Week ending June 21, 2003

News on Shipping

Indian Steamship to acquire Aframax carrier : India Steamship Company (ISS) is considering a proposal to acquire a Aframax type crude-cum-fuel oil carrier with a capacity of 90,000 to 100,000 dwt. The company had recently acquired a similar 15-year old tanker of 89,960 dwt capacity costing $13 million. ISS was also earlier reported to be planning to charter hire five specialized carriers, including one gas carrier and four chemical carriers - to transport ammonia and phosphoric acid for two of the Birla group companies. However, it is yet to act on its plans, as it is still to assess demand, which is linked to expansion plans of group companies.

Norsia-MOL to launch direct service to West Asia and Europe : Norsia Container Lines along with MOL will be launching a new direct dedicated service between the Indian sub-continent and West Asia Gulf and Europe. The proposed service will commence from Karachi port, the route being Nhava Sheva International Container Terminal (NSICT), Columbo-Felixstowe-Roterdam-Hamburg-Jebel Ali-Karachi. The service will have a fast transit time -18 days from Nhava Sheva to Felixstowe, 20 days to Hamburg and 22 days to Rotterdam. In all, six vessels of 1,800 TEUs each will be deployed as a part of the service- five of them by Norsia and one by MOL.

GE Shipping takes delivery of Aframax crude carrier : GE Shipping Co Ltd., has taken delivery of a newly built Aframax crude carrier - Jag Lata, a 1.05 lakh dwt crude carrier from Hyundai Samho Heavy Industries Co. Ltd., South Korea,. With this acquisition, the tanker tonnage of the company increased by 29 per cent and forms 78 per cent of its total shipping tonnage. GE's tanker fleet comprises of four crude carriers, 16 product carriers, aggregating to 1.17 million dwt, with the average age of vessels at 11.2 years.

News on Ports

Mormugao plans for a cruise vessel-cum box terminal : Mormugao Port Trust (MPT) has floated a tender for short-listing bidders for undertaking a feasibility study for the proposed construction of a cruise vessel-cum-container berth. The proposed study would inter alia examine the opportunities for developing a cruise terminal at Murmugao port to carry out traffic forecast for container cargo through Mormugao port, estimate scale of additional facilities that need to be established and assess investments required for the purpose and other technical and engineering aspects of setting up the facility.

Vizag port introduces volume discount scheme : Vishakapatanam port, is introducing a volume discount scheme with effect from April 1, to attract more cargo. The Tariff Authority for Major Ports has already approved the scheme, under which an importer/exporter who had handled a minimum of 50,000 tonnes of dry cargo or 10,000 tonnes of cargo in the immediate preceding financial year would qualify for the volume discount scheme. The average cargo-wise throughput achieved by importer/exporter during preceding two years will be the benchmark. The port trust will give a discount on wharfage of 10 per cent, if an importer/exporter gives a cargo throughput, which is above 110 per cent and up to 120 per cent of the stipulated benchmark.

CPT signs MoU with CPCL : The Chennai Port Trust (CPT) has signed a 30-year memorandum of understanding (MoU) with Chennai Petrochemical Corporation Ltd., (CPCL) which provides for the port to handle latter's crude oil cargo. Under MoU, Chennai port will handle CPCL's existing and expanded refining capacity at concessional wharfage charges. The CPCL has assured a minimum traffic of seven million tonnes per annum in 2003-04, eight million tonnes in 2004-05 and 8.5 million tonnes from 2005-06 onwards.

News on Logistics

CCTL & Concor to reduce terminal handling costs : The Chennai Container Terminal Ltd. (CCTL) and Container Corporation of India (Concor) have in a joint move reduced some of the terminal costs in Chennai container terminal by Rs. 1,690 per TEU. Under the proposed move, Concor would reduce its rail freight between Chennai harbour and Tughlakabad ICD by Rs. 2,550 per TEU to Rs. 19,300 and by Rs.5,400 to Rs.38,300 per TEU. Following reduction in rates the overall cost to a shipping line is expected to come down by Rs.4,240 to Rs.22,695 and Rs.6,266 for a FEU to Rs.43,915. The CCTL has waived Rs.1050 per TEU and Rs.1575 per FEU as container yard charges, while Concor has reduced its charge at the port by Rs.640 to Rs. 1196 per TEU and Rs.1280 to Rs.2317 per FEU. The reduced rates are expected to make movement of boxes between North India and Chennai port more competitive. Currently, rail freight differential between Chennai-Tughalakabad and Mumbai-Tughalakabad is Rs.7,111 per TEU, will now be reduced by Rs.4,240.

Concor reports robust performance : Container Corporation of India (Concor) has reported a robust financial performance for the fiscal 2002-03, with revenues in the region of Rs. 1480 crore (Rs. 1286 crore in fiscal '02) with after tax profits of Rs. 277 crore (Rs. 249 crore in fiscal '02). Consequently, the EPS has been higher at Rs.43 against previous year's Rs.38. Following results; Concor has hiked dividend payout by 20 per cent to Rs 12 per share against previous year's Rs.10 per share. Improved financial performance has also helped boost up cash reserves of the company, exceeding Rs. 500 crore, further slated to go up to Rs.730 crore by fiscal '05. The Concor's performance comes surf-riding on a CAGR of 15 per cent in containerized traffic during 1994-2003, outpacing 6 per cent CAGR growth in overall port traffic in the same period.

Ennore Expressway project gets underway : National Highway Authority of India (NHAI) and Tamil Nadu Road Development Company Ltd., (TNRDC), the latter a 50:50 joint venture between ILFS and Tamil Nadu Industrial Development Corporation (TIDC), have signed a MoU for expediting the work on the Ennore Expressway project linking Chennai with Ennore. The project, which covers a number of measures aimed at protecting the existing road from sea erosion, resettling and rehabilitating about 2,000 fishermen's families and then widening and improving the roads, including the Ennore Expressway is estimated to cost about Rs. 150 crore. The NHAI had earlier floated a special purpose vehicle (SPV) - Chennai Ennore Port Road Connectivity Ltd., for the project, which will now be restructured to include Tamil Nadu government and Chennai Port Trust (CPT). A major stretch of the Ennore Expressway has been affected by sea erosion and various measures taken over the last few years have not yielded any permanent solution to the problem.