Week ending January 21, 2003


News on Shipping

GE Shipping plans investments in offshore business Great Eastern Shipping Co. Ltd., which recently withdrew from bidding for Shipping Corporation of India (SCI), is now reportedly planning investments in offshore support services. Confirming this at a press briefing in connection with the company's third quarter (Q3) results, Mr. Bharat Shah, Managing Director, GE Shipping has said that proposed investments would cover both the shipping and offshore businesses. GE Shipping's interest offshore is inspired by discovery of sizable natural gas on the Indian east coast by Reliance. The gas find enhances the long-term attraction for the offshore support business, in which GE Shipping is a leading domestic player. As per the results for the third quarter of 2002-03, GE Shipping has reported a 32.3 per cent dip in net profit to Rs 47.74 crore (Rs 70.51 crore for year ago period). The total income was down to Rs. 240.91 crore against Rs 293.67 crore in the same period last year.

Panel on tonnage tax constituted The Government has set up a tonnage tax panel for working out modalities of introduction of tonnage tax for the shipping industry. The panel comprises representatives from the ministries of shipping, finance and the shipping industry. The constitution of the panel follows a " favorable view " taken by the Cabinet Committee on Security (CCS) on tonnage tax during a meeting held in Delhi on November 21, 2002. With the aim of increasing national tonnage from a national security perspective, the CCS had favored the introduction of a tonnage-based tax regime for Indian shipping. It had also directed the ministries of shipping and finance to work out the finer details of the tonnage tax for introduction in the Union Budget. The terms of reference of the panel includes working out the modalities as well as framing a draft legislation to govern the tonnage tax structure, as followed in the UK. The panel on tonnage tax comprises two representatives each from the Ministries of Shipping, Finance and the Indian National Shipowners Association (INSA).

Essar Shipping Q3 net up 13 pc Essar Shipping Ltd. has reported a 13 per cent increase in net profit at Rs 16.36 crore for the third quarter of 2002-03, as against Rs 14.51 crore in the year-ago period. Net sales edged up to Rs 122.40 crore (Rs 117.37 crore). Total income was Rs 122.86 crore (Rs 118.86 crore). Interest cost was Rs 12.93 crore (Rs 12.23 crore). The company said the Suezmax freight rates increased from $ 27,000 per vessel per day in November 2002 to $ 37,000 per vessel per day by mid-December. In the Capsize market, the freight rates for a one-year TC increased from $ 9,000 per day per vessel to $ 12,250 per day per vessel in December end. The Handymax freight rates increased from $ 7700 per day per vessel in October to $ 9000 by December.

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News on Ports

KPMG to take up study on creation of a new maritime authority The government has appointed KPMG as the consultant, to examine whole gamut of issues relating to plan for a Maritime Authority of India (MAI). KPMG was selected out of eight firms that responded to tender floated for the purpose. As per the terms, KPMG has to submit its report within six months. The selection was finalised by a committee headed by Capt. S.S. Naphade, nautical adviser to the Union Government. The other members of the committee included representatives from the Ministry of Shipping, Ports, Directorate-General of Lighthouses and Lightships and Directorate-General of Shipping. The committee was constituted by the Shipping Ministry sometime ago at the insistence of the Planning Commission, which felt that various activities on the country's maritime front should be brought under one umbrella. The purpose of constituting the MAI will be to bring all these organisations under a single umbrella and frame suitable legislation. The Ministry for Shipping has also recently invited bids to appoint consultant to undertake a study on development of coastal shipping and minor ports.

Panalpina plans entry into customs house services Panalpina World Transport (India) Pvt. Ltd is planning to launch customs house agency (CHA) services, with a view to improve efficiency by reducing transaction cost and improved delivery system. Currently, the company is offering the CHA services through a sub-contracting arrangement.

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