Week ending January 27, 2003


News on Shipping

P&O seeks parity in vessel charges with Tuticorin P&O Ports, which operates the Chennai Container Terminal, has reportedly sought the assistance of Chennai Port Trust (CPT) authorities to meet its contractual obligations for bringing in mainline vessels to the container terminal within the three-year deadline set by the Union Government. Piqued at the slow pace at which the Port Trust is tackling outstanding issues, P&O Ports has urged port authority to resolve issues expeditiously so that it can market the port. P&O wants the Port Trust to declare a flat vessel-related charge for mainline vessels, on par with Colombo and Tuticorin ports. It wants this charge to be on par with Tuticorin Port Trust, which charges flat rate of $15,000 per call for mainline vessels. The container terminal at Tuticorin is operated by Sical-PSA combine. The P&O also wants improvements in rail connectivity of the port, especially lowering of the Concor rates, which it says is exorbitant.

Chemplast set to demerge shipping Chemplast Sanmar Ltd. has informed the Bombay Stock Exchange (BSE) that it intends to "consider a scheme to demerge the shipping business of the company". Chemplast Sanmar holds 50 per cent of the equity of Sanmar Shipping Ltd, which was created a couple of years ago by hiving off the shipping division of Chemplast. This 50 per cent stake is held through Polygon Holdings Ltd, a wholly owned subsidiary of Chemplast.

US Customs 24-hour rule from February 2 The World Shipping Council has strongly recommended that all carriers, shippers and marine terminals handling US-bound cargoes should be prepared for the enforcement of the US Customs Service 24-hour rule, which comes into effect on February 2. The council has noted that the penalties for non-compliance could be heavy. The mandatory items the US Customs will be looking for when shippers submit manifests include proper cargo descriptions as opposed to previously acceptable "said to contain" or "consolidated shipment". Most important, the declarations must be filed 24 hours before a US-bound ship is loaded prior to departing from a non-US port. The council has reminded NVOCCs that they must file cargo manifests by becoming Automated Manifest Members themselves or filing directly with US Customs. While seeking greater clarity on certain aspects of the 24-hour rule in the coming weeks, the council has urged the US Customs not to penalise parties, who are seriously trying to comply with the new rules but are unable to do so due to genuine reasons.

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News on Ports

Vizag port may review oil transshipment rates The Visakhapatnam Port Trust (VPT) is considering a proposal for reviewing the wharfage on transshipment of oil traffic. The review has become necessary in view of the partial shifting of the traffic to the neighboring Kakinada port as well as Kolkata port, which has started handling huge crude carriers, including ultra large crude carriers (ULCCs), at the Sandheads for transshipment to various ports. In 2001-02, VPT handled 18 million tonnes of oil traffic, 50 per cent of which was for transshipment, mainly for Haldia. If the present trend is any indication, the port's total transshipment oil traffic in 2002-03 might not exceed 7.5 million tonnes, or an estimated shortfall of 1.5 mt compared to last year. Till now, the throughput has been 6.5 mt. VPT has taken up the matter with the Indian Oil Corporation (IOC), promising matching rates.

Paradip seeks to handle coal for TNEB With improved productivity in its mechanized coal handling facility, the Paradip Port Trust (PPT) is considering reviving its demand for diverting the entire thermal coal traffic to Paradip port, currently being handled by the Visakhapatnam port for the Tamil Nadu Electricity Board (TNEB). Visakhapatnam port currently handles an estimated two-lakh tonnes of thermal coal a month for TNEB. PPT had earlier urged the Centre to initiate measures for such diversion as a means to better capacity utilisation of the mechanized coal facility built at a huge investment with part funding by the Asian Development Bank (ADB). The coal handling at the port has capacity for handling 20 million tonnes annually or roughly 1.7 million tonnes a month equivalent of 17 rakes a day on an average. However, the average throughput of the plant till recently was a meagre six rakes a day or roughly six lakh tonnes a month, sometimes even less.

Mandatory registration for agents recruiting Indian seamen The government has made it mandatory for all agents involved in the recruitment of Indian seamen to register with Director General of Shipping in a bid to prevent exploitation of seamen by fly-by-night agents. The agents will have to pay a registration fee and will have to fulfill certain conditions. The new measure follows an amendment to the Merchant Shipping Act. India is a major market for supply of trained seamen and over 16,000 seamen (ratings) and 7,000 officers from India are presently employed on foreign ships. The regulation is mainly to curb illegal operators and which in turn will help genuine operators do their business better. Recruitment agencies are regulated in other countries such as the Philippines, which is another major market for seafarers.

Kochi 3Q cargo handling up by 14 pc The Kochi port's cargo handling in the third quarter of the fiscal has gone up to 9.8 million tonnes from 8.6 million tonnes in the same period last year up 13.93 per cent. Coal imports through the port had more than doubled, notching up 1,48,796 tonnes (62,455 tonnes). The port handled 5.9 million tonnes of crude during the period under review, recording a growth of 0.9 million tonnes.

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JNP awaiting environmental nod for dredging work The Jawaharlal Nehru Port Trust (JNPT) is preparing to start work on the massive dredging scheme involving removal of about 40 million cubic metres of material at an estimated investment of more than Rs. 700 crore in 2003-04. A spokesperson for the port is quoted as saying that port was only waiting for the environmental clearance of the project to start work. The dredging project is expected to increase the draught in the dock basin to 13.5 metres from the present 12.5 metres, which will facilitate the movement of mainline container vessels through the port.

Sea King to bid for JNPT box terminal Sea King Infrastructure Ltd, promoters of Gujarat Pipavav Port Ltd (GPPL) and a special economic zone (SEZ) in Maharashtra, will bid for the new box terminal facility proposed to be developed by the Union Government at Jawaharlal Nehru Port Trust (JNPT). The company plans to bid for the JNPT project in partnership with the US-based engineering major, Parsons Brinckerhoff. About eight bidders are believed to have submitted their request for qualification (RFQ) documents by the deadline set by the JNPT for January 15. These include CSX Corporation, AP Moeller Group, PSA Corporation, Dubai Ports Authority, Hutchison Port Holdings-West Port of Malaysia and Evergreen-Marubeni-JM Baxi consortium. The SEZ, proposed by Sea King was originally planned at Positra in Gujarat but has been now shifted to a site close to Raigad district in Maharashtra, for which the promoters have received requisite approvals from the Union and the State Governments.

MMB not to dredge in state minor ports The Maharashtra Maritime Board (MMB) has decided not to take up any further investments in dredging of minor ports in the State. The board has decided that henceforth, the cost of dredging will have to be borne by the promoters of the ports themselves under Build-Own-Operate-Share and Transfer (BOOST) model of contracts. The MMB stance is likely to impact two private promoters of two minor ports - Rewas-Aware and Dighi port in the State, who will now be required to mobilize the required funds themselves to undertake necessary dredging. Earlier, MMB had spent nearly Rs 13 crore to dredge 18 lakh cum at Dharamtar, a minor port used by several private firms.

P&O Ports (Australia) petition for JNPT terminal dismissed Mumbai High Court has dismissed the petition filed by P&O Ports (Australia) challenging the Jawaharlal Nehru Port Trust (JNPT)'s decision not to allow it to bid for the second container terminal at the port. The JN PT had debarred P&O from bidding for the new terminal because it already operates a terminal at the port, and handles over 40 per cent of the total container traffic. The decision was based on the general policy that disinvestments or privatisation should not result in creation of private monopoly in the port services sector. The court is yet to give its written order. The court has reportedly taken the view that it does not have jurisdiction to adjudicate over the Central government's decision, as the Government is entitled to frame its policy. P&O Ports is however, preparing to file an appeal before the Supreme Court. P&O Ports in its petition had alleged that discrimination under Article 14 of the Constitution and the ban was an infringement of its right to carry on business under Article 19 of the Constitution.

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MoD clears objections to the Vallarpadam project The Ministry of Defence (MoD) has reportedly cleared its objections to the Vallarpadam Container Transshipment Terminal to be set up besides the Cochin Port. In a statement, Dr. Jacob Thomas, chairman of Cochin Port Trust (CPT) has said that MoD clearance will enable the new terminal to erect the latest of the new generation super post Panamax cranes at the site and enable quick and efficient handling of bulk-sized cargo and equipment. To suit the changing requirements of the world-class transshipment terminal, the clearance will also enable it to erect cranes of 120-metre height as the needs and requirements of the international bulk shipping community change. The Indian Navy had raised concerns over the erection of tall cranes in the vicinity of the Cochin Naval Base, pointing out that it could prove a hindrance to the landing and take-off of naval aircrafts. The issue had to be subsequently sorted out between the Ministry of Defense and Surface Transport in New Delhi.

News on Shipyard


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