to about 4.5 lakh TEUs by the end of the ninth year of operations. However the labour trustees on the KPT board are of the view that instead of offering the project to a private party, KPT itself could put up few more gantry cranes and improve the port's container handling performance.

KoPT takes measures to increase box traffic The Kolkata Port Trust (KoPT) has initiated measures to augment its container traffic. The port plans to achieve this by improving its cargo handling facilities and also by reducing the handling charges in the near future. As a part of tenth five year plan, the port wants to construct a breakwater and a gryone - a wall built out into the sea - at the Saugor Island near Bay of Bengal at an estimated cost of Rs 15 crore. These projects are expected to be completed by 2004-05.

New Mangalore port registers growth in traffic The New Mangalore Port Trust (NMPT) has registered more than 35% growth in the cargo volume handled from April-August this year, as compared to same period of the previous year. The port handled the highest number of vessels in August as compared to any other calendar month. The container traffic also rose during first five months of this year. The port has also started exporting large high speed diesel (HSD) parcels to Singapore.

Empty repositioning worries Paradip port authorities The National Aluminum Company (NALCO) not being able to match its container requirement from the available empty boxes at the Paradip port is causing worries to port administration. The empties of the shipping lines bringing CARE products from the US are supposed to carry cargo heading back to US only. So Nalco, which has its export containers, destined for the South East countries cannot make use of these empties. A Singapore based Shipping Line, presently carries Nalco's containers from Paradip, by repositioning the empties from other Indian ports. This is however, a costly process, involving additional cost of US$10.0 per TEU. With Nalco contemplating shift of its shipments to some other port, preferably Vizag where a new container terminal is under anvil, the Paradip Port is concerned about losing its container traffic.

Tuticorin port calls off JV with PSA for second box terminal The joint venture for construction of second container terminal for the Tuticorin Port Trust (TPT) with PSA has been called off, as PSA was unable to give a firm undertaking on investing Rs 850.0 crore. The port is now exploring possibilities of raising finances from domestic and financial institutions.

MbPT berths a 93-ft box vessel The Mumbai Port Trust (MbPT) has berthed the 93-ft m. v. Orient Strength container vessel successfully, despite port's lock having a width of only 100ft. Physical restrictions in the Mumbai port have so far been forcing such vessels to seek berths in the west coast.

Tata Power seeks reduction in annual royalty from MbPT The Tata Power Company (TPC) involved in developing the Rs 200 crore Pir Pau jetty on a BOOT basis, has sought reduction in the annual royalty to be paid for the project from third year of its completion. The TPT's request has been made in view of the change in the cargo mix from LPG to coal and liquid fuels. However, port privatization norms may not allow for any reduction of rate, as it would only be possible, if the board of trustees of MbPT decide to retender the project.

Cochin port to float new tenders for Vallarpadam project The Board of Trustees of Cochin port Trust (CoPT) has decided to float new tenders for the Vallarpadam Container Transshipment Terminal project. The decision follows detailed deliberations on various contentious issues.

TAMP rejects P&O's plea The Tariff Authority for Major Ports (TAMP) has rejected P&O's request for a further increase in tariff at the Chennai Container Terminal (CCTL). The P&O wanted royalty to be included as a part of the cost calculation which TAMP was unwilling to do as royalty formed a significant one third share in the proposed tariffs.

Port workers call for strike The federations of port and dockworkers have called for a joint strike, if the productivity-linked incentives (PLIs) were not paid for 2001-02. Earlier, an agreement over the workers eligibility was reached between the port management and the workers federation. However despite repeated attempts, no solution has been reached at and as a result the Indian Ports Association (IPA) kept dragging the issue and denying the PLI.

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News on Logistics

SICAL to concentrate on logistics and port related activities The South India Corporation (Agencies) Ltd (SICAL) has decided to focus on its logistics and port related activities. The logistics operations of the company currently contribute about 63% of SICAL's turnover. The company has also built a floating dry dock, with capacity to lift vessels of weight up to 500 tons in weight. The company is looking at opportunities in repairing of naval vessels, coast guard and other private ships.

Concor expands its business to coastal shipping Container Corporation of India (CONCOR) has entered the coastal shipping business by starting its first movement from Chennai to Chittagong on the east coast. Through coastal shipping, plans to connect the inland container depots (ICDs) in the South to the hinterland in the East. The new service would also help shippers in the North and West to send boxes to the South- East Asian countries and Europe. The coastal service is expected to consolidate LCL (less than container load) cargo in any of the ICDs, load them in its boxes and move them by train to Chennai, enroute to Singapore or Port Klang. Concor aims at expanding its business to compliment its position as a multi model logistics service provider.

A new Columbo-Haldia link Sea Services operating between Chennai and Columbo has extended its services with a new feeder service to link Kolkata/Haldia and Colombo. With already X-press Container Line and Bengal Tiger Line providing three feeder vessels to Colombo from Kolkata/Haldia, the new service of Sea Services is likely to intensify competition. Bangladesh's HRC Shipping also provides a similar service but is restricted to one call in a month.

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