MARITIME NEWSLETTER FOR THE WEEK ENDED SEPTEMBER 20, 2003

   

Bypass road the way to clear Petrapole

The petrapole and Benapole users show a hike in their demands for the bypass road outside the Bongaon. The problem of parking, as well truck congestion will also be solved. The Uttar Pradesh models are all ready with tricky solutions to enhance and ensure the speedy movement of the trucks. The pile of the export cargo trucks have led to the spill over to the border over road and also a level of stagnancy that has occur in exports. The other problem arising is also the cancellation of exporters. The alternative solution at this time can be the bypass roads that will take the straight land Customs station or Central warehousing corporation border.It is also essential to seek a permanent solution, which can help in the movement of the trucks within a period of 48 hours at the parking lots on the road of the Petra pole border when affected.

Hopes building by the Great Easter shipping company

GE is to acquire a second hand VLCC and also it is the first to possess the VLCC across the country. The SCI has placed order for two new VLCC and the delivery will be done after two years. However the delivery of the second hand VLCC ordered by the GE would take place by November 2003. The investment amount expected to be $51 million ($26 million for VLCC, 1990 Japanese built and $25 million for two Aframax tankers.) The company has invested Rs600 crore in fleet and has ordered for the new Fleet at an amount of Rs.800 crore.What builds up high hopes for the GE is its good deal, as more than 30% share of India's crude oil trading is by VLCC and for the crude imported in the country, also from the other domestic oil companies, which go in for bulk. This will give GE a major presence in transportation of crude oil.

On the other side the vessel being single hull may lead to a problem it being banned by many countries. To list, the companies that use VLCC are Reliance and Indian Oil Corporation. GE shipping had a contract with the Mangalore refineries and petrochemicals Ltd. for crude and also has its major share in transportation of petroleum products within the country.

The Azhikkal and Allapuzha ports

There have been four expression of interest received by the Directorate of ports for the growth of the Azhikkal port and one of them being for the Alappuzha port. The tenders received are from three foreign companies and the fourth being Chandragiri constructions in Kerala.Among the various Companies that have shown interest, the Sharjah company has shown interest on its own with an estimated cost of Rs1750 crore, featuring berthing and allied facilities and also oil jetty, dry rock and cruise liners being a part of it. The implementation of the project is a joint venture by the ICICI and Kerala Industrial infrastructure development Corporation.The port of Azhikkal is located between the Ports of Kochi and Mangalore and also aiding for the progress of Kasargod, kannur and Coorg.The Allapuzha project could only attract one EOI of Malaysia the estimated figure of the project being Rs250 crore. The project will also facilitate the development plans like yachting, boating, sailing and other sports. It also involves recreation and marina.

Kochi Container Terminal Bidders Set Terms

International Container Transshipment Terminal (ICTT) proposed by Cochin Port Trust appears to have once again run into troubled waters. Two companies bidding for ICTT, UK based CSX World Terminals and Copenhagen based Maersk put up the conditions to handle operations of the old terminal for 10 years, besides ensuring the road and rail links and completion of channel work before starting operations for setting up the terminal. Port Trust Chairman Thomas Jacob refused to comment on this and said the bids were being scrutinized and a decision on the matter would be taken at the board meeting scheduled for September 19.The pre-conditions put forward by the port when it invited bids included that the terminal built on a BOT basis would have to be handled over to the port after 30 years. The successful bidder would be given three-year term to operate the present Rajiv Gandhi terminal and another two years, by which time it would have to make the new terminal operational.Once the new terminal become operational, the promoter would move out and the port would handle operations at the old terminal. The promoter would be allowed to operate new terminal for 30 years and the share the revenue with the port. The port had not fixed any benchmark for this revenue sharing, port official had said earlier.

Ocean Freight a cheaper option than Air

The shift of shipping from air to sea has helped the sea freight rates to climb a step higher. The growing competition of the companies are spurring companies to be more efficient in providing their supply chains, leading to shorter turnarounds giving chance for the companies to move goods by sea, which certainly is a cheaper option, as also at the same time goods can be brought in at the time they are required. The cost of shipping from Hong Kong to the US was 10 times cheaper, than by air, which was increasing the demands.The tight supply of ships, have benefited the freight forwarders from the rising freight rates of around 10% in comparison to the last years.

PM's another election Gimmick

A project worth 1 lakh crore steam ahead for the shipping ministry. SagarMala is to present full gamut of illumination. The PM's vision of creating a chain after being broken has been given the title of another Election Gimmick. According to some sources priority will be given to transport generating efficiency.The success of SagarMala hinges at 85% financial participation by private players. SagarMala will encompass principles that will guide 10 years venture.

TAMP to be an appellate authority

TAMP-Tariff Authority for Major ports was set up in 1997. It is the tariff regulator for the Government owned 13- major ports. Chair Person Mr. A.L. Bongirwar, TAMP, port officials and chairperson of various other ports. Participated at the meeting. It was then Mr. D.T. Joseph who said that he is opposed to the plan of converting TAMP into an appellate. The unanimous view of the users of the various ports was to continue in its present form as the tariff regulator at Indian major ports. The views were expressed in the backdrop of reports of the last two years that TAMP could be converted into appellate authority. The users proposed that TAMP should be moved to a performance based tariff fixation at ports rather than being a cost based formula. A cost based model with predetermined rate of maximum permissible return for fixation of tariff is followed by TAMP. The cost based fixation of TAMP is disadvantageous as it has no incentives to reduce cost and also does not offer any growth for efficiency. Whereas the quantification of tariff was easy in this approach.The TAMP ensured transparency and also provided a forum for port users where one could air their views before the tariffs were fixed. The C. Babu Rajeev committee initiated that TAMP be converted into an appellate to overhaul the Indian ports Act, 1908 and the MPT Act, 1963.

The BTL and The ATL Launch

The Bengal Tiger Line along with American President line, enter in a partnership to launch its regular service from Visakhapatnam port to South East Asian destinations. On September 21 the first vessel, Tiger Bridge, a 1500teu feeder is to call at the Vishakha port to load for port Kelang and Singapore. The service from then would be on Sunday every week.Every effort is being made to keep a limit to the total turnaround time to 14 days so as to also provide convenience to the exporters opting for the services from Chennai via Vizag.The large volume containerized traffic that could have reach Vizag for its good approachability to the port, but in absence of facilities could come once the modern terminal is installed.The APL being the market ruler will boost the business while the BTL will be looking the common feeder slots.No plans are on a hook to introduce the Vizag Colombo service but it would depend on the cargo inducement if adequate.

The deferred agitation

Mr. Shatrughan Sinha had agreed to pay Rs2500 as "advance" and against the productivity Linked Reward for 2002-03 to the workers of the port and the dock as the final award to the National tribunal . The decision was taken by, the Minister at a meeting with the five renowned leaders and Indian Ports Association.

The double growth rate on the investment of Rs 100 crore

The Cochin Port trust in its meeting will discuss, on the modernization of Rajiv Gandhi Container Transshipment Terminal. It will enforce to achieve a sharp increase in the number of containers in the coming years. The bidders for the development of the proposed Vallarpadam containers arrive in discussions along with certain conditions put up by the riders regarding the new approach for the development of the container transshipment at Kochi.The conditions have been outlined in the document submitted on September 12, by the two bidders of the port namely CSX World Terminals and Maersk India.The proposed investment of the Rajiv Gandhi terminal is minimum Rs100crore that would include the acquiring of new cranes; create additional yard space and also the depth of the channel to 12.5 meters. The new technologies will result in doubling the growth rate.

The EDI programme

The Jawaharlal Nehru Port: the electronic data interface (EDI) programme undertaken by the custom authorities will ease the functioning of liquid importers as well the exporters. The facilities will help the importers and exporters to save the time in the process of getting the documents processed through the custom authorities. The processing of bills and other documents over the years has been a manual procedure, which took 4-5 days in processing. There are 20-25 importers and exporters of the liquid bulk who move in and out of the JN port on an average of 1.5-2 lakh tones a month. The amount also rises as high as 4 lakh tonnes when the Custom authorities delay the processing of the documents.ards for its customers. He believes in "both existing and new customer the HBJ pipeline to sell the gas", as told to a source. The other option that he provides is through GAIL.

The Political Bonus

As Announced by the shipping minister Mr Shatrughan Sinha, 8.33% bonus would be given to all the employees of the twelve major ports in India on their annual salaries. The decision was taken at the meeting attended by all the five port and the dockworker's union. Subject to a minimum salary of 2500 a bonus of 20 per cent flat rate is to be calculated. As the issue of productivity link the rewards pending, the workers agreed to a lower rate. There were also chances that no bonus will be paid this year. It is the political parties attempt to keep the parties happy and so the political bonus.

The sagarmala project

Sagarmala-the Rs100000 crore dream project of the Prime Minister aims to develop and upgrade the ports in the country. A low price bid made for the Rs.2000crore Vallarpadam International container Transshipment terminal by the riders and the bidders Maersk and CSX World Terminals. The revenue sharing figure was single digit quotes in comparison to the 37% of revenue sharing quote that of P&O in Chennai. The Vallarpadham container is the pilot project of the SagarMala along with the Nhava Sheva. The bidders have also asked permission to operate the existing Rajiv Gandhi Terminal from 5 to 10 years, shifting to Vallarpadham.Both the bidders at RGCT will pay the Rs75crore for transfer of container of the existing infrastructure. The per the norms of the shipping ministry the deal is awarded to the bidder who shares more from its operating revenues, if the port does not keep any reserve.The CPT would discuss the matter on September 19.

The Tonnage tax

The Indian Shipping companies from April 1, 2004 will levy the tonnage tax. The companies, excise departments and the income tax accounted problems in introducing the tonnage tax in the middle of the financial year. The report by I-maritime consultancy reviews a wide range of developments over the last 10 yrs trend of the ports in India and also the challenges faced by port developers and operators. According to the presentation stated by Mr. Ramesh Singhal of i-maritime consultancy the current container traffic of 3 million TEU's would go up to 30 million TEU by 2020 with 7-8 container for privatization. The traffic at the 12 major ports is 17% according to the CAGR(compounding annual growth rate considering rate).Through the overall development and the growing importance of the ports, a large foreign people would be interested in the Indian coastline.

The unreasonable bid

The board rejected the proposals of the bidders as there were no price and also the concessions sought were perverse. it was decided to continue and promote the Rajiv Gandhi container Terminal. It was also decided that no further discussion would be done with the two companies who submitted the bids.The port can also seek for funds from the center instead of tying up with a bank. Also among the condition applied was a condition that forwarded the period of function from 30-50years, that could be transferred back to the port.

Trade upset over clog, higher charges at Nhava Sheva

Congestion and container detention charges before the peak buying season in the West are likely to impact India's external trade. Amidst the ongoing congestion at the Nhava Sheva port, the container detention charges recovered by the shipping lines have come as a new cause of worry for the domestic trade.In case of exporters, they are facing problems in convicting their customers regarding delay in effecting shipments due to congestion at ports and overseas customers are demanding huge claims and compensation for the delay.Some times even letter of credit were expiring and exporters were being forced to negotiate orders at lower rates due to delay in exports, which was being caused caused due to congestion at the Nhava Sheva port.

 

 
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