I N D U S T R Y    N E W S







TAMP orders soon on new rates at Nhava Sheva private terminals


January 31

The Tariff Authority for Major Ports (TAMP) is expected to shortly issue its orders on the appeal for a hike in port charges field by two private port terminals at Nhava Sheva. NSICT, run by DP World and the APM Terminals, owned by the Maersk Group, are understood to have asked TAMP's approval to increase the rates by more than ten per cent.

TAMP's ruling, expected early February, will be crucial for both terminals. TAMP will be considering their proposals on the basis of the 2005 guidelines as both these terminals come under these guidelines. TAMP may ask them to cut the existing rates, given the improved performance and higher revenue earnings in the case of these terminals. Both terminals have been handling cargo beyond their installed capacity.

Therefore, if the rates are reduced, it will be applicable for the next three years. The validity of the 2005 guidelines ended in 2010 but was extended by a year by the Shipping Ministry.

Following representations made by the private terminals in 2011 June, the Government appointed an external agency with a mandate to prepare new guidelines in four months. The agency is still studying the issues. Meanwhile, the tariffs at the two terminals have come up for review.

Fearing a downward revision, the Indian Private Ports and Terminals Association (IPPTA) had approached the court seeking a stay on the revision in rates by TAMP under the 2005 guidelines.

The Delhi High Court refused to grant the stay but reported to have directed the Government to revise the guidelines at the earliest.The IPPTA has been requesting the Shipping Ministry to advice TAMP to keep in abeyance revisions in rates till the new guidelines are in place.

But it did not heed the request.In 2008, the Government had come with a new set of guidelines which allowed the port operator a 16 per cent annual return on capital. However, those covered under the 2005 guidelines are not allowed to migrate to the 2008 norms.Private operators say that the 2005 guidelines act as a disincentive to improve performance.


Maritime India - New Delhi

Govt to allow further export of 1 mn t of sugar this year


January 31

The government may allow an additional one million tonnes of sugar exports in the 2011-12 marketing year, which started in October, to improve cash flows for mills and enable timely payment to cane farmers. With estimates of sugar production exceeding annual domestic demand, the government had permitted the export of one million tonnes of the sweetener in the current marketing year.

Mills are demanding up to two million tonnes of (additional) export. But practically, only one million tonnes can go out of the country, sources said. An Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is scheduled to meet on February 7 to discuss further sugar exports, among others proposals.

According to sources, the Food Ministry has circulated an EGoM note giving the status of India's sugar supply-demand situation and explaining the possibility of further exports in view of rising cane arrears amid a liquidity crisis being faced by millers.To expedite the process of export, the ministry may also suggest different methods to the EGoM for allocating the additional one million tonnes for export to millers.

Currently, the ministry allocates the sugar export quota between mills based on their average production over three years. Sources said the ministry is mulling a change in the system to speed up the export process and improve the liquidity of mills to prevent delayed payment to farmers for their cane.

The final call on this issue will, however, be taken by the EGoM, they added. Indian Sugar Mills Association (ISMA) and National Federation of Cooperative Sugar Factories (NFCSF) have been demanding the additional export of 1-2 million tonnes of sugar in the current marketing year (October-September).They also said that current global prices are favourable for exports.

Sugar production in India is estimated at 24.5 million tonnes in the 2O11-12 marketing year. However, the industry has pegged sugar output at 26 million tonnes.India exported 2.6 million tonnes of sugar in the 2010-11 marketing year, out of which 1.5 million tonnes was through open general licences (OGL).


Maritime India - Mumbai

Govt won't cut Iranian oil imports: Mukherjee


January 31

India, the, will not take steps to cut petroleum imports from Iran despite US and European sanctions against Tehran, finance minister Pranab Mukherjee said.

The United States wants buyers in Asia, Iran's biggest oil market, to cut imports to put further pressure on Tehran to rein in its nuclear ambitions. Washington suspects Iran of trying to make nuclear weapons, but Tehran says its nuclear program is for peaceful means. India, which imports 12 pc of its oil from the Islamic Republic, cannot do without Iranian oil, Mukherjee said.

It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them, Mukherjee said.

New US sanctions, authorised on December 31 and which penalise any financial institutions dealing with Iran's central bank, could make it more difficult for India to pay Iran for oil imports.The European Union banned oil imports from Iran earlier this month. Mukherjee repeated that criticism, saying US quantitative easing creates "inflationary impacts" in emerging economies and boosts uncertainty.


Maritime India - New Delhi

Baltic index plunges 58 pc January


January 31

The Baltic Dry Index headed for its largest monthly decline in more than three years as plunging rents and near-record fuel prices cut earnings to below zero on some shipping routes. The index fell 3.6 per cent to 726 last Friday, extending this month's slump to 58 per cent, according to the Baltic Exchange. A monthly decline of that magnitude would be the biggest since a 74 per cent plunge in October 2008.

The gauge is at its lowest since Dec 11, 2008. Rising fuel, or bunker, prices are curbing returns for Capesize vessels to levels below what is needed to cover operating expenses, the exchange said. Week-long Chinese New Year holidays are cutting minerals and grains cargoes and worsening a surplus of vessels. The start of the year has been a rout for the markets with average rates at three-year lows and bunker fuel near record highs making the current freight levels highly unsustainable,' RS Platou Markets AS, an Oslo-based investment bank, said in a report.

Rates equate to zero returns or less for charters on so-called backhaul routes that allow owners to reposition vessels to the Atlantic Ocean from the Asia-Pacific region. Rates for Capesize ships are not enough to cover operating costs, the data show.

Panamax ships slumped a record minus US$950 a day for Asia-based vessels taking coal to Europe from Canada's west coast, according to the exchange.

While some assessed rates are negative, 'there has so far been little evidence of owners paying charterers to take their ships', the exchange said.

Owners of the dry bulk fleet of more than 8,900 vessels are contending with a supply of new ships that is outpacing global demand, after a boom in rates saw record numbers of vessels ordered in 2007 and 2008. Volumes of commodities shipped on the vessels are forecast to rise 3 per cent to 3.8 billion tonnes in 2012, while the fleet grows 12 per cent, according to Clarkson plc.

The fuel price for ships at Singapore is 6.4 per cent higher this year, at $736 per tonne. The price rose to a record $764 a tonne in July 15, 2008. Average daily rents for Capesizes were $101,601 on the same date. The average cost to hire a Capesize vessel slid 2.9 per cent to $5,566 a day, the lowest since March, exchange data show.

Rents for the other three vessel sizes tracked by the gauge were at 35-month lows. Panamax returns averaged $6,488, 5.7 per cent lower, while Supramax vessels - which haul about 25 per cent less - declined 3.5 per cent to $7,268. Handysize vessels, the smallest tracked by the index, fell 1.9 per cent to $6,264, according to the exchange.


Maritime India - Mumbai

Finmin imposes anti-dumping duty on morpholine imports from China, EU, US


January 31

The Finance Ministry has imposed definitive anti-dumping duty on 'morpholine' imports from China, European Union and the United States.This duty will last for five years with effect from September 20, 2011 - the date of imposition of provisional anti-dumping dutyBalaji Amines had filed the petition seeking anti-dumping probe on imports of 'morpholine' from China, European Union and the US.

This company is the sole producer of morpholine in the country. Based on the recommendations of the Designated Authority in the Commerce Ministry in its final findings, the Revenue Department has now imposed a definitive anti-dumping duty of $0.29 per kilogram on 'morpholine' produced and exported by Anhui Haoyuan Chemical Group, China.For other producers and exporters of morpholine from China, the definitive anti-dumping duty has been pegged at $0.63 per kilogram.

In the case of morpholine produced by BASF and exported from the European Union, the anti-dumping duty has been pegged at $0.35 per kilogram. For other producers and exporters from the European Union, the definitive duty has been pegged at $0.68 per kilogram. The Revenue Department has also imposed definitive anti-dumping duty of $0.50 per kilogram on morpholine produced and exported by Huntsman Petrochemical Corporation, USA. For other producers and exporters of this chemical from the US, the anti-dumping duty has been pegged at $0.81 per kilogram.


Maritime India - New Delhi

Dependence on imports on the rise; domestic Dec gas output slips 10.8 pc


January 31

With the gap between demand and supply constantly widening, higher dependence on imported and more expensive oil and gas is on the rise. Domestic crude oil and natural gas output in December was down 5.6 per cent and 10.8 per cent, respectively, year-on-year.

Companies like GAIL (India) that are into gas transmission and marketing have stepped up import of natural gas.For instance, in the third quarter of the last fiscal GAIL's gas mix had one mmscmd of imported gas, while in third quarter of this fiscal four mmscmd accounted for liquefied natural gas (LNG) sourced by it and 16 mmscmd is the long-term contracts the company has.

Therefore, of the total 84 mmscmd of gas which GAIL markets, 20 mmscmd is imported gas. The natural gas output fell for the 13th straight month by 10.8 per cent to 3.915 billion cubic metres year-on-year. This was due to the decline in output at Reliance Ind-operated D6 block in Krishna Godavari Basin. The output from offshore fields fell by 14.4 per cent at 3.131 billion cubic metre.The domestic oil refiners imported 13.602 million tonnes of crude oil, down from 14.82 million tonne in November.

This was because refineries of Hindustan Petroleum Corp, Chennai Petroleum Corp and Reliance Ind turned less crude into fuels.Total refinery output of the 17 public sector and two private sectors was up 0.8 per cent year-on-year at 14.824 million tonne. Reliance Industries from its first refinery in Jamnagar processed 4.2 per cent less crude oil in December at 2.9 million tonne against the same month last year.

The company does not share data for its second export oriented refinery at Jamnagar. Crude oil output in the country dropped for the third straight month at 3.173 million tonne in December.

This was mainly because production from ONGC's fields fell 4.8 per cent to 2 million tonne year-on-year, Petroleum Ministry data showed. ONGC's Mumbai High fields, Northwest of Mumbai, produced 1.378 million tonne, down 5.9 per cent from the same month last year.

The fields that account for 42 per cent of domestic oil production are experiencing a natural decline in output. The petroleum products consumption was up in December at 12.889 million tonne from 12.742 million tonne in the same month last year.


Maritime India - New Delhi

Vizhinjam port cost to rise by 60 pc as land, infrastructure gets costlier


January 31

The cost of developing India's largest deep-water port at Vizhinjam in Kerala has risen by 60% because of escalating land and infrastructure costs, a top port official said.

The port, planned as a container transshipment hub with a capacity to handle 4.1 million TEUs a year, will be built on the so-called landlord model, where the state government will set up the infrastructure and invite an operator to run the port.

"The state government has approved the revised cost of Rs 4,010 crore for the first phase. A decision on the selection of the operator can be expected in the next 10 days," AS Suresh Babu, managing director of Vizhinjam International Seaport Ltd, said.

The Union home ministry had recently denied security clearance to private sector contender Adani Ports, leaving a consortium led by Welspun Group as the lone bidder for the project, which was first proposed in eight years ago. While the Kerala government will raise Rs 800 crore through a bond issue, developer Vizhinjam International has engaged SBI Caps to mop up Rs 800 crore from leading financial institutions such as HUDCO and LIC.

Besides, a consortium led by State Bank of Travancore will bring in Rs 300 while the state government has allowed a budgetary allocation of Rs 250 crore."We are clear about the funding now.

The operator has to bring Rs 970 crore and the rest will be funded by the state government over 12-15 years and they have allocated Rs 250 crore every year for it," Suresh Babu said. Experts say that Indian port projects have been facing rising costs because of red tape.

"For Vizhinjam, the actual cost will be way above the estimate," said Hemant B Bhattbhatt, senior director at Deloitte India.Kerala had made two unsuccessful attempts to develop the port. In 2006, a consortium of infrastructure firms led by Mumbai-based Zoom developers and three Chinese companies were chosen by the state. But the central government rejected Zoom's bid on security grounds.

The state government later appointed Hyderabad - based Lanco Infratech, which withdrew after Zoom filed a petition in the Supreme Court. Last year, the state government decided to develop the port on a landlord model, styled on international ports such as Port of Antwerp and Rotterdam.


Maritime India - New Delhi

India's port capacity crosses 1 billion tons


January 31

India's port capacity has risen to 1160 million metric tons as of December 2011.As India charts its voyage as the port of call for world trade, ports and terminals see the critical need to meet the growing demand in both infrastructure and capacity for vessels crisscrossing between the West and the East.

About 95% of India's overseas cargo by volume and 75% by value are carried by sea. Thus the major ports play a key role in facilitating external trade. Development of India's Port and Shipping industry is therefore critical to sustaining current levels and achieving higher levels of growth in the years to come.


Maritime India - New Delhi

Eredene Capital makes partial exit from Sattva


January 31

Eredene Capital PLC sold 10 per cent stake in Sattva CFS for £1.1 million, fetching an IRR of 49 per cent. The stake was sold to the promoters of the Sattva Business Group and would bring Eredene's stake down to 39 per cent. The deal is a debut exit for Eredene Capital.Alastair King, chief executive and founder of Eredene, said the partial sale of the stake in Sattva CFS was the first disposal since the Eredene Group began building a portfolio of infrastructure investment in India in 2007.

The Eredene group subsidiary originally invested £880,000 for 49 per cent of Sattva CFS with the Sattva Business Group holding 51 per cent. Sattva CFS is located in Vichoor and services Chennai port. Eredene Group has a second CFS investment with the Sattva Business Group, Sattva Conware Pvt Ltd near Ennore, another port in the Tamil Nadu, in which it has an 83 per cent stake.


Maritime India - New Delhi

Kochi Port mulls to issue more stevedoring licences


January 31

The Kochi Port plans to issue more stevedoring licences. A communication issued by the port said that Quay 8 and 9 of the Ernakulam wharf offered up to 12.5 metre draft and full rake loading facility.

These facilities can be leveraged to attract more cargo by companies capable of utilising them. At present there are nine stevedoring companies, which have obtained licence from the Port Trust. However, only five of these companies are now active in the field.

Under these circumstances, the Port plans to issue more licences to companies capable of using the port's facilities. Those interested in obtaining new licences may contact the Traffic Department of the Port Trust, the communication said.

The firms should undertake to provide minimum equipment or gear either owned or hired and should undertake to employ the minimum specified supervising personnel with experience in cargo handling/stowage.


Maritime India - New Delhi

S Lankan Group sells Colombo Port stake to China Holdings


January 31

Sri Lankan conglomerate Aitken Spence agreed to sell its 30 percent stake in the Colombo International Container Terminals to China Merchants Holdings, the majority stakeholder in the $500 million project.

Aitken in a statement to the Colombo Stock Exchange said local authorities approved the deal but did not disclose financial details."We are now finalizing the formalities for transfer of our shareholding to China Merchants Holdings," the company said.

CMHI currently owns 55 percent of the new terminal, which will increase to 85 percent following the transaction, with state-owned Sri Lanka Ports Authority controlling the remaining 15 pc.

The joint venture agreement for the project, part of the proposed Colombo South Harbor Hub, was signed in August last year, and the developers launched construction in December. CICT, on a 35-year concession, is expected to offer nearly 4,000 feet of container berth, a 59-foot draft and about 150 acres of yard space.

The project has been planned for construction over five years with the first phase scheduled for completion in 2014, offering an estimated annual capacity of 2.4 million TEUs.The planned 12-berth South Harbor Hub will eventually have three terminals, each with a quay length of 3,937 feet, and bids for the next two phases, comprising eastern and western terminals, will be invited at a later stage.Colombo Port, which largely depends on transshipment cargo from India, has three terminals; state-owned Jaya Container Terminal and Unity Container Terminal, as well as DP World's South Asia Gateway Terminal, with a combined capacity of 4.5 million TEUs.


Maritime India - New Delhi

JN Port celebrates Republic Day


January 31

Republic Day was celebrated by JN Port on January, 26, 2012 in a befitting manner at JNP Township, Sheva, Navi Mumbai. Mr L. Radhakrishnan, Chairman, JNP hoisted the national flag and inspected the parade and marchpas by platoons consisting of CISF personnel, school children from St Mary's School at the sport ground.

The Chairman was received by the senior officers of JNP and CISF at the venue. NCC cadets in large numbers added colour to the event.

Addressing the gathering, the Chairman announced the highlights of the port performance and future development plans, commitment of quality service to the trade and felicitated the officers and staff on the Republic Day . He also remembered the sacrifice of freedom fighters and all those who worked for the growth of the Port on this occasion.

Various cultural programmes was organized on this occasion by IES JNP Vidyalaya and St. Mary's school. There was a dog show by the Dog Squad of the CISF.


Maritime India - Mumbai



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