The Lankans are coming

The Sri Lanka Ports Authority (SLPA) is planning to form a consortium with Indian firms to bid for Indian port projects, newspaper reports say. The SLPA is a government agency responsible for the development and maintenance of all commercial ports in Sri Lanka; insiders are watching the developments with great interest and some suspicion in India. 

 “We are in talks with a few Indian companies to partner us for investing in projects in India. We are interested in many of the port projects that the Indian government is planning such as the fourth container terminal at JNPT and others,” SLPA’s chairman Priyath Wickrama told the Economic Times.

Although discussions are reported to be at the initial stages, some Indian Industry experts are sounding a note of caution, saying that the SLPA- a competitor from a country with close links to China- may try to stymie the growth of the Indian port sector. The SLPA is also mindful of the fact that getting security clearances will be difficult for them. 

“It’s premature at the moment. But, if they manage to bid for projects, they will have to receive clearance from various ministries and that could be a challenge, especially since China is the biggest investor in port projects in Sri Lanka,” an unnamed Indian government official told the newspaper. 

Hemant Bhattbhatt, Director at Deloitte Touche Tohmatsu, added another note of caution, “The new transhipment hub in Cochin and Vizhinjam Port are seen as direct competition to Colombo Port which has been expanding largely due to the cargo from India. In such a scenario, there’s no valid reason for Sri Lanka to invest in Indian port projects as it would only hamper their projects. There could be an ulterior motive behind their intention.”

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USD $1.3 billion deal to create Saudi shipping giant

Bahri, the National Shipping Company of Saudi Arabia (formerly known as NSCSA) announced last week that it had closed a USD $1.3 billion merger agreement with Saudi Arabian Oil Company (Saudi Aramco) and Vela International Marine Limited, a wholly owned subsidiary of Saudi Aramco; this deal will make the new conglomerate the world’s fourth largest owner of VLCCs. Saudi Aramco is the Saudi Arabian national oil and natural gas company based in Dhahran. It is said to have the largest proven crude oil reserves in the world.

All of Vela’s 14 VLCCs will be transferred to Bahri, as will a storage VLCC, an Aframax tanker and four product tankers. Bahri already owns 17 VLCCs, 22 chemical tankers, 4 ROROs, 5 dry bulk carriers, 3 chemical tankers and 6 multi-purpose general cargo ships, including those being built. 

“By creating a new global leader in shipping, Saudi Aramco hopes to build a strong company that can leverage its capabilities in the shipping sector and would meet its growing business portfolio. This company in turn will serve as a national champion that will promote the development of a thriving national maritime industry that creates jobs and other long-term opportunities for the Kingdom,” Saudi Aramco President and CEO Khalid Al-Falih announced.

Bahri has also believed to have signed a ten year contract with Saudi Aramco, under which it will become the exclusive provider of VLCC crude oil shipping services to that company, which will nevertheless manage its own marketing and sales. The two firms will also cooperate elsewhere in the maritime sector. Bahri and Saudi Aramco have appointed financial advisors for the agreement- JP Morgan and HSBC respectively.

As competitors struggle in the dismal market scenario, Bahri has been doing well; this move will make it further consolidate its position on the global stage. Its net profit for the first three quarters of the current calendar year has shot up a staggering 145% YOY already, and stands at SAR 427.4 million (SAR 174.5 million in the same period in 2011). Earnings per share (EPS) are up 247 per cent. 

From Vela’s point of view, too, the merger made sense. “Our long-term strategy is to create a global maritime leader with the commercial and financial strength to provide safe and reliable shipping services that meet Saudi Aramco’s long-term strategic needs,” Vela Chairman Khalid G. Al-Buainain said.

In June, Saudi Aramco and Bahri had jointly announced a non-binding memorandum of understanding (MOU) that would pursue a merger of the fleets and operations of Bahri and Vela International Marine Limited, a wholly owned subsidiary of Saudi Aramco, to create a large and diversified national shipping company. The clear intention, said analysts at the time, was to consolidate in trying times to form a company that would become the fourth-largest owner of VLCCs globally, and create a platform for the continued economic growth and human capital development for Saudi Arabia.

Amidst deadlines, threats and pleas, seafarers wait for deliverance from pirates

                                                 Chief Engineer Bahadur Singh pleading for help

Mumbai, October 10 For one reason or another, the last two weeks have seen a spate of news about seafarers held hostage by Somali pirates. These include the seven ill-fated Indian members of the crew of the Asphalt Venture, who have been held for two years, even after their ship and the rest of the crew were released. A recent YouTube video shows a bunch of emaciated Indian seamen, including the Chief Engineer, pleading to the Government of India and other functionaries for help.

In other connected news, Somali pirates issued a two-week deadline for the payment of a 700,000 dollar ransom for seven Bangladeshi mariners taken in 2010 when their ship ‘Albedo’ was hijacked. The pirates threatened that they would start killing the seamen one by one thereafter. Family members say that pirates contact them regularly to try to pressurise them. The crew is surviving on just two pieces of bread and a litre of unpurified drinking water- hands and legs tied- in an undisclosed location in Somalia. At a press conference in Chittagong, the father of the kidnapped Aminul Islam revealed that pirates had called him the previous day, saying that they would kill his son unless the ransom was paid; the Indian hostage is believed to have been killed some time ago. The families of the hostage Bangladeshi’s are now pleading to Prime Minister Sheikh Hasina for help. 

The Indian hostages from the Asphalt Venture appear pathetic in the video, appealing to political leaders across the spectrum. “Our condition is very bad. I don’t know what action the government is taking. We have been here for a very long time now. We are fed up and mentally tensed. Our health is not good. So we are requesting the honourable President of India, honourable Prime Minister, UPA President Mrs Sonia Gandhi and opposition leader Mrs Sushma Swaraj to please save us. Save our life. We want our release. Please help us,” appeals Chief Engineer Bahadur Singh, who, along with the others, was taken hostage in September 2010. 

"We want our lives, please help us, please save us," he says.

Eight of the crew were released along with the ship in April 2011, but seven Indians were taken ashore. Somali pirates said at the time that they would be set free only if about a hundred Somali pirates held in India were released. The vessel’s Second Officer Unnikrishnan is reported to be diabetic and in urgent need of medicines.

Meanwhile, families of four South Korean sailor hostages of the tanker ‘Gemini’ are pleading with their government to do something to secure their freedom. Captured in April 2011, most of the crew were released after a ransom of $6 million was paid. However, in a development quite akin to that of the Asphalt Venture, the Korean crew were retained, allegedly because of South Korean action after the Samho Jewellery hijack, when that ship was boarded by Korean commandos who reportedly shot dead 8 Somali pirates.

A failed rescue attempt of the Koreans in November was blacked out by the media on Korean government insistence, and it is only now that their plight has become better known. The wife of the tanker’s Chief Officer, Kim Jeong-Sook, said, “We tried to hold this kind of news conference before, but the government and the company told us to stay quiet and just wait. So we trusted the company and the government and just waited.”

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Malacca and Singapore Straits oceanographic model promises significant savings for ships

Applied oceanography specialist Tidetech has developed models for the Malacca and Singapore Straits that promise to save transiting vessels thousands of dollars in bunker costs, not to speak of time savings of up to 12 per cent, depending on vessel type.

Interestingly, the news coincides with the "Co-operative Mechanism on Safety of Navigation and Environmental Protection in the Straits of Malacca and Singapore" meeting held in Singapore recently, where the International Chamber of Shipping had expressed concern about the lack of new large scale navigational charts for the Straits and welcomed initiatives from Singapore, Malaysia, and Indonesia to enhance safety in the region. India was an observer at the meet, and has promised to help with surveys and training, it is learnt.

Tidetech specialises in providing detailed information about tidal and ocean currents and other meteorological data. It says that it has developed a new high-resolution tidal model for the Malacca and Singapore Straits; the commercial model promises to save fuel costs and time for the 70,000 ships that transit the straits each year, and reduce emissions. The model can be integrated into existing ECDIS systems for easy use, or be adapted to specific customer requirements.

Until now, the existing tidal information for the region was limited and based on short-term, single-point observations. Tidetech’s has used bathymetry [depth] data, satellite altimetry information and local observations, which they use to calculate hydrodynamic models using highly-complex equations of motion that govern fluid dynamics.

Tidetech managing director Penny Haire- a navigator herself- said, “By arriving at the optimal time, a ship can benefit from a favourable tide or current through busy, narrow or restricted shipping channels. This means a vessel can reduce speed (or maintain slow steaming speeds) and save fuel… and also means the vessel can avoid having to increase speed to counter adverse current”.

Tidetech focuses on applying ocean current, tidal stream, sea surface temperature and wave forecast data to a ship’s route and speed. It boasts of providing high quality data that improves efficiency and assists customers in making informed decisions.

“Weather routing is an established tool for shipping… oceanographic data goes beyond this and is a significant resource that will add further percentages to bunker and time savings and to meeting environmental obligations… for all types of commercial vessels,” Ms Haire says.

The adjustment of speed to arrive at suitable times at specific locations and therefore gain the advantage of favourable tides is something that Masters have been doing for long, albeit imperfectly. Tidetech’s model promises to fine tune this calculation with precision and data previously unavailable. The resultant optimisation in fuel consumption, along with the other benefits, take on a special meaning in light of the slow steaming phenomenon that is in widespread use today; considerable savings may well result.

“We have run a simulation for vessels steaming between 14kt and 22kt and the difference between slowest and fastest times through the Straits’ amounts to a significant difference. This means time and money is saved and emissions reduced,” said Ms Haire.

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