MARITIME NEWSLETTER FOR THE WEEK ENDED NOVEMBER 01, 2003

   

Stringent regulations for Indian Marine Products Export

After rejecting about Rs.50 crore worth of products last year, European union has once again decided to revise its rules and regulations on Marine Products exports. The earlier checks on deductible limit were based on parts per million which will now be changed to parts per billion. Checks have already been made in Kochi, Nellore, Bangalore, Lucknow, Jaipur and Hyderabad and the major contaminants identified include physical, chemical, microbial and pesticides in the edible products. Things have gone so bad that the teams from EU are also looking into nature of feed, source of water, type of plant and status of various farms.

CPSA holds rally demanding port development

In a bid to invite management’s attention towards port development, Cochin Port Staff Association (CPSA) held a rally in the port premises and also served a strike notice to the management. The trade Union demanded speedy implementation of Vallarpadam container transshipment terminal project. It was also alleged that efforts were not also taken for development of port’s infrastructure which included procurement of additional equipment for Rajiv Gandhi Container Terminal.
It may be noted that as the dredging costs have increased over the years causing low draught in the channel, there is a fear of terminal operations coming to an abstract halt.

New Fiscal and Policy initiatives for coastal shipping

In a bid to give a boost to coastal shipping in India, the shipping ministry has proposed a Coastal Shipping Development Financial Agency to be made. This request has been added to the draft seeking the approval of Sagarmala Project, which will shortly be submitted to Cabinet Committee on Economic Affairs.
The various demands being made include Infrastructure status, introduction and levy of tonnage tax, 50% depreciation for coastal vessels, duty free supply of bunker to coastal shipsamong others. The number of existing coastal ships stands at 425 and another 100 new ships are likely to be introduced.

Shipping companies make merry on the stock exchange

There has been a tremendous improvement in recent years on the shipping scrips, which had by now been a neglected lot among buyers. This was very evident when GE Shipping touched a new 52-week high of Rs.99 in fag end of October. GE Shipping announced a jump of 41 % in its net profit while SCI recorded a 4% rise in its net profit. Essar Shipping recorded a 196% rise in its net profit and even Varun Shipping recorded an increase of 391% over its corresponding period last year.
The main reasons cited for the happy state of affairs include growing demand from China, Japan and India which have stabilized dry bulk trade. The stock prices are also responding to the industry’s expectations of increased tanker charter rates.

‘Cruism’ Culture to hit India soon

With a worldwide revenue of $14billion and a growth rate of 80% annually, the cruism industry has been spotted as a thrust area by the Government of India. To offer cruise tourism, the Shipping Ministry alongwith the Deapartment of Culture are considering creation of a cruise circuit of % ports. These will include Tuticorn Port on the East coast and Mumbai Port, Mummagoa Port, New Mangalore Port and Kochi Port on the West coast. The funding of infrastructure at ports will be shared by the Tourism Department as well. With more and more Indians opting for leisure cruises abroad and India itself being ranked as seventh most preferred tourist place, this step will go a long way in adding something extra to the Indian Economy.

TAMP comes down heavily on Ports’ Working Capital

The major arms of working capital include stores inventory, sundry debtors and cash & bank balances. The Tariff Authority for Major Ports (TAMP) has proposed major revamping of the norms relating to all the three wings of working capital, in accordance with Crisil recommendations.
With respect to inventory, which is reported to be very high in many major ports, TAMP has advised the ports to restrict the inventories to one year,s average issues. This is because excessive inventory is taken as a part of capital employed and hence acts against the inventory control theory. The Crisil recommendation for the same is 6 Months.
In case of Sundry Debtors, which is also high in many ports, Crisil has recommended a 30-day operating income as limit. For Bank Balances the limit is set to 30 days cash operating expenses.

JNPT becoming a serious choke point

Shipping lines sought government intervention after a letter from Container Shipping Lines Association (CSLA) stating the port’s inability to cope up with the rapidly growing container throughput. Earlier this month four labour strikes at this port have further deteriorated the condition of the port that is already plying on inadequate infrastructure.
CSLA has recommended 4 point measure for solving this problem and they include giving more autonomy to the port in terms of operational decisions, providing infrastructural facilities, allowing terminals to plan their future spends and ensuring co-operation between various agencies and the port.

SCI denies all controversies

High officials at SCI have confirmed that they have no issues regarding any of the three bidders that are still in line for the disinvestment of their company. The officials were however feeling betrayed by the Government in holding up the process for quite some time now.
However, according to officials at Essar Shipping Government would take up the issue to Supreme Court by Mid-November. It should be noted that till then the petition revolving Jessop & Co. is also likely to be disposed by that time.

Indian tonnage taxation rules to go UK way

For the last two years now, INSA has been continually working and re-working the solution to India’s tonnage tax regime problem. The Finance Ministry has come up with a bill modeled along the UK Act. The six member panel, however have changed the rules as and when the need arose to suit the local shipping conditions.

 

 

 

 
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