News on Shipping

Amendments to Merchant Shipping Act passed : The amendments to Merchant Shipping Act to give effect to number of international conventions and protocols adopted by International Maritime Organization (IMO) has been approved by Rajya Sabha, the upper house of the Parliament. The Merchant Shipping (Amendment) Bill 2003 seeks to achieve complete elimination of pollution of the marine environment by oil and other harmful substances in accordance with the International Convention for Prevention of Pollution from Ships. It also seeks to minimize accidental discharge of such substances by prescribing a package of requirements of design, construction, survey and certification norms with respect to discharge of garbage and sewage into the sea.

SCI reports net profits of Rs 150. 25 crore : Shipping Corporation of India (SCI) has reported net profit of Rs 150.25 crore for the first quarter ended June 30 2003 in contrast to net loss of Rs. Rs 5.93 crore in the corresponding quarter of last year. Net sales in the last quarter grew by 49.1 per cent to Rs 780.41 crore from Rs. 523.32 crore in the same quarter last year. The improved profitability is attributed to optimum utilization of market opportunities that were available during first quarter of current year. The tanker division of the company has contributed 90 per cent of the profits during the quarter, mainly owing to spurt in tanker freight rates in the wake of hostilities in Persian Gulf. SCI had 50 per cent of its fleet during the period on various time charters, which resulted higher income realization. During the quarter, SCI also took delivery of two new built crude carriers (Aframax) of 2,27,894 dwt and has placed orders for two VLCCs of 3,16,000 dwt each, which are scheduled to be delivered over the next two financial years.

New DG Shipping guidelines on ship chartering : The new guidelines issued by the Director General of Shipping for in chartering of foreign vessels, especially tankers, into India. According to the new guidelines, the maximum age limit of tankers is fixed at 25 years, while any tankers above 20 years of age would require to be eligible to operate under the conditional assessment programme (CAP) rating of minimum 2. The European Union has already banned the entry of all single hulled ships into member countries with effect from September 2003. The new guidelines seek to avert the possibility of aged single hulled vessels from being therefore deployed in Indian waters by shipping lines. While International Association Independent Tanker Owners (Intertanko) has protested to Indian government about the new guidelines on restrictions on operating ageing vessels, the Indian Ship Owners Association as also Indian shippers have generally welcomed the new guidelines. Currently, 37 of the 89 oil tankers or 25 per cent of the tanker fleet under Indian flag are over 20 years old.

News on Shipyards

Bharti Shipyard Ltd. bags order from Qatar offshore firm : Bharti Shipyard Ltd, one of the leading private sector shipyards in the country has bagged a repeat order for a wireline support vessel fro Qatar-based Halul Offshore services. The shipyard, which is a Rs 100 crore company had earlier delivered a similar vessel to Halul in February 2003. The shipyard is a ISO-9001 certified company has constructed 52 tugs and offshore vessels in the last few years.

Hindustan Shipyard on a turnaround course : The Vishakapatanam-based Hindustan Shipyards Ltd. one of the leading shipbuilding yards in the country is slowly but steadily moving out of its troubled past and has for the financial year 2002-03 recorded a profit of 2.46 crore on a turnover of 155.43 crore as per provisional figures finalized by the company. The public sector shipyard has changed its strategy from large shipbuilding to ship repair and maintenance services, in an effort to cut down its losses. The company has increased its ship repair turnover from a meagre Rs 48 crore during 1997-98 to about Rs 109 crore in 1998-99 and sustained it around the same level in the last two years. HSL's shipbuilding has declined from 102.26 crore in 1999-00 to Rs 47.15 crore in 2002-03. The company posted a turnover of Rs 108.27 crore for the year 2002-03. The shift in focus from shipbuilding to ship repair has resulted in many advantages, mainly due to improved cash flows and lesser demands on working capital. Ship repair unlike shipbuilding also takes less time and thus payments come relatively faster and do not require long-period credit.

News on Ship Breaking

CEGAT ruling on import duty for ship breaking : A recent ruling by the Customs Excise & Gold (Control) Appellate Tribunal (CEGAT) has set to rest a long pending dispute whether duty is leviable for Indian-built ships in custom bonded warehouses and then brought to India for breaking. The ruling pertained to a case for claim of duty exemption made by M/s Mustan Teherbhai, who had brought MV Jagpriya for breaking. The exemption was claimed on the ground that the ship was built by Hindustan Shipyard Ltd. at Visakapatanam in 1975, which was declared as customs bonded warehouse. The vessels made there was thus, exempt from Customs duty. The ship "Jagapriya" was initially purchased by Dempo Steamships but later changed hands, when Mustan Teherbhai bought the ship for breaking. A bill of entry was made claiming exemption of duty but the Customs made provisional assessment for 5 per cent duty, following which Mustan Teherbhai went into an appeal at the Gujarat High Court. The case went up to the Supreme Court to be only referred back to the Mumbai High Court bench. The bench has found that while notification providing for exemption did exist, it also stipulated that when the ship would be finally broken up appropriate duty would be recovered from the owner.

News on Ports

Private port terminal performance shows improved productivity : The performance data compiled by Shipping ministry for the three container terminals being operated by private operators, mainly P&O Ports India at Nhava Sheva and Chennai and PSA-Sical combine at Tuticorin reveal that these private players have managed to achieve high productivity levels compared to the performance of public sector ports. The performance of NSICT in particular, shows the stark contrast in performance levels, with average turnaround time for a vessel to unload, pick cargo and leave the port at JNPT standing at 27 hours, while the same is achieved by NSICT in 17 hours, about 37 per cent less of time. The NSICT also scores over the JNPT in terms of the berth productivity, average pre-berthing time. The crane productivity, one of the crucial measure of efficiency in a container terminal, the NSICT has recorded a level of 26 moves per hour, while JNPT cranes operate at a level of 15 moves per hour. The Chennai container terminal has also achieved a steep 97 per cent reduction in average pre-berth waiting time in just one year of operations under P&O management.

News on Logistics

Railways plan to rope in new players for box movement : The Indian Railways is planning to rope in more players in the Rs. 4,000 crore container transport operations seeking to put an end to the era of monopoly by Container Corporation of India. Among those companies interested in entering the container transport operations through rail are Pipavav Rail Corporation Ltd. (PRCL), Central Warehousing Corporation (CWC), Continental Warehousing Corporation Ltd., and Associated Container Terminals Ltd. (ACTL), have been actively seeking to set up rail connectivity for their operations. The plan, when put through will enable private operators to set up rail lines from ports to the container warehouses. The new plan when implemented could also put an end the cost advantages currently enjoyed by CONCOR, which is a subsidiary of the Indian Railways, which owns 63 per cent of its equity. The cargoes handled by CONCOR enjoy 19 per cent discount on the normal railway freight charges. CONCOR currently has up to 95 per cent share of the railway movement of containers. CONCOR also has exclusive control over all scheduled operations from ports to its ICD locations.

CONCOR to new facilities at Nagpur ICD : Container Corporation of India (CONCOR) is planning to set up several new facilities at its Inland Container Depot (ICD) at Nagpur to help importers and exporters. According to CONCOR, Nagpur Container Terminal would be developed as a transshipment hub for cargo and would now incorporate facilities such as a public bonded warehousing facility, with weigh bridge, plant and quarantine department, forest station, a new security gate, a octroi check post and fire safety system. The proposed public bonded warehousing facility will allow importers to warehouse their cargo under Customs bonding and defer payment of duty till they take delivery of cargo. Some of the testing activities which had to be earlier taken up at Pune will now be provided by the ICD through its own forest station and public health laboratory, especially for food cargo, such as edible oils, pulses etc.

Cold storage chains planned to boost agro exports : Container Corporation of India (CONCOR) the single largest surface carrier of container cargo in India is planning to shortly open a chain of cold storages across the country in an effort to boost agricultural exports. India is the second largest produce of fruits and vegetables at 44 million tonnes and 88 million tones per annum respectively. However the current exports in these commodities is very low due to lack of adequate facilities to handle them. Poor storage and handling facilities have thus led to large-scale wastage. Concor plans to set up a chain of temperature controlled atmosphere stores. First such store would become operational in 2004. Concor will also put into operation refrigerated containers for transporting fruits and vegetables.

Railway Q1 freight earnings up: The Railways have earned Rs 6,512.04 crore by carrying 133.17 million tones of freight during the first quarter of the current fiscal year, about 1.94 per cent higher than what it earned in the corresponding quarter of the previous year. The freight load for the quarter exceeded the internal target of 130.1 million tonne higher than the freight load handled during April-June 2002. The first quarter earnings are 23.4 per cent of the budgeted target of Rs 27,850 crore for 2003-04. Coal transportation for thermal power plants was 44 per cent of the total earnings of the railways during the quarter. The total accrual from coal cargo at Rs 2,870.17 crore, was 5.50 per cent higher than the level in the corresponding period last year. Transportation of raw materials to steel plants and movement of finished products contributed Rs 588.69 crore or 9 per cent of total freight earnings in the quarter. Food grains and cement have also recorded some increase, while petroleum oil lubricants and fertilizer have seen a marginal dip. Rationalization of freight tariff in the Railway Budget of 2002 has helped overall improvement in railway freight traffic by 26 million tones.




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