Ports & Shipping News

August 22, 2011 August 28, 2011

India Infrastructure Publishing B-17, Qutab Institutional Area New Delhi 110016 Tel: 91-11-4103 4600 / 4601 Fax: 91-11-2653 1196 E-mail: info@indiainfrastructure.com

Ports The Ministry of Shipping (MoS) is planning to form special purpose vehicles (SPVs) to execute seven big-size ports which are likely to be allowed to raise money from the market. The government has envisaged setting up of seven major corporatised ports by 2017 at an estimated investment of Rs 350 billion. The states of Orissa, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Maharashtra and Gujarat are expected to get one port project each, which would be executed by the SPVs. Meanwhile, MoS has drawn up a Rs 1.55-trillion investment plan for modernisation and expansion of ports over the Twelfth Five Year Plan period (2012-17). The agenda is to iron out the rough edges of port infrastructure in the country. According to reports, the focus will be on improving efficiency parameters of Indian ports, including upgrading outdated machinery, scaling up the work in road and rail linkages, expansion to boost containerisation, deepening the draft at major ports and awarding projects under the public-private partnership (PPP) mode with 52 per cent of planned investment coming from the private sector. The remaining 48 per cent is expected to come from internal resources and extra budgetary resources. Further, MoS has expedited the process for corporatising the Jawaharlal Nehru Port Trust (JNPT) that was to be taken up along with unification of all the port statutes. The ministry has asserted that this was being done to improve efficiency of the port. The move is expected to improve asset utilisation at JNPT and reduce the turnaround time. Meanwhile, MoS has stepped up the process to set up the fifth container terminal at JNPT with an investment of over $2 billion on a build, operate and transfer (BOT) basis. The terminal is expected to be awarded via a competitive bidding process. Some of the operators that have shown interest in the project include the Port of Singapore Authority (PSA) and Dubai Ports World (DP World). Both these operators already have container facilities in JNPT. The Gangavaram port in Andhra Pradesh has invited bids for its capital dredging work. The scope of the proposed dredging work involves removal of about 3.5 million cubic metre of silt and the work order is likely to be issued within the next two to three months. The cost estimate will be finalised depending on the bids. According to reports, major international dredging contractors and a few Indian firms, including the state-owned Dredging Corporation of India have expressed their interest in the project. The bulk of the work will be undertaken to facilitate the construction of four new berths three multipurpose berths and one fully-mechanised coal berth proposed to be built within 24 months from the day the contract is awarded. JNPT will raise Rs 15 billion through a tax-free bond issue before March 2012 for undertaking dredging works. According to reports, the amount will fund the first phase of the Rs 55-billion dredging project to increase the draft of the Mumbai port harbours channel. The Government of Kerala has initiated steps for the formation of the Kerala Maritime Board as a priority, which will result in quicker decisions on ports and shipping, in addition to facilitating the development of coastal shipping in the state. The states Port Directorate plans to undertake remedial measures such as creation of basic minimum port and related infrastructure at select port locations, devising an incentive framework, government's support, awareness creation, amongst others. The VO Chidambaranar (VOC) Port has embarked upon a massive inner harbour development project to enhance the present capacity from 23.72 million tonne (mt) to 62 mt over the next two to three years. According to reports, the second container terminal will be constructed at an estimated cost of Rs 3.35 billion. Ascent Capital, a Bangalore-based private equity firm, has committed $30 million in Karaikal Port Private Limited, which is situated in the Union Territory of Pondicherry, owned and operated by Marg Limited. The Karaikal port is envisaged to have a total of nine berths, capable of handling over 50 million tonne per annum (mtpa) by 2016. The port will be developed in three phases, with the final phase becoming operational in 2016. Chettinad International Coal Terminal Limited (CICTL), the private terminal at the Ennore port, is targeting to handle nearly five mt of coal/coke by the end of 2011-12. The buoyancy in handling is

Ports & Shipping News

August 22, 2011 August 28, 2011

India Infrastructure Publishing B-17, Qutab Institutional Area New Delhi 110016 Tel: 91-11-4103 4600 / 4601 Fax: 91-11-2653 1196 E-mail: info@indiainfrastructure.com

based on expected shifting of coal from Chennai port to Ennore from October 2011 on the directions of the Madras High Court. DP World Limited has registered a total income of Rs 1.51 billion in the first six months (January-June) of the calendar year 2011, as against Rs 1.54 billion in the corresponding period of the previous calendar year. The net profit during the period increased to Rs 740.87 million from Rs 219.22 million in 2010, a growth of about 238 per cent. However, the total expenditure for the period increased to Rs 1.29 billion from Rs 1.27 billion. The consolidated throughput also increased to 13.47 million twentyfoot equivalent units (TEUs) during the same period (January-June 2011) from 13.16 TEUs in the corresponding period of 2010, recording a growth of about 2 per cent. International Finance Corporation is planning to provide a $11.5-million loan to Sparkle Port Services Limited (SPSL), a 100-per cent subsidiary of Hyderabad-based port management service provider Ocean Sparkle Limited, for a tenor of 12 years. SPSL recently received a 17-year contract from Petronet LNG Limited to provide services at its upcoming liquefied natural gas (LNG) terminal at Kochi. The total project cost for the contract, entailing purchases of tugboats and marine craft, is $31.5 million. The loan amount will be used to part-fund the capital expenditure for this project only. Shipping The Parliamentary Committee on Transport, Tourism and Culture has recommended relaxing the cabotage law to allow foreign-flagged vessels to deliver cargo between Indian ports. Cargo delivery by foreign-flagged ships is being considered as a major boost to the international container transshipment terminal (ICTT) at Vallarpadom and a similar facility proposed at Vizhinjam in Thiruvananthapuram. In the recent past, the Parliamentary Standing Committee had also recommended amendments to the cabotage law. The Shipping Corporation of India Limited (SCI) has accepted delivery of m v SCI Panna, a 2,001-deadweight tonnage (DWT) anchor handling tug-cum-supply vessel (AHTSV) of 80 tonne bollard pull (tbp) capacity. The company had signed contracts for acquisition of four newly built 80 tbp AHTSVs with Bharati Shipyard Limited. The remaining three vessels are scheduled for delivery by the end of 2011. Meanwhile, SCI is planning to invest around $114 million to acquire six offshore vessels. Each of the anchor-handling vessels would cost around $19 million. According to reports, SCI is keen on ramping up its offshore presence and plans to spend up to $250 million to acquire 10 offshore vessels in the near future. The Cochin Port Trust has decided to float a global tender to select a partner for its proposed ship repair yard. The project is part of a plan to redevelop its water front and other facilities, which became idle following the commissioning of the Vallarpadam ICTT. Dolphin Offshore Enterprises (India) Limited has posted a decline of 13.58 per cent in its consolidated income at Rs 695.29 million during the first quarter (April-June) of the financial year 2011-12 as against Rs 804.62 million in the corresponding quarter of the previous year. However, net profit for the quarter increased to Rs 65.17 million as against a net loss of Rs 123.09 million in the corresponding quarter of 2010-11. According to a new vessel sharing arrangement, the Hong Kong-based Orient Overseas Container Line (OOCL) has joined China-India NCX service now being run by Samudera Shipping and Japan's Mitsui OSK Lines. The service links Shenzhen-Da Chan Bay (Central China) with JNPT. As per the agreement, OOCL will offer one vessel, the recently chartered 2732-TEU Antje Wulff, thus bringing the total number of vessels deployed on the route to five of the capacity ranging between 2,000 and 2,700 TEUs. The new port rotation will be Ningbo-Shanghai-Shenzhen Da Chan Bay-Hong KongSingapore-JN Port-Colombo- Port Kelang- Singapore- Shanghai-Ningbo.
Note: Rs 1 crore = Rs 0.01 billion; Rs 1 lakh = Rs 0.1 million; Rs 1,000 million = Rs 1 billion