MARITIME NEWSLETTER FOR THE WEEK ENDED OCTOBER 11, 2003

   

Railways ministry to be the only operator of container trains.

The Railways Ministry has decided to retain its monopoly in carrying of container cargo by train. After getting a lukewarm response from private organizations such as Central warehousing Corporation and Pipavav Rail Coporation Ltd.to enter the fray it was decided that the Container Corporation of India Ltd. (a Railways Ministry subsidiary) should be the only entity to conduct the business. Pipavav Rail Corporation Ltd. did not follow up its initial interest with a detailed proposal.

SCI faces employee opposition to privatization

After BPCL and HPCL it is now Shipping Corporation of India (SCI) that is facing employee wrath to privatization. The SCI union has now moved the court to halt the privatization process. It is to be noted that since SCI is also a part of legislation the process has to be approved of by the parliament. Response to the development is now awaited from the ministry of disinvestment.
SCI was formed in 1961 by the merger Western Shipping Corporation and Eastern Shipping Corporation. Jayanti Shipping Co.(JSC) and Mogul Lind Ltd. were also included into the fold in 1971 and 1986 respectively.

India to get more aggressive in the maritime sector.

Speaking at the maritime expo 2003 the Union Minister of State for Shipping, Mr. Dilip Gandhi, expressed that India will try to gain one percent of the global trade by 2007 from its present 0.70 percent. He also mentioned that the Sagar Mala project announced on the Independence day will give a major impetus to foreign trade, coastal shipping, shipbuilding and other maritime activities. It was also announced that Goa, Kochi, Mumbai and Tuticorin ports would now be equipped with more facilities to boost tourism.

Vallarpadam Terminal Proposal to be revised

The Rs 2000-crore project is yet to take off after being on the anvil for two decades and a revision is now being made in the Vallarpadam Terminal proposal. The shipping ministry has indicated that the proposal may be implemented in a phased manner with the Rajiv Gandhi container terminal(RGCT) being revamped by a private player and subsequent development of Vallarpadam island as another terminal. It will be decided if the private player developing the RGCT will be obligated to develop the Vallarpadam island. If feasibility permits the Vallarpadam may be severed from the operators of RGCT at a later date.
The bidders,CSX World Terminals and Maersk, shortlisted from amongst others have not materialized a proposal. They wanted the operational period to be raised to 50 years from the proposed 30 for the new terminal and for the RGCT to be raised to 10 from 5. The ministry had also urged the government to fund road and railway links and arrange for dredging under the viability gap model. The package offered would require the bidder to operate RGCT for five years and construct the new terminal at Vallarpadam. The new terminal will handle approximately 3.3-mn teus container traffic between 20-25th year of its operation.

Cross-subsidization in coasted shipping to be considered.

As against the Tarriff Authority for Major Ports(TAMP) view that cross-subsidation should be removed the Secretary of Ministry of Shipping, Mr.Joseph, has indicated that it may be implemented to boost coastal shipping. The point being made was that the coastal operations would not be viable for coastal vessels if they pay the same port charges as foreign vessels that can afford them on account of the expensive cargoes they carry.
The ministry feels that its coastal movement of 33-mn tonnes is much less than 800mn tonnes of China and apart from cross-subsidisation it is also trying to install a tonnage tax regime instead of the existing corporate tax system to give coastal shipping an impetus.

Exports through Kochi port up by 5,000 tonnes

As per the figures released by Cochin Chamber of Commerce and Industry the Kochi Port has exported goods of 41,328 tonnes in August compared to 36,311 tonnes in July.
Cotton goods, cashew, coir products, tea, spices, cashew etc. are some of the commodities that have seen a major rise in export.

‘Exchange collect’ to be offered to Indian shippers

United Parcel Service which has implemented ‘exchange collect’ in some European and Asian countries to expedite payments and curtail risk in global trade may soon introduce a similar tool in India which will reduce the 5-6 weeks payment period to shippers by the consignee to 7-10days. UPS will also introduce ‘import export collect’ to help Indian firms going for imports to re-export the goods. The financial services arm, UPS Capital Corporation, will also integrate supply chain management with supply chain financing and thus play the role of a banker.

Mumbai liquid bulk cargo plummets in the wake of octroi and stamp duty.

With a stamp duty of one percent on the landed value of cargo and the authorization to shipping agents to collect upto 0.025 percent as administration charges the Mumbai port is losing its traffic to Kandla, Mundra, Kakinada and Vishakhapatnam. Along with a stiff octroi duty of 7.5 percent the high stamp duty has resulted in the throughput of edible oil to plummet from 12 lakh tones in 1998-1999 to 4.81 in 200-2003.

Concor declares 110 percent dividend; turnover increases by 15 percent

Container Corporation of India Ltd.(Concor) has declared a dividend of 110 percent after registering a net profit of Rs 272.85 crore up 9 percent from Rs 1,483 crore for the previous year. Concor has a network of 51 container terminals out of which 4 were added in the current year.

SCI miscalculations lead to huge losses for FIIs and traders

After SCI declared a 170 percent dividend the FIIs and other leading brokers incurred huge losses as they failed to take note of SEBI’s regulation to adjust future prices at the ex-dividend rate in case of the dividend declared being more than 10 percent of market price. As a result the market sold SCI futures in large quantities and bought SCI stock in the cash segment whereas a profitable deal would have been to do the exact opposite.

JNPT operations dither on account of workers’ strike

About 200 contract transport workers called a strike demanding that they be provided jobs with the new companies. Workers belonged to Ornate Multimodal which is a transport service provider. The intra-port transportation of containers has been badly hit and it has been reported that the port management has asked for 2 weeks time to resolve the issue.

Cruise Liners attracted to Indian Ports

After being hit by September 11 the cruise liners have now seen a reinstatement of cruise liner traffic. 19 cruise liners have confirmed to call at Mumbai port so far and 15 would appear at Cochin and Tuticorn during 2003-2004. A committee formed to explore the potential of cruise liners chaired by Ms.Rani Jadhav, Mumbai port trust chairperson, has recommended that India be promoted as a cruise destination by putting Mumbai, Mangalore, Murmagoa, Cochin and Tuticorn in the world map.

Dredging Corporation of India IPO on the cards

The government is planning to offload 20 percent of its stake in its ‘mini ratna’ Dredging Corporation of India. Slated for January 2004 Kotak Mahindra and Enam are the merchant bankers who have been shortlisted for the task. DCI recorded its highest ever income of Rs 519.52 crore in 2002-2003 and is now considered to be well equipped to offer a wide range of dredging and related services to international clients.

 

 

 
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