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Incredible India

Back in August, India’s main port – the port of Mumbai and Jawaharlal Nehru Port hit the headlines when the bulk carrier Khalijia 3 allegedly ran in to the Mediterranean Shipping Co’s containership MSC Chitra without any warning [ due to legal reasons we have to state that this could also be the other way round]. Action was taken immediately and part of the salvage work was the containment of a bunker spill and the recovery of dislodged containers. The facilities at the port partly opened for business, and as a precautionary matter, the India’s Directorate General of Shipping (DGS) ruled that ships could only enter or leave the area under naval escort. Two weeks after the collision the ports were ready to open and resume full operations. And although DGS has indicated that the safety precaution is no longer necessary, full passenger ferry services within the port were not allowed to resume until the beginning of September. According to latest figures from the Federation of Indian Export Organisation the costs of the closure of the port, as a result of the incident, could have cost the country dear – perhaps tens of millions of dollars. There has also been an affect on container traffic within the port. The three terminals at Jawaharlal Nehru Port have a container stacking capacity of around 50,000 TEU and with containers leaving the terminals but new ones arriving, a large number of export containers are piling up at the port. Container Corporation of India has offered to move export containers from Mumbai and Jawaharlal Nehru Port to Mundra and Pipavav ports in Gujarat [and bring back import containers] to relieve the congestion but this would create other problems for shippers and shipping lines.

Visakhapatnam Port
Visakhapatnam Port has, so far, handled 24 million tonnes (mt) of cargo during the current financial year, against 24.7mt during the corresponding period last year, according to Ajeya Kallam, Chairman, Visakhapatnam Port Trust. Kallam said the marginal shortfall was in respect of crude and allied products, export of thermal coal and certain other cargoes. However, he said, there was increase in fertilisers, limestone and container traffic, partly compensating for the loss. The port had handled railway traffic of 13.02mt by end-July, as against 11.48mt during the corresponding period last year, he added. He also said there was a big challenge facing all public sector ports in the country, including Vizag, in view of the many private ports coming up in the country. In Andhra Pradesh, out of 109mt of cargo handled at all the ports in the State during 2009-10, 40% was handled by non-major ports in the private sector. The Vizag port handled 65.5mt during the year, the highest ever in its history. Kallam said that the port authorities are also planning to develop a satellite port at Bhimli, 25km from Visakhapatnam.

Ennore Port
India’s Ennore Port Ltd (EPL) signed a concession agreement with Bay of Bengal Gateway Terminals Pvt Ltd for the construction and development of the Rs 1,407-crore container terminal at Ennore on a build, own and transfer basis. Bay of Bengal Gateway is a special purpose vehicle (SPV) promoted by Spanish groups Grup Maritim TCB and Obrascon Huarte Lain, Lanco Infratech Ltd, India and Eredene Capital Plc, UK. S Velumani, Chairman and Managing Director, EPL, and Mike Dekker, Director, Business Development, Grup Maritim, the lead consortium partner of the SPV, signed the agreement in the presence of the Union Shipping Minister, G K Vasan. The concession agreement is for 30 years, with the construction of the terminal likely to start in January 2011 and a scheduled operation date within 36 months. It is the first terminal project for both Spanish companies in Asia. Velumani said it will be the first container terminal in India with a continuous quay length of 1km designed to handle the largest container ship up to the size of 14,500 TEU and can berth three mainline vessels simultaneously. The terminal will have an annual handling capacity of 1.5 million TEU. A detailed project report is in the making for potential lenders, said an official of Eredene, which has a 22% stake in the consortium. Its equity commitment to this project is around USD34.5 million spread over a 48-month period. The investment will initially be funded through existing cash reserves and then through the raising of additional capital into Eredene. Originally, Ennore port was conceived purely for coal handling for the Tamil Nadu Electricity Board, but is now fast developing as a multi-cargo port. A sum of Rs 6,466 crore has been earmarked for 14 projects at the port. Most of the funds will be brought in by the private sector with the port providing infrastructure in the areas of waterfront, availability of sufficient depth and road and rail connectivity.

Pipavav Port
Earlier this year, APM Terminals Pipavav received vessels from RCL, Wan Hai and Hamburg Sud on their inaugural visits to Pipavav. All the companies mentioned are part of the new RKI-CCI Service. This service, which includes 5 vessels, is run by RCL, Wan Hai, Hamburg Sud and Seacon – a consortium of companies. The RKI-CCI Service will call on APM Terminals Pipavav after calling Gateway Terminals India at Nhava Sheva en route to Colombo. The ports of call for the Service are: Shanghai, Ningbo, Hong Kong, Singapore,
Port Kelang, Mumbai-Nhava Sheva, Pipavav, Colombo, Port Kelang, Singapore, Hong Kong and Shanghai.
The port caters to Gujarat and the landlocked regions of north and north-west India and is connected to this hinterland through dedicated road and rail networks.

Tuticorin Port
Tuticorin Port is steadily increasing its throughput and as of date, the port has handled 9mt and 1.6 lakh TEU in container handling during the financial year 2010-11, registering an increase of 1.8%, according G J Rao, Chairman, Tuticorin Port Trust (TPT). According to Rao the country is facing a number of challenges like the development of infrastructure to meet the economic growth rate and to overcome these problems the port sector has taken many projects under the National Maritime Development Programme. Currently, total capacity of the Indian Major Ports stands at 574.77mt and by implementing various development projects, the country is poised to have a capacity of one billion tonnes shortly. As far as Tuticorin Port is concerned, he continued, the port’s capacity is 22.81mt and the port management has initiated a number of projects. The Inner Harbour Development Programme will increase the port’s capacity to about 45mt by end-2012.  The North Cargo Berth I is also being developed as a captive berth for the NLC. The bid document for the construction of North Cargo Berth-II has been opened recently and the port has got highest revenue share of 52.17%, being the second-highest in all ports in India.

Kolkata Port
India’s Kolkata Port Trust, according to its Chairman, M L Meena, was trying to privatise four container berths, two each at Haldia (No 10 and 11) and Kolkata Dock System (No 4 and 5 in Netaji Subhas Dock).
Giving a detailed account of the various measures being taken by the port authorities to improve the navigability of the Hooghly River, Meena pointed out that the revised estimate of Rs 1,000 crore for the River Regulatory Scheme would be submitted soon to the Ministry for approval. Some of the projects that are in the pipeline in India are based on continued growth in the container sector but BIMCO (The Baltic and International Maritime Council), the world’s largest independent shipping organisation with more than 2,700 members worldwide, has warned of a fall in container rate. And this could result in another [and feared] dip of container traffic. The warning has been sounded despite recovery of the container shipping market in the first half of 2010 when the box rates improved significantly and were almost back at the level seen in the first half of 2008. However, according to BIMCO, the soaring rates could collapse in the face of high supply and reduced demand. The third
quarter peak season might not be strong enough to maintain the good rate levels achieved in the first two quarters as “the average consumer hesitates to embark on a shopping spree at the malls.” The record high peak seasons’ surcharges that were announced for the third quarter of 2010 are having “a hard time trying to materialise”. The steep increase of the active fleet, due to new deliveries and reactivations of the idle fleet, has resulted in surcharges being dropped, reduced or delayed.

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