Maritime Cess proposed for Sagar Mala Project funding

The Government plans to impose a Rs. 50 cess per tonne of cargo for part funding the Sagar Mala project. The whole fund will be accumulated by the finance ministry and credited to Consolidated Fund of India. This cess is expected to make the Government richer by at least Rs.1,567 crores. This type of cess was necessary for the Government to levy because within three months of its commencement, Sagar Mala Project expenses have increased by 10% already. The Government has proposed an investment of Rs.55,000 crores in the port sector in a bid to enhance capacity, efficiency and connectivity at ports.

New Ports in the offing

With a proposed investment of 15,000 crores, the Government is coming up with two new major and 50 minor ports along the Indian coastline. The only condition underlining this proposal is that the ports be built at such laces where there is a natural draft of 6 – 8 metres. It has also been made mandatory that 75 Kms will be the maximum distance between two ports. The capacity of the major ports will be kept in excess of 30% of the projected traffic at these projects.

Port policies to be put in place soon

Government has taken up a host of measures to revamp the already existing ports by coming up with either new policies or altering the old policies for better. The major ones include policy of Single Point Moorings (SPM’s), raising the ceiling on financial assistance, spending on upgradation and modernization and to set up cruise terminals at five ports. A total of Rs.4,000 crores will be spent for five new SPM’s and the financial assistance is being provided to states for spending on feasibility and environmental issues.

GE shipping expands fleet

Adding one more feather in its cap, GE Shipping has bought another crude carrier from Aframax of 1,07,592 DWT. The estimated cost of this carrier is $11 million. It should be noted that GE already has 7 carriers of Aframax, which is now likely to be 39% of the total tanker tonnage of GE. The company has earmarked a sum of Rs.1,050 crores for various activities relating to modernization. The other tankers in the offing for GE include 2 Suezmax tankers and four anchor handling tug supply vessels.

Azhikkal and Alapuzha ports to be developed soon

3 foreign and 1 Indian company have expressed their interest for development of Azhikkal port. The foreign companies are Universal Lubricants (Sharjah), Antara Koh (Singapore) and Lagan Holdings Ltd. (Ireland). Chandragiri Constructions is the only Indian Company in the scene. As far as Alapuzha port is concerned the only company to have shown interest is a Malaysia based company Trans Resources Corporation.
The other two ports in the pipeline in Kerala include Vizhinjam and Beypore Port which will also be starting sometime soon.

Regulation of private agencies in ports contemplated

In the wake of the fact that various private agencies like shipping agents, freight forwarders, consolidators and stevedores have taken a free hand in handling activities to the detriment of shippers on both export and import front there has been a move towards regulation of these players. The areas of concern are currency conversion rates being offered being higher than RBI notifications, levies of various types and multiple party payments for delivery orders. However, the Shipping Ministry is encountering opposition and a petition against the move has already been filed with the High Court.

Small ports to be preferred over major ports

Mr. Michael Pinto, formerly the secretary, Ministry of Shipping, has suggested that smaller ports are more viable than major ports that result in high costs and are not as environment friendly. Speaking at a conference in Udipi he cited the example of Kerala where it takes about Rs 3000 crore to make a major port and only Rs 20 crore to make a small one.

Costal shipping to be integrated with the transport system

Mr.T.S.Ashok Kumar, Director, National Institute of Port Management has stated that coastal shipping should be called coastal trade and be integrated with the rest of the transport system. The development and maintenance of coastal links is much cheaper than road and rail he pointed out. However, he pointed that out that there was a need to provide incentives for finance development.

DHL Danzas Lemuir proposes consolidation of ‘less than container load’

DHL Danzas Lemuir, which is a joint venture of DHL Danzas Air & Ocean, DHL and Lemuir Group has expressed that they would like to consolidate ‘less than container’ (LCL) cargo for shipments to the Europe and the US at the Kolkata port. As against Mumbai and Chennai ports which are appropriately serviced by inland container depots at Bangalore and Tughlakabad, Kolkata has sailings to Singapore which is a costly centre and sailings to Colombo account for only about one sailing a week.

JNPT wants a larger pie of revenue and not weighted values

Jawaharlal Nehru Port Trust (JNPT) has scrapped the weightage formula for arriving at the right bid price for developing the third container terminal at JNPT. The bid would have given 40% weight to technical strength and 60% to the price offered. However, the Board of Trustees of JNPT has now decided to rate the bids according to the highest quantum of revenue share offered. Another important clause of the deal is that the private operator will have to bear 50% of the revenue gap as penalty in case of deficiency in terms of minimum guaranteed throughput.

Record increase in Shipping Freight likely to affect Consumer Prices

The recent increase in shipping freight rates especially those in dry bulk shipping, which are at their peak in last 30 years is likely to pass on to consumers in the form of increased consumer prices. Increasing demand from China of basic raw materials for building infrastructure, supporting its manufacturing sector and to fulfill its domestic demand is the major force behind this surge and has led to the shortage of ships on other routes. This record increase in freight rates which has resulted in Baltic Dry Freight Index to more then treble since Jan2003, is likely to result in increase of price of goods made from iron, aluminum and other metals, and on food products derived from livestock that feed on soybean, grains and corn apart from other bulkier goods like textiles. The price of these goods may rise up to 3% in the next year due to increase in freight rates as producers are already bearing the brunt of rising commodity prices. Though only 40% of goods are transported in ships hired on the spot but this recent increase is going to affect the time charter rates, which are up for revision, thus resulting in price increase for all commodities across board.




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