Thursday, 29 September 2011

West African pirates- following Somali footsteps?

The UN Security Council this week voiced concern over increasing incidents of maritime piracy, armed robbery and reports of hostage-taking in the Gulf of Guinea, and called on the international community for help. The industry must be feeling a keen sense of déjà vu, also because pirates off the West coast of Africa seem to be copying the Somali pirates that had expanded operations from off their coast to waters much further afield. Recent developments indicate that Nigerian pirate gangs are similarly moving into the territorial waters of neighbouring countries in response to stricter Nigerian policing at home.

We had reported earlier that the coast of Benin had seen a marked escalation in pirate attacks this year as mainly Nigerian armed gangs raided ships to steal fuel, personal effects and stores. It is now reported by the International Maritime Bureau (IMB) that attacks may be on the rise off Cameroon to the South, in part because the Nigerian military has unleashed a crackdown on gangs operating in its own waters. "We believe that this is happening because the Nigerian navy and coastguard has clamped down heavily on piracy in their waters, forcing the pirates to move elsewhere," says IMB’s Cyrus Mody. The Nigerian Joint Task Force is believed to have arrested thirty suspected pirates in the last month. There have been 19 pirate attacks off Benin this year, compared with none in 2010. Direct fallout: neighbouring Ghana says it is beefing up its own coastal security apparatus in response to spreading piracy.

Nonetheless, recent attacks on ships further afield- including at least one incident where the crew were held hostage- point to a worrisome trend in the Gulf of Guinea, an area rich in oil and a busy trading zone. The Cyprus-flagged Mattheus I was hijacked 60 nautical miles off the coast of Benin less than two weeks ago. The success of their brethren on Africa’s east coast is encouraging to these gangs, no doubt. "While Somalis are not coming to Nigeria with franchise kits, Nigerians do have smartphones and so can surf the Web and keep an eye on what the Somalis and other pirates are doing and incorporate inspired changes," Michael Frodl of U.S.-based consultancy C-LEVEL Maritime Risks told Reuters. "All this represents a growing menace to shipping off Nigeria, Benin, and other West African nations."

Insurers have already added Benin to their lists of high-risk areas, but analysts say that it is just a matter of time before the entire Gulf of Guinea region, rich in oil, minerals and other commodities, becomes widely perceived as an area hazardous to ships and crews in transit.

Many analysts see events in the Gulf of Guinea mirroring those in Somalia over time. Frodl says that pirates are moving offshore not just to avoid coastal patrols "but also to take advantage of ships letting down their guard in waters assumed to be safer. The attacks off Benin represent the same sort of pivot we saw from the Somalis when the more ambitious and capable pirates shunned the Gulf of Aden a couple of years ago for the Somali Basin," he said.

Most Gulf of Guinea pirates have not sought to hijack vessels so far, being apparently content with just loot and robbery. However, with unconfirmed reports suggesting that there have already been cases of West African pirates being paid small ransoms to release crews, the writing- as it was in Somalia for a long time- seems to be well and truly on the wall.

Are Indian Shipping Companies moving away from shipping?

Indian shipping companies are on a diversification spree, say media reports, indicating that some of the biggest names in the domestic industry have announced plans to expand into new ventures, even new sectors. The moves are seen as a response to analyses that indicate a further slowdown in the industry in the next few quarters as shipping comes to grips with the financial crisis that has stymied economic growth around the world.

A bevy of announcements have been made in the past few weeks, including at shareholders' meets; new ventures include offshore services, mining and dredging. Both the largest public sector company- Shipping Corporation of India, and the biggest private player, Great Eastern Shipping, are expanding their offshore services, while Mercator Lines, having recently purchased a coal mine in Indonesia, says it is looking at other acquisitions in that country.

Market sources say that SCI is planning a subsidiary for its offshore operations, much like Great Eastern has done. The latter company, it is learnt, plans to make Singapore the hub of its global operations. Other smaller setups are looking at shipbuilding, logistics and container freight stations to drive revenues in an otherwise sluggish shipping market.

"We have to de-risk ourselves from the capital-intensive shipping business and focus on something that relies more on human capital. That is why we are betting big on the offshore business," says Ravi K Sheth, Greatship's MD. Even smaller players like Varun and Garware are looking at offshore oil exploration more seriously in fields as far away as Brazil and SE Asia.

SCI in particular is sitting on a large war chest that has allowed it to announce plans that will push for renewal of its aging shipping fleet. The public sector giant announced yesterday that it would spend Rs 3,700 crore this financial year to acquire 24 new vessels. This is not counting the 29 ships that are already under construction. CMD S Hajara also indicated that SCI had not reversed its earlier decision on acquiring stakes in private shipyards, but refused to say when these plans would materialise. "When your bottom lines are under pressure, I cannot say when the plan will be implemented," he said.

Companies are obviously finding it prudent to diversify. Mercator Lines Chairman HK Mittal says of his company's plans, "We are looking to acquire more coal mines, especially in Indonesia where we have been operating for sometime. Our pending order book for dredging is close to Rs 400 crore and our dredgers are occupied for the next one year." 

Mercator is slated to expand its dredging operations in India. "Although we continue to invest in new shipping assets, the revenue contribution from the division in the company's total turnover shall continue to decline and the shipping division will be a support service for our other business verticals", Mittal added.

The industry has been plagued with rising fuel costs, falling freight rates and squeezed margins for quite a while. Earlier optimism that the worst was over has given way to increasingly circumspect projections by ship-owners as market conditions continue to bite. Bunker rates have shot up alarmingly over the last ten weeks, and some analysts have almost simultaneously predicted that Indian shippers' revenues from core businesses could be hit by as much as 25% later this year. 

Deloitte India's Director Hemant Bhattbhat is one of them. "We will see a 20-25% decline in revenues for shipping companies due to the rising cost of crude oil and the unstable global market. Companies who have started moving away from the general business into specialised areas are the ones that will survive in the long run," he says.

Monday, 26 September 2011

The PlanetSolar project- first around the world on solar power

The catamaran "Turanor PlanetSolar" will arrive in Singapore this week on a round the world voyage that started almost a year ago in Monaco. The sleek, futuristic catamaran is the brainchild of Swiss national Raphael Domjan; it is completely solar-powered and will be the first such vessel to circumnavigate the earth.
Unconfirmed media reports say that Mumbai the Turanor's next halt after Singapore, suggesting that the catamaran will touch Mumbai, Djibouti, Abu Dhabi and transit the Suez Canal before arriving back in Monaco next May.

Domjan says that even if big ships never end up working entirely on solar power, the PlanetSolar experiment could result in tested technology that may be used in hybrid marine engines of the future.  “The technology is improving very rapidly, and is getting much cheaper. Someone has to be the first to show it works — that’s what we are doing,” he said.

The name TÛRANOR is derived from the “Lord of the Rings” by J.R.R. Tolkien and means both “the power of the sun” and "victory". Domjan- a former ambulance driver, mountain guide and rescue specialist- spent six years putting the project together before the voyage that commenced last year. PlanetSolar wants to show that current technologies aimed at improving energy efficiency are reliable and effective and to advance scientific research in the field of renewable energy.
 “We want to show to the world what can be done, that modern solar technology has huge economic potential,” Mr. Domjan says. “The idea is to provide an impulse to the industry to consider alternatives, to think about innovative ways to reduce their energy needs.”

Solar panels are in wide use on boats already, but PlanetSolar is the first large scale experiment that relies completely on solar renewable energy.  The 30-metre catamaran, that cost $15 million to build, boasts of more than 5,300 square feet of solar panels on its top deck. Lithium-ion batteries store the sun's energy harnessed by this honeycomb of solar panels, allowing the Turanor to cruise even on cloudy days.

Although commercial shipping is experimenting with solar and wind energy, an exclusive use of a silent pollution-free means of propulsion for large ships is still a long way away. The recent recession and rising fuel prices have forced owners to examine other options, including wind kites. Research in hull and propeller design, alternative fuels and natural gas and waste-heat recovery systems has grown rapidly. The phenomenon of 'slow-steaming' has caught on. As Maersk's Tim Smith says, “If we slow a ship’s speed by 20 percent, from, say, 23 knots to about 19 knots, you can save up to 40 percent of the fuel cost.”

The awakening in the wider industry over environmental and fuel efficiency issues means that many in commercial shipping are following PlanetSolar's voyage with great interest. “People now are far more likely to look at anything — what will get economic payback over the life span of a ship, which can be 25 or 30 years,” Arthur Bowring of the Hong Kong Shipowners Association says. “The priorities have changed with the higher fuel price.”
He adds, commenting on the PlanetSolar project, “What they are doing is brilliant — it gets people to think.”

Can India learn from Australia's domestic shipping plans?

Partly driven by the country's dwindling tonnage, Australia has announced widespread reforms in domestic shipping. The ambitious programme, set to be implemented in less than a year from now- by July 2012- will see the introduction of major tax breaks for shipping companies and a new international register for shipping. A new licensing regime and measures to promote skills development are also included in the program.

The plans will mean that Australian companies with locally registered vessels will not pay company tax; qualifying income from shipping and royalty withholding tax will be exempted. In addition, to encourage renewals of an ageing fleet, the depreciation rate will be changed so assets can be written off in 10 years instead of 20. Tax offsets will also be offered to domestic companies that employ resident seafarers working internationally. To qualify for the tax breaks, vessels must be Australian flagged and have stayed in the regime for at least ten years, besides meeting other conditions.

The new International Shipping register will encourage companies to switch to the Australian flag, observers say, with plans to enhance the skills of resident seafarers and a new deal between employers and unions encouraging sea skills in the island nation.

These measures are a response to the fact that although the Australian shipping market is pegged at US$213 billion dollars- 10% of global trade and the world’s fourth largest by volume- only a negligible amount is carried in Australian flagged vessels. Australia has seen the numbers of its major ships drop by more than half since 1995, when 55 vessels were in service; today there are only 22. Just four of these operate internationally.

Infrastructure Minister Anthony Albanese explains why these steps are being taken. Besides issues to do with national security, the environment and the economy, he says, “If we do not act now the Australian shipping industry will be lost forever.”

NGOs want shipping to pay carbon tax

Oxfam, the international confederation of NGO's and the World Wide Fund for Nature (WWF) have published a joint report saying that shipping should pay a 'carbon tax' to offset the estimated 3% of global emissions it generates. The funds thus collected could go to the UN's Green Climate Fund (GCF), they say, pointing out that this would be easier to do than to wait for governments to budget direct contributions to the GCF. “The most promising option in the near term is to raise finance from international shipping,” they said.

The move by the NGOs is seen as a response to fallout of last years Cancun summit, where countries agreed to $100 billion dollars funding for the GCF without any agreement on how the money would be forthcoming. The NGOs now say that France, Germany and Mexico support the carbon tax and “many players in the shipping industry are calling for a carbon price to be set”.

 The two widely respected organisations claim that a “carbon price” of $25 per tonne would increase bunker costs by around 10% and cost the shipping industry approximately $25bn a year, equivalent to around 0.2% of the total value of global trade. “This is likely to have a marginal impact on global patterns of trade, not least when seen in the context of much larger changes in bunker fuel prices and freight rates over the past two decades,” the report adds.

The report agrees that the IMO's EEDI- the Emergency Efficiency Design Index- is a useful "first step," but Oxfam and the WWF nonetheless want their tax recommendations to be put on the agenda in Durban at the end of this year when the 17th UN Framework Convention on Climate Change meets. They say that a carbon tax "would drive significant maritime emissions cuts.”

 “Setting a carbon price for ships – even one starting at a moderate level – sends the clearest signal to shipowners and operators that they must internalise their carbon costs in both the designs and operations of their ships,” the report says.

Thursday, 22 September 2011

Additional duty hits expansion plans of Indian shipping companies.

Indian shipping companies have approached the Finance Ministry to reconsider its announced plan to levy excise duty and the ADC- additional duty of customs- on import of ships. Ship-owners have reportedly represented that a regime of multiple taxation is unfair and leaves them at a disadvantage. Recent reports of major ship owners like the Shipping Corporation of India (SCI) slowing down on asset acquisition plans will no doubt indicate to the government the tight times the industry is going through. Many Indian companies have announced ambitious expansion plans, no doubt egged on by the lower prices of ships in the last few years.

The Finance Minister had announced these changes in the last Budget on the grounds that the system was being streamlined to prepare for the impending General Services Tax (GST) regime that the government is keen to implement as soon as possible. This change meant that import of ships would be more expensive. The Hindu Business Line says, "Ship owners will have to bear an additional about nine per cent as excise duty, corresponding ACD and Special ACD."  Not just that, the special Additional Customs duty (SACD) exemption enjoyed earlier by ship owners will no longer apply, adding another four percent to costs..

Meanwhile, SCI has temporarily halted plans to issue tenders to buy new vessels. Its move seems to be market driven, as Director (Tech and Offshore Services) AK Gupta indicated. The company's target of ordering 62 vessels by next year will fall short by around 15 vessels.

The shipping industry is believed to be asking for a level playing field from the Finance Minister, saying that the new levies imposed would put them at a disadvantage compared to foreign ship owners. India stands sixteenth in the world - at 10 million GRT- in terms of tonnage capacity. Any additional burden on acquisitions in these troubled times may indeed turn out to be crippling for the industry's growth plans.

Mysterious "Pavit" to be auctioned?

The mysterious MT Pavit- the ship that drifted onto the popular Juhu beach in the city in the end of July unnoticed by India's much vaunted three tier security cordon- may be put under the hammer later this month. This is to try to recover at least part of the costs incurred by Indian agencies after the grounding. Unfortunately, it appears that the cost of salvage operations, combined with other port charges, have mounted beyond what the ship is worth. The Great Offshore salvage team had shifted the Pavit to Dighi after salvage- the Pavit was re-shifted to Dabhol later.

The authorities had sent a legal notice to the ship's owners based in Dubai. Pavit Shipping and Prime Tankers LLC are believed to have ignored this notice, and the Directorate General of Shipping is taking a serious look at auctioning the ship to recover damages. The DGS has asked the Maharashtra Maritime Board (MMB) to “go ahead with the process of recovering dues” from the owners. 

The MMB had communicated to the owners that they “take responsibility to remove MT Pavit” and pay for “services rendered, including repairing the damaged shores, dues for vessel in port limit, compensation for obstruction caused for the unlawful use of said landing place and cost of the salvage operation”.

The MMB is now planning to take stronger action leading o a possible auction. "We will send a (legal) notice this week," said CEO of the MMB said Shyamsunder Shinde. "The period of deadline begins from the date we send the notice, failing which the vessel will be auctioned to recover costs.”

Thursday, 15 September 2011

Is this the right time for Ultra Large Containerships?

About five years ago, Maersk was the first to start what Paris based maritime consultants Alphaliner said last week has now become a “race for ultra-large containerships.”  The Maersk E-Class vessels- each with a capacity of 15,550 TEU- were just the beginning for the Danish giant: it later introduced the EEE Class, ordering twenty of these 18,000 TEU behemoths for delivery between 2013 and 2015. Some analysts are viewing these moves- and those of several other ship owners who seem to be on a mega-ship ordering or capacity enhancement spree- with some concern, as overcapacity is one of the biggest problems looming large over the industry today. Recent dread about a global double dip recession will only add to their fears.
Interestingly, Maersk Group CEO Nils Andersen says that shipping lines have been engaged in “reckless ordering” and are putting their businesses at risk by joining the race.

Owners are clearly planning to take advantage of economies of scale, but they are not stopping at just ordering new giant box ships. Maersk recently commenced a 'capacity boost' plan that will increase the carrying capacity of each of its ten existing S Class container ships by approximately 15 percent, from 8,200-8,600 TEU to about 9,600 TEU each. The accommodation on each of these vessels will be raised to allow an extra two tiers of containers to be loaded. This will not increase tonnage, though it will allow Maersk to increase capacity for empty or light containers considerably.

Many other ship owners have upgraded the size of container ships that have been ordered recently. Hapag-Lloyd’s upgrade of six 8,750 TEU units to 13,100 TEU each is a case in point. CMA CGM’s boosting the capacity of three 13,830 TEU ships to 16,000 TEU each, NOL’s renegotiations of ten 8,400 TEU ships on order to 9,200 TEU each and NYK’s upgrade of two 6,350 TEU vessels to 8,000 TEU each are some of the others.

Defence Minister wants maritime security stakeholders to get their act together

At a coastal security review meeting yesterday, Defence Ministry AK Antony reportedly told all stakeholders in maritime security that there was no room for “delay or slackness” and that unless all the agencies concerned worked together, “there would be no real progress”.

The Ministry of Home Affairs had earlier told the Indian parliament that threats to major coastal cities from pan-Islamist terrorist groups continued to exist- but that India was prepared to respond to these. Mr Antony had been pushed by MPs to answer questions on maritime security particularly after the Pavit and Wisdom incidents, but analysts say that the security situation is far from being under control. Reports indicate that joint exercises conducted along the coastline, including the May 'Sagar Kavach' exercises, have thrown up glaring loopholes in coastal security, elements of which remain underfunded, staffed with ill-equipped and poorly trained personnel, besides suffering from serious co-ordination problems.

These drills have exposed the lack of preparedness even in a sensitive state like Maharashtra that has suffered at least twice- in 1993 and 2008- because of terrorism or terrorists that came in from the Arabian Sea. In recent exercises, says the Asian Age in a report, major breaches in the State's maritime security went unchecked. These included landing of hijacked boats at Badhwar Park, Uttan Jetty and Juhu Beach in Mumbai; an attack at Ratnagiri Port using a hijacked boat and the hijacking of a cargo ship from Mumbai anchorage.

The Indian Navy and the Coast Guard are supposed to be working closely with various State coastal security agencies, but observers say that poor coordination between agencies and inadequate attention paid to the functioning of the system on the ground are just two holes in the system. Coastal police stations often have inadequate manpower or interceptor boats; even when they do, they sometimes do not have enough fuel or funds and lack properly trained personnel for sea operations. Jurisdictions are hazy at the coastal police station level and there is considerable confusion with regard to information sharing between coastal police, the coast guard and the navy. Another report says, "Whatever coordination or information sharing takes place between the three agencies is largely based on personal rapport between the concerned officers. But this rapport has to be institutionalised."

The navy and the government are putting a brave on the Wisdom and Pavit incidents. Some of the reasons they claim that the Pavit went undetected are almost bizarre- they say this happened because the Pavit was reported sunk weeks ago, that her drift path was not covered by radar and that her AIS was off. The government says that new measures to strengthen coastal security have been initiated, including improving surveillance, enhanced patrolling and continuous monitoring of the system.

Maharashtra has a coastline of 720 km, a creek-line of 1,000 km, 16 islands, 2 major and 48 minor ports. It has about 23,000 fishing vessels and about 250,000 fishermen with 631 landing points for them.  These are massive statistics. It will require a sea change in what an analyst calls the security agencies 'land centric outlook' if we are to guarantee the State's coastal security. The fear remains that if the agencies are struggling to secure the sensitive and important Maharashtra coast- that is usually in the spotlight- then the situation elsewhere in India is likely to be worse.

Indian Government restricts entry of old ships to Indian ports.

The Government of India will curb entry of old ships into the country's territorial waters and ports; this was announced by Mr G.K. Vasan, Minister of Shipping in Parliament last week. Vasan said that ships over twenty-five years old would have to meet additional conditions before being allowed entry. The move comes after widespread criticism of maritime policy after the Pavit and Wisdom incidents- and the earlier Chitra-Khalijia 3 collision- in Mumbai.

The minister said that the government's proposal would require that old ships be approved by a classification society that is a full member of the International Association of Classification Societies (IACS) and have adequate insurance coverage for salvage, collision and wreck removal. The destination port must also be notified about the full particulars and other details of the ship at least two days before arrival.  Additionally, an Indian agent must be appointed by either the charterer or ship owner.

Indian ships have apparently been exempted from the Ministry's proposal. Referring to 'about 93 Indian ships over 25 years of age', Vasan told parliament, “They will not be affected as they are all classed with the Indian Register of Shipping which is a full member of the IACS.”

It may be recalled that the Capt. P.V.K. Mohan Committee, constituted by the Shipping Ministry late last year to conduct an enquiry into the Chitra-Khalijia 3 collision, had recommended banning the entry of ships more than 25 years old in Indian ports. More recently, the State of Gujarat was the first to announce a clampdown on older ships after the Mumbai incidents.

Monday, 12 September 2011

Tanker owners get the jitters

Norwegian shipbroker Fearnleys says that VLCC tonnage will grow at 14 percent this year and 9 percent in 2012, if no existing tonnage is scrapped. As tankers lie idle around the world- notably in the Bay of Algeciras, a strategic lay up location- owners are increasingly concerned at analysts' numbers that suggest that the growth in the tanker fleet is way ahead of oil consumption growth in a sluggish global economy. World oil consumption growth projected for this year is just 1.3 per cent; this is expected to increase marginally to 1.8 per in 2012.

They may have much more reason to worry. A recent Lloyd's List report says that rumours are growing that Chinese oil companies will order up to 80 VLCC's that Lloyd's says will “kill the market", adding that "shipbrokers and owners are digesting the gossip and the dire consequences." Analysts say that the impact of the unleashing of this massive tonnage has the potential similar to the impact on the bulker market of the Very Large Ore Carriers ordered by Vale recently; they say it will change the economics of the tanker trade completely. 

With conditions slated to be unfavourable over the next year and a half, tanker owners are already struggling trying to figure out how they will survive the prolonged slump forecast. Andreas Sohmen-Pao, the CEO of BW Maritime admits that the market is “exceptionally weak and earnings are pretty close to zero, while break-even rates are close to $30,000 a day.” BW Maritime may be slightly better placed in these times, having ordered no new vessels since 2007.

Optimists point out, however, that many companies are doing well in the spot market as they take opportunistic calls on the periodic spikes in rates. Others have opted to place their vessels with decent long-term charters, most of which are still profitable. Companies that are suffering more, they point out, are those that have expanded tonnage in recent times, miscalculating tonnage demand in an increasingly fickle market and putting great stress on their balance sheets. Bruce Chan, CEO of Teekay Tankers, recently told reporters that more than half of Teekay's ships had fixed charters over the next year.  “That covers off all of our costs, even if the other ships carry nothing,” he said.

Some other operators are sitting on large amounts of cash. Frontline's John Fredriksen is one of them; he had admitted a year ago that Frontline had a war chest of billions of dollars in cash to take the advantage of any opportunities in a future downturn.

That future may be here soon. As Frontline's CEO Jens Martin Jensen told the Financial Times a few days ago, “Normally you get the best deals in bad markets,” He added, “I think there are some good opportunities now. There are many more coming after the summer.”

If the Chinese order eighty new VLCC's, as Lloyd's rumours suggest, those opportunities may even get bigger.

CAG slams Indian government for indifferent attitude to shipping

The Indian Comptroller & Auditor General’s office (CAG) has forwarded a report to the country's Parliament strongly criticising the government for its failure to promote the growth of the shipping industry. The CAG is constitutionally mandated watchdog set up to promote accountability, transparency and good governance and to independently audit to determine that public funds are being used efficiently as intended. Its latest report on shipping blames government policies for the fact that the share of overseas trade conducted by Indian companies has nosedived in the last six years, falling to just 8% in 2011. This, the CAG says, is despite the fact that overall Indian trade has increased by 34%.

The timing of the report could not have been worse. The government has to deal with the fallout of its proposal to relax Indian Cabotage laws after the Vallarpadam crisis reported earlier. The CAG says now that the main reason for the present state of affairs is that adequate domestic tonnage remains unavailable because of a lack of both access to low-cost financing and infrastructure constraints. It says that foreign ships carry the vast majority of Indian trade, just ten percent of which is carried on Indian bottoms.

“The government did not act promptly to resolve these vital issues, which impacted adversely the growth of the industry,” says the report, which went on to criticise the government for dilly-dallying over representations made by INSA, the Indian National Shipowners’ Association’s, some many years ago, asking for Indian flag vessels to be given preferential treatment. Industry players have long been demanding a level playing field, infrastructure status for shipping and a simpler taxation regime that would reduce the impact of what Indian shipowners see as double taxation, thanks to direct and indirect taxes.

The CAG has been critical of the speed of policymaking by the GOI, saying that the very competitiveness of the domestic maritime industry has been impacted by New Delhi's indecisiveness. "The need to strengthen the Indian shipping industry assumes great significance in view of various recommendations. Overall, the Indian freight bill was USD 16.3 billion (Rs 73,300 crore) and out of this, over 14.2 billion (Rs 63,900) was paid to foreign flags as the mercantile fleet under the Indian flag was only 1.17%," the CAG said. "There is need to expedite action on the above concerns to provide Indian shipping players a level playing field to facilitate them to compete effectively with the global players."

Almost two thirds of the Indian fleet is owned by just five companies, with SCI alone owning a third of Indian tonnage; Great Eastern owns about 17%.  Shipping contributes about 3% to the Indian GDP; roughly 95% of India's trade by volume and 70% by value is carried by sea. However, the Indian share of the freight market remains abysmally low. The CAG says, "No availability of required tonnage was one of the reasons for decline in (Indian) share of Indian trade."

Thursday, 8 September 2011

Indian sailors caught in pirate-navy crossfire, two killed, many injured.

MUSCAT: Two Indian sailors, who were caught in the crossfire during a rescue operation led by the Royal Navy of Oman (RNO) to free a hijacked Indian ship, and a Somali pirate, succumbed to their injuries, on Wednesday. The rescue operation was carried out in the wee hours of Tuesday.

Full story from 'Times of Oman' HERE 

Monday, 5 September 2011

SPVs to raise 35,000 crore for seven new large Indian ports

20 India's Ministry of Shipping (MoS) wants to set up Special Purpose Vehicles (SPVs) to allow 35,000 crores to be raised to execute the setting up of seven new large ports in the country. Orissa, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Maharashtra and Gujarat are expected to get one port project each, with each SPV raising 5000 crore. India presently has 12 major and 176 minor ports. The major ports of Mumbai, JNPT, Kolkata/Haldia, Chennai, Visakhapatanam, Kochi, Paradip, New Mangalore, Marmagao, Ennore, Tuticorin and Kandla will be augmented with these new ports planned across the country.

The move comes as the Shipping Ministry plans to increase capacity of around 3,200 million tonnes by 2020, when forecasts expect total traffic to touch about 2,500 m.t. “These seven ports would be corporatised just like the Ennore Port. They can raise funds on their own initially.. The Ministry can pump in some money or help them with funds though,” a MoS official told reporters.

The process seems to be well underway. “We have requested maritime states to come forward and offer land to develop these big-size ports,” another ministry official said. The Andhra Pradesh government is thought to have shortlisted two locations already.