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Guiding Spirit to Shipping Industry

PORTS

SHIPPING

In association with R L Institute of Nautical Sciences, Madurai, Tamil Nadu.

Jebel Ali Port fulfills UN’s high security standards

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Essar Shipping revenue zooms by 16%

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FEATURE

LOGISTICS

RNI No. TNENG/2012/41759

8/9 Coastal shipping alone can

NEWS

Wednesday, June 5, 2013

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DHL invests Rs. 65 crs. in new multi-user warehouse

Voyage 2 Wave 17

EXIM Bank’s net profit is High profile team accompanies Minister Rs. 742 crs for 2012-’13

EXIM Bank Chairman T. C. A. Ranganathan and Executive Director David Rasquinha addressing Media persons in Mumbai to declare the bank’s annual results.

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MUMBAI

Sagar Sandesh News Bureau

he Government of India’s export finance institution, Export-Import Bank (EXIM), has clocked a net profit of Rs. 742 crores at the end of financial year 2012-13. Chairman and Managing Director T. C. A. Ranganathan declared the bank's results at a Press conference in Mumbai. During the year under review the loan portfolio of the bank went up 20% to Rs. 65, 563 crores. Net profit (profit after tax) jumped 10% to Rs. 742 crores. Net worth of the bank advanced 20% to Rs. 7, 239 crores; the return on capital to the Central Government rose 28% to Rs. 263 crores and the total business expanded by 21% to Rs. 1, 37, 774 crores. The bank was able to maintain a capital to risk assets ratio of 15.28% and Net NonPerforming Assets (NPA) at 0.47% with 80% provision cover. Page 14

TCX Service to call at Kattupalli Port for Imports / Exports 16

substitute trucks & trains

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Armed forces to be modernised, says Defence Minister

Vasan visits Vietnam, signs agreement for maritime cooperation Vietnamese Prime Minister has assured full support to implement this maritime shipping agreement between both the countries

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NEW DELHI

Sagar Sandesh News Service

ith a view to strengthening cooperation in the maritime sector between India and Vietnam, Union Minister of Shipping G. K. Vasan visited the country on a six-day official tour. He was accompanied by a seven-member delegation including Mr. Pradeep Kumar Sinha, Secretary (Shipping); Mr. Vishvapati Trivedi, Chairman, Inland Waterways Authority of India; Mr.Gautam Chatterjee, Director General (Shipping); and Commodore Subramaniam, CMD, Cochin Shipyard. Page 2


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Wartsila gets IMO's MEPC approval 'AQUARIUS EC' ballast water management system

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MUMBAI

Sagar Sandesh News Bureau

arine Solutions Division of European-based Wärtsilä having local operations in India has received the final approval status for its' AQUARIUS® EC' Ballast Water Management System from the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC). The approval was granted at the MEPC’s 65th session held at the IMO headquarters in London recently. AQUARIUS® EC is a modular ballast water management system providing a safe, flexible and economical process for the treatment of ballast water, said a Media release. Mr. Joe Thomas, Director, Wärtsilä Ballast Water Management Systems, stated: “Gaining IMO final approval status has involved an extremely stringent review and investigation

Final approval is required for systems using an active substance and is based upon examination of full scale prototype test data and all required supporting documentation on aspects such as risk and safety to the ship, crew, general public and the environment

process, and we are naturally very delighted that the AQUARIUS® EC Ballast Water Management System has successfully met all the requirements of the process. This represents an essential and extremely significant milestone in offering the marine industry a safe, flexible and extremely efficient means of treating ballast water.” The basic approval had been granted in 2012. The release added: “The approval submission was taken into consideration as part of the MEPC 65’s agenda covering “harmful aquatic organisms in ballast water”. Final approval is required for systems using an active substance and is based upon examination of full scale prototype test data and all

required supporting documentation on aspects such as risk and safety to the ship, crew, general public and the environment”. The documented information was reviewed and approved by a joint panel of experts from the Scientific Aspects of Marine Environment Protection ballast water working group. The application was submitted to the IMO by the Dutch Human Environment and Transport Inspectorate. A key element of the final approval submission was an investigation covering the impact of treated ballast water on coated and uncoated materials. A full type approval certificate is expected by the end of July this year.

Vasan visits Vietnam...

From page 1 Guiding Spirit to Shipping Industry

In association with R L Institute of Nautical Sciences, Madurai, Tamil Nadu.

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ADVISORY EDITORIAL BOARD Mr Aswin K Atre, Consultant, Shipping and Seafaring Capt. S S Jairam, Master Mariner, Director, Searland Management Services (P) Ltd. Dr B K Saxena, M.Sc., Ph.D., President, Institute of Marine Engineers (India). Mr G K Ramakrishnan, C.Eng., M.I.Mar.E., Sr. HSE Consultant, Kuwait Oil Company, Kuwait. Capt. Naveen Passey, Managing Director, Wallem Shipmanagement (India) Pvt Ltd. SAGAR SANDESH - Maritime Tabloid English Weekly Newspaper Printed by Dr R Krishnamurthy. Published by Dr R Lakshmipathy on behalf of (Owner) Professional Publications (P) Ltd, “Sriram” , 27, Sathyasai Nagar, Madurai - 625 003. Printed at Standard Press, TVR House, Dinamalar Avenue, Madurai - 625 016. Published at “Lakshmi”, 21, Sathyasai Nagar, Madurai - 625 003. RNI No. TNENG/2012/41759, Postal Registration No. MA/140/2012-2014. Licence No. TN/WPP-115/SR/2012-2014

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Shipping Minister tours Hong Kong

Wednesday, June 5, 2013

The Minister held official talks with his counterpart Mr. Dinh La Thang, Minister of Transport of the Socialist Republic of Vietnam. Both the Ministers discussed ways and means to strengthen cooperation in the maritime sector between India and Vietnam especially in areas such as shipping, ship-building and repair, ports management, ports security and safety, connectivity, human resource development and training and inland waterways. After the discussions, the Ministers signed the Maritime Shipping Agreement between India and Vietnam. They instructed senior officials on both sides to meet in the coming months to evolve a concrete roadmap for cooperation in the maritime sector. Mr. Vasan also extended an invitation to the Vietnamese Minister to visit India at his convenience, which was accepted by the Vietnamese side. Later, Mr Vasan called on Vietnamese Prime Minister Nguyen Tan Dung. During interaction, Mr. Dung had assured full support to implement this maritime shipping agreement between both the countries.

TUTICORIN

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Sagar Sandesh News Service

nion Minister of Shipping G. K.Vasan visited Hong Kong for three days from May 21. He was accompanied by Mr. R. Srinivasa Naik, Director, Ministry of Shipping; Mr. R. Srinivasagopalan, Executive Director, Indian Ports

Association; Mr. R. P. S. Kahlon, Chairman, Kolkata Port Trust; and Mr. S. Natarajan, Chairman, V. O. Chidambaranar Port Trust, Tuticorin. During the visit, Mr. Vasan and his team of officials had discussions with Prof. Anthony Cheung Bing-leung, Secretary for Transport, regarding various avenues of association by the Hong Kong Government in port development projects in India towards port capacity augmentation and logistic improvements. Later, Mr. Vasan had an interactive session with the members of Ship Owners Association, Hong Kong, and explained the capacity augmentation achieved by the Indian ports in recent times and the business opportunities available in India and requested the members to make use of the Indian ports for mutual advantage.

Odisha effort to boost marine products exports

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PARADIP

Sagar Sandesh News Service

n a bid to give boost to exports of marine products, Odisha is going to have a common preprocessing centre for marine products in Balasore district. The processing centre would be the first of its kind to come up in the State. The foundation stone of the centre was laid by Mrs. Leena Nair, Chairman of Marine Products Export Development Authority (MPEDA), at Balaramgadi in Balasore district. The centre is being built at a cost of nearly Rs. 6 crores by the Sea Food Exporters Association of India (SEAI), Odisha region, and MPEDA. Mrs. Leena Nair said: “A large chunk of marine products exports from Odisha comes from the shrimps but it has been stagnating for the past two years. Exports from the State can be increased through aquaculture. The State Government has notified a land lease policy. This policy is very critical for the aquaculture sector. But there must be monitoring at the level of the Chief Secretary to oversee the implementation of this policy.” Mrs. Nair said the project aims at creating hygienic conditions of international standard for pre-processing like scaling, skinning and other value additions to marine products. The centre will be ready by mid-2014. “The project has a potential of employing nearly 1,500 skilled

rural women. Once its construction is completed, women having skill of processing sea foods will be employed here. Besides, it would help local fishermen and fish farmers to get a better price of their marine products,” she maintained. Till date, the exporters have been sending shrimps and fish for processing outside. After this unit starts functioning, the preprocessing work will be done here itself which will ultimately increase the value of the products due to reduction in wastage and transportation cost. Speaking on the export scenario, she said while nearly 21, 000 tonnes of marine products were exported in 2011-12, it was 23, 320 tonnes in 2012-13. “Last year, as 28 containers were detained by a few shrimp importing countries which were reluctant to purchase citing use of antibiotics, the exporters and farmers had a tough time. But this time, it has been resolved and we hope the export will go up,” she said. National Vice-President of SEAI Tara Ranjan Pattnaik said the State Government has announced the land lease policy which would help farmers go for shrimp farming in a big way. “Under the policy, Government land up to 15 acres can be leased out to individual farmers, corporate houses and cooperative societies. We have demanded the policy to be implemented as soon as possible, he added.


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IN & AROUND PORTS

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Gopalpur Port begins trial operation

“If the highest aim of a captain were to preserve his ship, he would keep it in port forever” - St. Thomas Aquinas

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PARADIP

Sagar Sandesh News Service

opalpur Port in Odisha’s Ganjam District has begun its trial operation as an all-weather port ahead of its full-fledged commissioning very shortly. The experimental commercial operation was given a kick-start on May 26 with cargo handling of 7,500 metric tonne of ilmenite, a sand mineral product of Indian Rare Earths Limited (IREL). The cargo was exported to South Korea through a ship, said port officials. Once the private sector port begins operation, it would be the latest addition to the fast expanding port sector in this coastal State. Besides Paradip Port Trust, one of the Major Ports of the country, Dhamra Port, a joint venture of Tata and L & T, is in operation in the State. "The trial run has been a success. We are confident of the full-fledged run of the port within a month’s time," said Director (Operations) of Gopalpur Port Limited (GPL) M. M. Moharana. The nascent port armed with a sole berth would have cargo handling capacity of 3.5 million ton per annum to begin with. Later it would go up manifold with further expansion. Work of infrastructure projects like power distribution system, railway and road connectivity is steadily progressing. A blueprint

has been drawn up for building three more berths for coal, iron ores and multi-purpose cargo handling operation like shipment of iron ore, IREL products, other minerals and foodgrains.

As many as 13 ports were lined up to begin operation on Odisha in the wake of boom in mining sector. But the slump has jeopardized the future of these ports.

The port had got the clearance for its operations from the Odisha State Pollution Control Board (OSPCB) and the Customs Department on May 14. The State Government had awarded the Rs. 1200-crore port development project to Orissa Stevedores Limited (OSL), Sara International Limited (SIL) and Hong Kong-based Noble Group in 2008. The Noble Group had, however, pulled out of the project about 2 years ago. On the other hand the slump

Wednesday, June 5, 2013

in mining activities following restriction imposed by Odisha Government has begun to cast adverse effect on port sector. The annual cargo handling in Paradip and Dhamra Port is hardly encouraging with the iron ore trade virtually coming to a grinding halt since the past 2 years. As many as 13 ports were lined up to begin operation on Odisha in the wake of boom in mining sector. But the slump has jeopardized the future of these ports. The selected sites where the ports are proposed to come up are at Subarnarekha mouth, Bahabalpur, Bichitrapur, Palur, Bahudamuhana, Balaharchandi, the Barunei Muhana, Chandipur, Astaranga, Jatadharimuhana, Talsari and Chudamani. However, the port sector has failed to make much headway with construction work yet to resume in any of the port projects, according to official sources.

Cochin Port celebrates Port Day on May 24

K KOCHI

Sagar Sandesh News Service

erala’s Major Port - Cochin Port - celebrated “Port Day” on May 24 to commemorate the entry of the first ship into the Cochin Harbour. The construction of the inner harbour from 1921 is deemed as the transformation of Cochin as modern and safe port. The first ship -S.S. PADMA - entered the inner harbour through the widened and deepened Cochin Gut on May 26, 1928. The Organizing Committee has also proposed to commemorate the entry of the first ship into the inner harbour by observing May 26 of every year as ‘Cochin Port Day’. According to Cochin Port Trust officials, the objective of the observance is to instill a sense of oneness and inspire collective morale among the port fraternity. As part of the celebrations, the port presented coveted awards to high performers in export and import trade through the port. Outstanding performance by the port personnel during the previous financial year was also recognised during the commemorative meeting. Further, an exhibition was organised at the cruise passenger facilitation centre in the port premises. Besides, Lakshadweep passenger vessel ‘Lakshadweep Sea’ was thrown open to public view. It attracted many, including schoolchildren, and its crew members explained the visitors how a vessel navigates through the sea. A seminar and an open forum for those engaged in port-related business were also held as part of the fete.

Jebel Ali Port fulfills UN’s high security standards

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NEW DELHI

Sagar Sandesh News Service

lobal marine terminal operator DP World announced on May 27 that its flagship Jebel Ali Port has become the first port in the Middle East Region to achieve the United Nations Department of Safety and Security (UNDSS) Certificate, a benchmark for security management systems. The certificate was awarded following an inspection visit to Jebel Ali by a team of UNDSS experts who evaluated the security measures implemented by DP World, UAE Region, with particular focus on emergency response plans, security awareness for staff, security briefing for security personnel and documentation procedures. Mr. Mohammed Al Muallem, Senior Vice President and Managing Director,

DP World, UAE Region, received the certificate from two senior UNDSS officials, Mr. Tamer Hammouda, Security Advisor, and Mr. Mosa Elayan, Security Associate, in the presence of DP World, UAE Region officials from the security departments. Commenting on the achievement, Mr. Mohammed Al Muallem said: “Ensuring the safety and security of our people, our customers and assets is integral to DP World’s commitment to safeguarding the national interests of the UAE. We are

honoured to receive this important certificate from the United Nations Department of Safety and Security and take this opportunity to reaffirm to all our stakeholders that we will spare no efforts to keep Jebel Ali the safest port in the world.” Mr. Tamer Hammouda stated: “Ensuring 24x7 safety and security is a big challenge for any organisation, and particularly so for a regional logistics hub such as Jebel Ali with all its complexities. We are impressed by the high levels of safety and security we found implemented at Jebel Ali Port, even exceeding standards set by UNDSS in some areas. DP World is a deserving candidate for this recognition.” Mr. Saeed Suhail, Executive Director, Heath, Safety, Environment and Security, DP World, UAE Region, pointed out: “The UNDSS certificate is an important

benchmarking exercise undertaken to evaluate our security preparedness against global standards and industry best practices. Our commitment to providing a secure workplace is an ongoing process, which is complemented by continual improvement of security performance that is consistent with DP World’s security management standards.” DP World Jebel Ali is also certified under the independently audited ISO 28000 security management standard, which is being rolled out throughout the DP World’s global network. DP World is certified as a partner in the CustomsTrade Partnership against Terrorism (C-TPAT) initiative by US Customs and Border Patrol – the only international port operator to have achieved this recognition. The UNDSS oversees the UN’s security management system and its work includes setting the standards for best practice security policies and operational procurement systems.


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SHIPPING

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Wednesday, June 5, 2013

Maersk Line wins prestigious IMO 2013-themed award

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NEW DELHI

Sagar Sandesh News Service

.P. Moller - Maersk won the IMO 2013-themed award: “Sustainable Development – IMO's contribution beyond Rio+20” in support of the IMO's theme for World Maritime Day for 2013, at the 25th annual Seatrade Awards ceremony held in London recently. Mr. Jacob Sterling, Head of Environment & CSR at Maersk Line, received the award from IMO Secretary-General Koji Sekimizu on behalf of A.P. Moller - Maersk. The award

Shreya Shipping revenue goes up MUMBAI

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Sagar Sandesh News Bureau

olkata-based shipping and logistics company Shreya Shipping Lines (SSL) had recorded a consolidated turnover of Rs. 204.32 crores for March 2013 against the Rs. 167.19-crore turnover reported in March 2012. The consolidated profit after tax stood at Rs. 12.63 crores for the year under review when compared to the consolidated profit after tax of Rs. 5.38 crores during the year-ago period. On a standalone basis, SSL posted Rs. 57.28-crore turnover during the end of March 2013 vis-à-vis the turnover of Rs. 52.12 crores registered at the end of March 2012. The substantial increase in the performance of the company can be attributed to the timely decisions of acquiring additional tonnage during the year. With these acquisitions, the total tonnage increased by almost 90% and fleet age rationalised ensuring smooth operations. The Board of Directors of the company at its meeting has recommended a 6% dividend on 2.19 crore equity shares of Rs. 10 each subject to the approval of shareholders, says a filing to Nse by SSL.

“He who loves practice without theory is like the sailor who boards ship without a rudder and compass and never knows where he may cast.” - Leonardo da Vinci

ceremony was held at the historic Guildhall, London, with over 350 of the maritime industry’s key players celebrating the outstanding contributions made over the last year in shipping. In his acceptance speech, Mr. Jacob spoke about the importance of sustainability in shipping: “Sustainability is becoming an integral part of the way we do shipping and how we have to do shipping in order to be successful. We need to be energy-efficient not only to reduce CO2, but also to save costs and thereby improve profitability. We need to be a

Mr. Jacob Sterling

responsible global citizen not only because it is the right thing to do, but also because it helps us foresee and mitigate risks to the business.” “We also see it as a great

Mr. Jacob. “In 2012, Maersk Line reached its 2020 target of reducing CO2 emissions by 25% per container (TEU) from its benchmark 2007 levels – eight years ahead of time. Maersk Line is now targeting a 40% reduction in CO2 per container (TEU) by 2020.” The Seatrade Awards programme promotes significant contributions and pioneering achievements from the industry. The independent judging panel chaired by Mr. Koji Sekimizu opportunity to help our selected the winners of the 2013 customers reach their awards. sustainability targets,” continued

Essar Shipping revenue zooms by 16%

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MUMBAI

Sagar Sandesh News Bureau

uias-promoted Essar Shipping Limited (ESL) reported a 16% increase in consolidated revenue at Rs. 3,298.08 crs for the financial year 2013 against the consolidated revenue of Rs. 2,854.51 crs posted in FY 2012. Earnings Before Interest Taxation Depreciation and Amortization (EBITDA) jumped 15% to Rs. 865.06 crores in 2013 when compared to the EBITDA of Rs. 752.50 crores last year. The consolidated net profit in the financial year stood at Rs. 35.80 crs as against the consolidated net profit of Rs. 36.83 crores reported in the previous financial year. The shipping business has faced challenges globally due to the depressed markets and freight levels. The robust performance of the oil fields services business has

enabled the company to maintain its consolidated profitability in line with the previous year. During Q4 FY 2013, the company registered a consolidated revenue of Rs. 782.29 crores and EBITDA of Rs.173.15 crores. For the corresponding period last year the company had registered revenues of Rs. 845.21 crores and EBITDA of Rs. 248.27 crores. For the year ended March 31, 2013, the sea transportation

business registered a revenue of Rs. 1,584.12 crores in FY 2013, up 24% from Rs. 1,280.28 crs for the corresponding period in the previous year and EBITDA of Rs. 356.58 crs as against Rs. 457.19 crores in the previous year. The reduction in EBITDA was largely on account of lower realisations due to reduced freight rate levels. Oil fields services business revenues increased by 63% yearon-year to Rs. 678.35 crores in

Top honour for ZIM Our motto is We Cross Oceans For You

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MUMBAI

Sagar Sandesh News Bureau

srael corporation-promoted ZIM Integrated Shipping Ltd has achieved top honours in the Lloyds List Asian Shipper Sentiment Survey. ZIM scored at the top end of all categories, and scored 7.2, the highest among 10 carriers included in the survey. ZIM ranked first on five categories, including consultation on schedule changes, on-time shipments, container availability, space

availability on chosen vessel and overall performance. Lloyds List reports a “seismic shift in carriers’ performance” in the 2013 Shipper Sentiment Survey, published on May 3. The report rated ZIM as above average in most categories in 2013. Improving Customer Service is a keystone of ZIM’s strategy, with much effort and substantial resources channeled towards improving service performance through better procedures, staff

FY 2013 from Rs. 416.44 crores for the corresponding period in the previous year. EBITDA for the year increased by 93% to Rs. 438.41 crores from Rs. 227.25 crores. The logistics business revenue stood at Rs.1,035.61 crores for FY 2013 against Rs.1, 157.79 crores for the corresponding period in the previous year. Capt. Anoop Sharma, Director, & CEO, Sea transportation Business, stated: “During the year the company has taken delivery of all its six mini cape dry bulk carriers built at STX Shipyard. The company is now fully focused on managing operating costs effectively. Together with specific measures for interest cost reduction being pursued, these measures will strengthen the performance of the company in the coming months and help increase profitability.”

training and other measures, commends the survey about ZIM. Mr. Nissim Yochai, ZIM VP-Customer Relations, said: “Our motto is We Cross Oceans For You, and this recent survey shows that we mean it. We are glad to see that our efforts during the last two years bear fruits, and that customers recognize our relentless efforts to provide them with excellent service at all levels.” ZIM group operates its fullyowned subsidiary in India called ZIM India at Mumbai. The Indian subsidiary has presence in 16 locations across the region including major seaports. Besides head office at Mumbai, the company has offices in the port cities of Cochin, Gandhidham, Kolkata, Tuticorin and Delhi.


SHIPPING

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Wednesday, June 5, 2013

A sailing ship is no democracy; you don't caucus a crew as to where you'll go anymore than you inquire when they'd like to shorten sail. - Sterling Hayden

Pipavav inks Rs. 595-cr. offshore vessel deal with European client

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MUMBAI

Sagar Sandesh News Bureau

KIL Infrastructure Ltd.promoted Pipavav Defence and Offshore Engineering Company Ltd (PDOECL) has secured a Rs. 595-crore worth of specialised offshore vessel orders from an European client, says a Bse filing. Besides the Rs. 595-crore order, the multicrore deal further envisages supply of two more specialised offshore ships valued at Rs. 1,200 crores by Pipavav. This is a significant development since the offshore division of the company is constantly increasing the

clientele in the global market. Overall global market’s need for similar specialised offshore ships is nearly $10 billion per year. Pipavav intends to increase its market share in the offshore segment substantially over the next four quarters, adds a Pipavav filing to Bse. The company has capabilities for fabrication, construction of offshore platforms, SBMs, rigs, jackets, vessels for upstream oil and gas

sector both in India and abroad. The offshore vessel builder has entered into international collaborations with global corporations to strengthen its product and service capabilities. PDOECL has struck a partnership with Singaporebased Semcorp Marine for harnessing the latter’s advisory services on yard layout and manufacturing processes. It has also sealed a deal with US-

3 emerging trends hold key to global shipping firms

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MUMBAI

Sagar Sandesh News Bureau

hree emerging trends falling US oil imports, the return of some manufacturing capacity to rich industrialized nations and advances in vessel design could significantly change the competitive landscape for global shipping companies and affect their creditworthiness over the next five years, says Moody’s Investors Service in a report on the sector. “The credit impact arising

from each of these trends is likely to vary according to industry segment - crude oil tankers, containers and dry bulk - creating the potential for a few winners and many losers,” says Marco Vetulli, Vice President, Senior Credit Officer in Moody’s Corporate Finance Group and author of the report.

“Rated companies adversely affected by these trends that do not proactively manage risks are likely to face rising operating and financial pressures that could eventually hurt their ratings.” Moody's notes that the ongoing shift in trade patterns owing to falling US oil imports has credit-negative implications for the entire tanker industry as it is likely to depress freight rates. Crude oil tanker companies, such as Overseas Shipholding Group Inc. that operates large fleets of different types of vessels typically used on long-haul routes are the most vulnerable, although OSG's US Flag business will benefit. Companies that operate smaller, more flexible tankers, such as Sovcomflot JSC and Navios Maritime Acquisition Corp. are likely to fare better. The partial re-shoring of manufacturing capacity back to rich industrialised nations and rising income levels in Asia are altering patterns in the trade of semi-finished products, with

based Northrop Grumman Overseas Services Corporation towards indigenous production of defence goods and signed an MoU with Swedish company SAAB Dynamics to enter army and air force segments. Pipavav's long-term strategy is to develop commercial shipbuilding, offshore fabrication and servicing, Naval war-ship building and ship repair. The company is adopting this strategy to insulate itself from the risk of relying on one market segment alone, and also allows for profitable business opportunities in each segment to be grasped as market conditions dictate.

credit implications mainly for the container segment. Moody's expects that companies with operations on Asia to US trade routes, such as CMA CGM S.A. and HapagLloyd Holding AG could be adversely affected as transportation volumes on these routes are likely to fall. Furthermore, such companies might need to rebalance some of their capacity from long-haul trade to smaller vessels more suited to intra-Asia trade. Conversely, companies, such as Wan Hai Lines Ltd. that already operate mainly on intraAsia routes are likely to benefit from the increase in cargoes. Tightening environmental regulations and high fuel costs are strong incentives for ship owners to invest in the new generation of "greener" vessels to cut operating expenses, but lack of financing is a constraint. Although this trend is common to all shipping sectors, it represents a particular challenge for the dry-bulk

GE Shipping to buy product tanker MUMBAI

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Sagar Sandesh News Bureau

he Great Eastern Shipping Company Limited (G E Shipping) has placed an order to buy a Medium Range (MR) product tanker of about 47,000 dwt. As per the contract, the 2004-built vessel is expected to join the company’s fleet during Q2FY2014, stated a Press release from the company. G E Shipping's current fleet stands at 31 vessels comprising 22 tankers (9 crude carriers, 12 product carriers and 1 LPG carrier) and 9 dry bulk carriers (1 Capesize, 3 Kamsarmax, 4 Supramax and 1 Handymax) with an average age of 9.6 years aggregating 2.50 mn dwt.

industry, where the average fleet age is quite high and the current financial condition of most players is fairly weak. However, Moody's would expect Navios Maritime Holdings Inc. to be less adversely affected by this trend than other dry-bulk carriers because it has a relatively young and efficient fleet.

Japanese conglomerates are likely to be affected to a lesser extent. While not immune to the global trends, the two rated Japanese companies, Nippon Yusen Kabushiki Kaisha and Mitsui O.S.K. Lines Ltd., should fare better than some of their peers because of their sheer size, diversification and solid relationships with banks.

Paragon Shipping sees light at the end of the tunnel

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NEW DELHI

Sagar Sandesh News Service

aragon Shipping Inc., a global shipping transportation company specializing in dry bulk cargoes, has announced its results for the three months ended March 31. Commenting on the results, Mr. Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, said: "Year to date, the dry bulk shipping market continues to be challenging with weak charter rates, but we are finally starting to see the light at the end of the tunnel as the order book has declined dramatically and deliveries of new buildings will slow down. For the first quarter of 2013, we reported Adjusted EBITDA of $3.2 million and an Adjusted Net Loss of $2.9 million, or $0.26 per share. On an average, we operated 12.7 vessels with a utilization rate of close to 100%. On Jan. 29, 2013, we took delivery of the M/V Priceless Seas and we ended the quarter with a fleet size of 13 vessels with an average age of 7.1 years." Mr. Bodouroglou concluded: "Following the successful completion of our debt restructuring, we have significantly reduced our debt amortization for the next two years and have achieved relaxation of several of our financial and security covenants. We believe that we have set the foundation for the company to emerge stronger when the dry bulk market recovers."


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Wednesday, June 5, 2013

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sneak peek at the progress of Indian coastal shipping until now evokes no elan or enthusiasm. As of Dec. 31, 2012, coastal shipping segment comprised 118 cargo carrying vessels with a total DWT of just 0.671 million and 33 passengercum-cargo vessels with a total DWT of 27, 300. The reasons for the stunted growth of the sector include high cost at major ports, shallow draft at non-major ports, multiplicity of non-tariff barriers, inadequate road and rail connectivity to ports, impediments to import and operation of coastal vessels and, in general, a lack of awareness of coastal shipping among cargo interests. Maritime cabotage, or the bar on foreign vessels carrying cargo on the Indian coast except by special dispensation, is also claimed by many to be a reason. As if that were not enough, there are user concerns like frequency, reliability and consistency of services, availability of door-to-door multimodal services, acceptable multimodal transit time, seamless integration of transport modes and administrative simplicity that are waiting to be addressed by the administrators and executive authorities. A compelling case for coastal shipping stems from the overutilisation and congestion of roads and rail infrastructure for freight movement. India has over 4 million km of roads, the second largest network in the world. Some 65% of domestic freight is moved by road, yet most of our roads are narrow and unsurfaced. National Highways, which are motorable with relatively greater ease, account for a mere 1.7% of the network but carry as much as 40% of the road freight. Road transport carries huge hidden cost not only to road users but also to society at large like accidents, air and noise pollution and climate change. Over 1, 40, 000 lives were lost in road accidents in India in 2011. The Indian rail network too is one of the world’s largest, with 115,000 km of track over a route of 65,000 km and 75,000 stations. The railways carry 30% of domestic freight annually. However, the network is overburdened, the condition of bridges en route poor and signalling system outdated, restricting average train speeds to around 30 kmph. Given this backdrop, the recent CII conference dealt with way forward for coastal shipping with emergence of actionable ideas like incentivizing coastal shipping on par with other modes of transportation and using small nonmajor ports extensively for coastal shipping needs to be encouraged. Distinguished speakers poured out their ideas and suggestions to drive the growth of the sector.

Demand-side incentives

S N Srikanth Senior Partner, Hauer Associates

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ith our congested road network freight shift from road to waterways has become imperative. To boost coastal transportation excessive paper work needs to be simplified and user concerns need to be addressed. Government of India (GoI) should evolve European Union Marcopolo type of funding that has a total earmarked capital expenditure of 400 million Euros and is in the second phase of implementation (2007-

2012). GoI could also take cue from US marine programme that aims at creating marine highway corridor with sops like concession on coastal vessel and coastal cargo. With dedicated policies and programmes the share of freight movement by inland and coastal waters stands at 16% in US and 40% in Europe against the low 8% in India. We need to forge Centre-State partnership in dredging and development of berth equipment on BOT basis. We need to introduce demand-side incentives than supply-side incentives. Demand-side stimulus goes like income tax break to registered multimodal transporters. Carriage of cargo by coastal ship has several inherent advantages over road and even rail. It conserves energy, since ships are more fuel efficient than trucks. It is safer; ships pollute the air a lot less than trucks. Coastal shipping also reduces congestion on land and can cater to huge parcel sizes.

Japanese family model

Capt. Subash Kumar Marine Advisor to JNPT

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t’s all family that operates coastal transportation in Japan. Wife as chief officer and husband as captain move cargoes like bunker, fresh water, eatables from port to port. Large number of smaller ships, say 500 tonners, are deployed in coastal plying. In India we don’t see such trend. With 7, 517 km long coast line dotted with 6 major ports on the eastern coast and 6 major ports on the western coast in addition to 187 non-major ports the mode of water transportation in India for both cargo and passenger is quite a major phenomena. We need to link the coastal and inland waterways.

Kerala takes giant leap

James Varghese Principal Secretary, Govt of Kerala

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on-availability of land for road and rail development spurs the State to go for coastal shipping. The State is blessed with 650 km coastline that is key to decongest roads and reduce automobile fuel emissions. We found coastal shipping to be a logical alternative to road transportation as it is possible to move large parcel size at low shipping cost, low external cost, lower recurring expense and is environmental friendly. Kerala, being a consumption State, is largely dependent on other states for suppliers for whom the cost of transportation is a key factor. A study found that logistics cost went down by 40% to 50% when a cargo was moved from Punjab to Kerala via Kandla Port.

We are planning cement terminal at Azhikkal, all-weather port at Ponnam and cement terminal at Kollam Port for movement of the commodities via coastal cargo. Cargoes like cashew, coir and minor minerals could be diverted to coastal from road. We are working out sops to wean away cargo from road to coastal like rebate on port charges to use coastal shipping. Soft loan is under consideration for ship builders involved in building coastal vessels.

Different transport modes

Gautam Chatterjee DG Shipping

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t’s sad to note that absence of integrated transport policy has led to competition among different modes of transportation viz., road, rail and coastal. Road owns 60% of traffic, rail 35% and coastal at 5% to 8%. The compelling case to go for coastal is comparatively safe, cost effective, reduces accident, etc. Coastal shipping could make rapid strides if issues like wharfage, berth hire, pilotage, custom duty and quality manpower are addressed. Seamen prefer foreign going vessel jobs to coastal shipping as the latter is not lucrative in terms of perquisites. As 40% of operational expenditure in shipping goes to bunkering, coastal shipping should be provided with duty exemption. In the multimodal matrix road and rail connectivity linking cargo generating centres should be strengthened to build sizeable volumes for coastal shipping.

The obstacles

Capt. Ashok Srivatsava CEO, Allcargo Logistics Ltd

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ultitude of factors including cabotage, manning, policy related issues, service tax, bunker prices, port infrastructure, port hassle, absence of return cargo and mindset that all impede the growth of coastal shipping. There should be a strict cabotage policy with large parcels moved by foreign going vessel and small parcel by Indian flags. Dearth of manpower is due to short shuttle, less space and relatively lesser perquisites. Engineering graduates with short-term bridge course could be harnessed to man the coastal ships. On the policy side, there is lack of integrated long-term policy framework among various stakeholders like rail operators, customs house agents, stevedores and vessel operators. There should be a one integrated transportation policy to move cargo from point A to point B. While other modes of transport enjoy up to 75% waiver on service

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Wednesday, June 5, 2013

tax the abatement for shipping is at 50%. Cost of bunker is 40% high due to the duty regime and is not on par with the railways. As a result the bunker cost works out to Rs. 75,000 to Rs 80,000 per metric tonne. Coastal shipping needs place for survey and repair works. Since anchorage of vessels is not possible at most of the major ports survey and repair become difficult task. Charterers contracting those vessels deduct charter charges as it fails to meet the prescribed speed guarantee limits. Tariff at non-major private port is a dampener in terms of cost. There should be a separate area in the port region to set up jetty to anchoring and repair. It is pertinent to mention here that ocean transportation is losing out on last mile and first mile connectivity. The tipping point for the sector is in the slew of measures like building up of berth, rail, road connectivity, dedicated warehouses, financial incentive and separate CDC certification for seamen to spur the growth of coastal shipping.

Bank lending

John Mathews Director, Lots Shipping Ltd.

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n the funding of the river-sea vessel banks cite Baltic Dry Index (BDI) ratio in denying the loan request. But BDI has nothing to do with coastal vessels. Coastal shipping finance should be considered akin to truck financing by the banking sector. The industry should take the initiative of mentoring few companies that largely demonstrate the fact that coastal shipping could lower the logistics cost by 2% and marginally boost the GDP by 1%. Public sector companies could come forward to give preference to coastal shipping. At present cement and petrochemicals, besides cattle feed and construction material, dominate coastal shipping. Standardisation of river-sea vessel at ‘Nano’ cost would bring cheers to both investors and operators.

Cost of operation

Anil Devli CEO, INSAA

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t present the cost of operating a coastal vessel is greater than the value of the cargo laden on the vessel. The diesel is subsidised to the extent of Rs. 11.75 where there is no subsidy in place for bunker that amounts to 60% of the operating cost. The Government of India should put coastal shipping on an even keel with road transportation. The Ministry of Shipping should allocate land towards port that remains as integral part of the supply chain management. The

port user should be given hinter land support. It should further talk to port-based industries for pre-haulage and post-haulage thereby reducing the haulage costs.

Long-term finance

S K Shahi CMD, SKS Logistics Ltd.

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he coastal shipping finance model works to the sector’s disadvantage in India as the loan tenure is for a maximum period of 8 years only, where as in US the loan tenure goes up to 25 years with nominal rate of interest. Long term financing model leaves surplus cash in the vessel operators hand who would go ahead to procure more vessels thereby not diluting the quality of the fleet. The berthing time period stretches up to about 10 days that adds to the loan repayment cost.

The challenges

Ramamurthy Nety Senior Vice-President (Ports & Shipping), Ambuja Cements Ltd

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oastal shipping for us helps in carbon foot print reduction, zero pilferage losses, factory fresh high throughput of cement, shipment of large volume in lesser transit time, besides green logistics and decongesting of rail and road. Our success is attributable to captive cargo, captive shipping and dedicated freight corridor from plant to port. The common challenges faced by the industry in coastal shipping include heavy siltation in some of the minor ports, lack of break waters and most of the river navigations are not feasible due to low over-bridge height. Non-availability of return cargo also deters the prospects of some of the minor ports.


LOGISTICS

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Allcargo appoints new CFO

DHL invests Rs. 65 crs. in new multi-user warehouse

“The line between disorder and order lies in logistics…”

By setting up world class infrastructure in India we continue to meet the increasing logistics and warehousing needs of our customers enabling them to effectively expand their businesses

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MUMBAI

Sagar Sandesh News Bureau

Mr. Jatin J Chockshi

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MUMBAI

Sagar Sandesh News Bureau

r. Jatin J Chockshi has been appointed as Chief Financial Officer of the Bselisted and Nse-listed Allcargo Logistics Ltd with effect from May 1. He is a Chartered Accountant and Company Secretary by profession and has vast experience of more than 28 years in the field of Finance and Accounts, particularly in logistics and related industries. He joined the organisation in March 2001 and during his tenure of more than 12 years he had held various senior positions such as Chief Financial Officer, Chief Executive Officer (NVOCC) and Chief Investment Officer of Allcargo and its group companies, before appointed as CFO of the company, says a company Press release.

Wednesday, June 5, 2013

lobal contract logistics solutions major DHL has pumped Rs. 65 crores investment into new multi-user warehouse in Luhari, Delhi. The new facility was launched on May 21, says a Media release. Spread across 3, 20, 000 sq. ft the facility will meet the growing customer demands from the consumer, retail and automotive sectors. It is strategically located in North India, which contributes 25% of the country’s GDP with an average annual growth rate of 16.42% with large investments being made by the Government in infrastructure development. P & G, one of India’s largest and fastest growing consumer goods company is DHL’s anchor customer at the multi-user site at Luhari. “We see great value in utilizing this new multi-user warehouse with its innovative solutions which helps us manage costs with faster delivery and reliability. DHL’s unique insights and global experience of managing consumer supply chains allows us to optimize and simplify our end-to-end supply chain”, said Mr. Gurunath Nayak, Supply Chain Head-India, Procter

- Sun Tzu

& Gamble. DHL Supply Chain also manages the logistics activities at P & G’s manufacturing plant at Mandideep, Madhya Pradesh, and has been successfully collaborating with P & G for over 8 years. Last year DHL Supply Chain had announced an investment of INR 685 crores to strengthen logistics infrastructure in India to set up multi-user sites in 8 cities and augment its transport fleet. Since then, the company has moved swiftly to execute these investments by adding 6, 70, 000 sq ft of warehousing space with its two multi-user sites in Mumbai and Luhari. Plans are on track for more such facilities in Bengaluru, Ahmedabad and Chennai later this year. Oscar de Bok, CEO – South and Southeast Asia, DHL Supply Chain, stated: “India is a significant market for us. This facility is part of our ongoing investment in infrastructure development to keep pace with the rapid growth of the logistics market in this country. By setting up world class infrastructure in India we continue to meet the increasing logistics and warehousing needs of our

customers enabling them to effectively expand their businesses.” Complementing its first multiuser warehouse in Bhiwandi, Mumbai, the new 3, 20, 000 sq ft facility is DHL Supply Chain’s second multi-user site in India and part of its ongoing infrastructure investment in the country. Built to world class standards with state-of-the-art features customized to suit specific requirements of customers, the facility can consolidate, store shipments and re-distribute them to several distribution channels in the region. With the impending introduction of GST, DHL Supply Chain has invested in this largescale shared facility with multiple users at Luhari, to assist corporates in Gurgaon and the surrounding areas, consolidate their smaller sites which will no longer be economically viable. The new facility at Luhari has been designed to provide customers safe, compliant and consistent integrated logistics solutions to create competitive advantages by improving end-toend supply chain solutions and cost efficiencies. Mr. Vikas

Anand, Chief Operating Officer, DHL Supply Chain-India, pointed out: “The rapidly growing industrial belt around Luhari provides tremendous potential for us to strengthen our customer footprint in the region. We have developed core expertise in our global network for key focus sectors and with this facility we are now in a position to replicate these best practices for local execution.” The new facility is strategically located close to NH 8 and NH 71, and offers great potential for transportation of goods from western and southern India to the north while simultaneously connecting Punjab and Himachal Pradesh with further connectivity to the entire National Capital Region of Delhi. Apart from the standard FTL service, DHL Supply Chain has successfully introduced a unique approach, “carry more for less”, which develops customized delivery solutions for efficient distribution of products across the country. This includes, inbound to manufacturing, milk runs, customized vehicle design, a dedicated fleet, improved handling and network designing.

Less than half-a-dozen of projects including the 8.5-km dedicated corridor connecting highway to captive jetty at Muldwarka Port on the Saurashtra coast of Gujarat would enable the company to shift the entire transport to the port by its own road ensuring seamless flow of despatches to coastal markets using jetty at the port. The jetty at Muldwarka Port accounts for 60% of total despatches from Ambujanagar plant. This project is billed to address some serious concerns of road safety.

Likewise, Dumas Channel the shorter sea route to BCT Surat explored in 2011 - is being used extensively resulting in transportation cost savings in coastal freight. More to say, the railway siding at Bhatinda grinding unit made operational in mid January 2013 will help ACL to optimise transportation costs for the unit and reduce dependence on road transport. In order to strengthen logistics capability and extend reach to customers, a new railway siding project has been initiated at

Rabriyawas unit in Rajasthan. An automatic wagon loading system at Farraka unit in West Bengal, being built at a cost Rs. 32 crores, is nearing completion. This will reduce the cost and improve the efficiency of material handling. A new Bulk Cement Terminal (BCT), nearing completion at Mangalore with operations expected in the near future, would help the company expand its footprints in southern markets in India, according to the annual report released recently by the company.

Ambuja’s logistics projects to mitigate transportation costs

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MUMBAI

Sagar Sandesh News Bureau

ujarat-based Ambuja cements Limited (ACL) is betting big on the recently commissioned logistics projects to contain cost and improve efficiency. As freight forwarding costs make around 29% of the total operational cost of the company that spiked to 18% in absolute terms year-on-year in 2013, a couple of projects that went on stream in the review period is hoped to mitigate the transportation and freight costs.


NEWS

Wednesday, June 5, 2013

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Armed forces to be modernised, says Defence Minister

“News is what somebody somewhere wants to suppress; all the rest is advertising.” - Lord Northcliffe

Naval officers advised to treat their subordinates with dignity

Defence Minister A. K. Antony (front) accompanied by Chief of the Naval Staff Admiral D. K Joshi; Flag Officer Commanding in Chief Southern Naval Command Vice Admiral Satish Soni and Vice Admiral Pradeep Chauhan, Commandant-INA (left to right), at the passing out parade at INA, Ezhimala in Kerala.

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MUMBAI

Sagar Sandesh News Bureau

he first batch of 60 Navy officer cadets, who joined the Indian Naval Academy, (INA) Ezhimala in Kerala, passed out on May 25 after successfully completing their flagship B.Tech course, along with 242 Officer Cadets of the Indian Navy and Coast Guard at a grand passing out parade presided over by Defence Minister A.K. Antony. In his address, Mr. Antony said: “INA had made considerable progress in every facet of naval training and could be compared with the best in the

world. More infrastructure projects are in the pipeline for modernising the armed forces which would ensure best training facilities”. He advised the future naval officers to treat their subordinates with dignity and character. Speaking to the Press, he said the Ministry has ensured full utilization of the funds allotted to it and that strengthening of infrastructure on the borders would continue unhindered. He added that a formalized architecture for cyber defence in the Armed Forces is on its way. The passing out cadets belonged to the four passing-out courses of

the Spring Term 2013 of INA, the 84th Indian Naval Academy Course (INAC) - the Flag Ship Course-, the 84th Integrated Cadet Course, the 15th Naval Orientation Extended Course and the 16th Naval Orientation Regular Course. The B. Tech course was started at INA when it was commissioned in January 2009, by Prime Minister Manmohan Singh. This followed a farsighted decision by the Navy to make Engineering degree, the basic qualification for the Officers of its Executive branch, acknowledging the pivotal role technology plays in the art of modern warfare. Hitherto only Officers of the technical branches needed to have an engineering degree. The President’s Gold Medal for the cadet adjudged first in the overall order-of-merit of the INAC course was awarded to Eby P Henry. Chief of the Naval Staff Gold Medals for the cadets adjudged first in overall order-ofmerit for the Naval Orientation Extended Course and the Naval

Orientation Regular Course were awarded to Anshu Bhau and Arun Kuriakose respectively. Archana Sharma was awarded the Flag Officer Commanding-in-Chief Southern Naval Command Gold Medal for being adjudged the best woman trainee of the course. Among those who passed out were 23 women cadets of the Navy and the Coast Guard. Admiral D.K. Joshi, Chief of the Naval Staff, Vice Admiral Satish Soni, Flag Officer Commanding in Chief, Southern Naval Command, and a galaxy of distinguished personalities including foreign military attaches witnessed the ceremonies with the parents of the cadets. The majestic parade culminated with successful cadets marching past the Academy’s Saluting Dais (known as the Quarterdeck), to the traditional notes of ‘Auld Lang Syne’, the poignant farewell tune. Navy and Coast Guard Dornier aircraft flew past the venue in formation. On

completion of the parade, the ceremony of ‘Shipping-ofStripes’ was held wherein proud parents of the passing out cadets affixed the rank insignias, popularly known as ‘Stripes’, on the shoulders of their wards, symbolising their transformation from cadets into military leaders. The Defence Minister also paid homage at the INA War Memorial after the parade and inaugurated a state-of-the-art library named Panini, after the Sanskrit grammarian of yore. Indian Naval Academy (INA), Ezhimala, located on the Malabar Coast of Kerala, has a sprawling campus of about 2, 600 acres overlooking the Arabian Sea with backwaters, mountains and sea front - an ideal training ground for India’s future mariners. Currently more than 1000 cadets are being trained here with the strength slated to be increased incrementally commensurate with the needs of a growing Navy. Vice Admiral Pradeep Chauhan is the Commandant of INA.

ICS publishes Annual Review of shipping developments

Mr Masamichi Morooka

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NEW DELHI

Sagar Sandesh News Service

he International Chamber of Shipping (ICS) has published its latest Annual Review of maritime policy and regulatory developments, in advance of its Annual General Meeting, which is being hosted by the Norwegian Shipowners' Association in Oslo from June 5 to 7.

The 2013 Annual Review, which covers the wide-ranging scope of ICS's activities as the world's principal international trade association for ship operators, can now be downloaded free of charge from the homepage of the ICS website. Printed copies are being distributed via ICS's 36-member national shipowners' associations, which collectively represent all sectors and trades and over 80% of the world merchant fleet to the international regulatory bodies that impact on shipping, including the International Maritime Organization (IMO). The ICS Annual Review focuses on a number of key issues for 2013. These include the need for policy makers to balance the importance of protecting the environment with shipping's economic sustainability, the ongoing debate about the regulation of CO2 emissions, the entry into force of the ILO Maritime Labour Convention, developments with respect to piracy and hostage taking and discussions to ensure safe and pollution free ship operations in the Arctic (about which the ICS Board will join transport and shipping Ministers from around the

world for a summit in Oslo on June 5, hosted by the Norwegian Government). Concise but comprehensive, the ICS Annual Review also addresses developments in maritime safety, labour affairs, manning and training, maritime law and insurance, as well as shipping and trade policy concerned with the maintenance of the 'level playing field' and open shipping markets.

regulators during this first year in office has been the need for greater focus to be given to the economic sustainability of shipping, backed up by evidence of the continuous improvement of shipping's environmental performance. The protection of the environment must always remain a priority, but the prevailing economic situation requires that a degree of pragmatism is displayed as a plethora of new environmental regulations is implemented and enforced." Mr. Morooka added: "The impressive ability of ICS to reach consensus on difficult and complex issues has been something of a revelation to me, as has the very wide range of topics in which it is necessary for ICS to be involved on behalf of shipowners worldwide."

The protection of the environment must always remain a priority, but the prevailing economic situation requires that a degree of pragmatism is displayed as a plethora of new environmental regulations is implemented and enforced - ICS Chairman

In his introduction to the 2013 Annual Review, ICS Chairman Masamichi Morooka, remarks: "The key message which I have been communicating to


PIRACY

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Wednesday, June 5, 2013

Piracy attack reports not Joint effort to fight correct, deplores SAMI against Somali

Despite a reported drop in overall attack figures, Somali piracy still poses a significant threat as criminals remain heavily armed and eager to hijack

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NEW DELHI

Sagar Sandesh News Service

he Security Association for the Maritime Industry (SAMI) has raised concerns about the level of piracy reporting globally, and more particularly in the Indian Ocean High Risk Area (HRA). The concerns emerged as a result of a workshop held by SAMI in Hamburg, during which ship owner representatives and company security officers were encouraged to discuss their security concerns. Despite a reported drop in overall attack figures, Somali piracy still poses a significant threat as criminals remain heavily armed and eager to hijack. According to the feedback

It is piracy, not overt online music stores, which is our main competitor.

gained, the figures showing a reduction in Somali piracy mask the true numbers – in fact the statistics which show a fall in the region are somewhat misleading – while others call them “downright wrong”. It seems that the curse of “under reported” pirate attacks or misunderstood data are the next major issues to dog the shipping industry, and there are calls for an urgent shake up in the way that reports are both generated, captured and promulgated. It also seems that problems have emerged as the threshold for reporting has undergone a significant change over the past 18 months, due to the “dumbing down” of reports and a failure to report. Why is reporting becoming such a toxic issue? According to SAMI, there are two immediate issues which could be driving the under-reporting phenomena: One is the fact that ship owners are increasingly hesitant about reporting. Another issue is the complication of verifying incidents as piracy incidents. It seems that defining a pirate attack is one thing, but actually recognising one is something else altogether. As the use of shipboard armed

guards has increased, pirates are a little more subtle in their approaches, quite literally. Guards frequently report far more “probing incidents” in which potential pirates maintain their cover by not overtly attacking. When is a skiff manned by a group of pirates or just fishermen looking for their next catch? The answer is dictated by their ultimate actions so actually statistically accounting for them is incredibly hard, says SAMI. Increasingly vessels in the High Risk Area (HRA) are subjected to incidents that appear to be coordinated small boat piracy approaches but, because they choose not to ultimately attack, they are not necessarily classified as piracy or a suspicious approach. Unfortunately the lack of definitive figures makes it hard to ensure that the right security resources are brought to bear on to the piracy problems, says SAMI. While there are concerns about complacency and security fatigue creeping in, it is perhaps understandable when the statistics are mired in uncertainty. This makes it doubly important that shipping has proper, clear and defined data on which to make decisions.

need our piracy consensus meetings where we can cooperate on responses to the threat to ensure the safety and security of our seafarers,” CMA CGM, MSC, Maersk Line and Hamburg Süd said in a joint statement. At the piracy consensus meeting, CMA CGM, MSC, Maersk Line and Hamburg Süd agreed that the international community’s efforts to fight the problem have contributed significantly to the improvement in the situation seen today, especially the naval presence in the Gulf of Aden and the pursuit of appropriate legal frameworks to ensure pirates are prosecuted and held responsible for their crimes have contributed hereto. “We highly appreciate the efforts by the international community to combat piracy in the Gulf of Aden and the Indian

Ocean and the success achieved. The continued commitment by the international community with a strong presence and mandate is critical to sustain the current low level of piracy activity,” CMA CGM, MSC, Maersk Line and Hamburg Süd said. They have put the guidelines in the Best Management Practices to use on a daily basis and have gained significant experience over the past years on what adds value to their ship protection. “The Best Management Practice (BMP) has been a key contributor towards reducing the risks of piracy. To remain relevant, a revised BMP must focus further on the risk assessment element as the key methodology to determine appropriate anti-piracy measures. In our experience, a ‘one-sizefits-all’ approach does not

Best Management Practice reduces risks of piracy

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NEW DELHI

Sagar Sandesh News Service

MA CGM, MSC, Maersk Line and Hamburg Süd representing 40 per cent of the world container shipping industry have met to discuss the piracy threat towards international shipping. The meeting focused on piracy in the Gulf of Aden, the Indian Ocean and West Africa. The cooperation between CMA CGM, MSC, Maersk Line and Hamburg Süd includes information exchange on security measures, piracy policies and procedures as well as coordination with relevant stakeholders. “Although we have seen a decline in piracy activity over the past year, piracy continues to be a concern for the shipping industry, and therefore we still

- Steve Jobs

pirates effective

This year, there have been no hijackings. But if anyone in the network slows down operations, the pirates will strike again NEW DELHI

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Sagar Sandesh News Service

he fight against Somali pirates has been so effective that they haven't been able to mount a successful hijacking attempt since the beginning of 2013, stated a top official at the Atalanta EU NAVFOR. "The combined efforts exerted by EU NAVFOR, the combined task force, the United Kingdom Marine Trade Operations and the NATO Navy; the Best Management Practices followed by the vessels and the precautions taken by those engaged in the shipping industry have helped reduce piracy activity in the region," according to Commodore Jorge Novo Palma, Force Commander of Operation Atalanta. According to EU NAVFOR data, there were only 11 suspicious events and three attacks. Somali pirates had hijacked 46 ships in 2009, 47 in 2010, 25 in 2011 and five in 2012 within the region.

provide the most effective and efficient solution against the threat. Each protective element must be evaluated in response to the risk and the appropriate level and mix of security methods must be used,” CMA CGM, MSC Maersk Line and Hamburg Süd concluded. Hamburg Süd, CMA CGM, MSC and Maersk Line continue to support proposals for regional capacity building to address the issue such as a regional coast guard and further commitment by the international community to address the root causes of piracy ashore.

"In addition to thwarting pirates' attacks, we are also protecting World Food Programme (WFP) shipments to Somalia. In 2013, the WFP aims to bring humanitarian assistance to an estimated population of 1.56 million in Somalia. Since 2008, the EU Naval Force has escorted 171 WFP shipments to Somalia, ensuring the safe delivery of more than 800,000 tonnes of aid, with a 100 per cent success rate for protection," the Commodore claimed. "The regional navies, especially the Sultanate's Navy, work in close cooperation with us," the Commodore added. EU NAVFOR operates in an area of operation that covers the Southern Red Sea, the Gulf of Aden and a large part of the Indian Ocean, including the Seychelles. The area of operation also includes the Somali coastal territory as well as its territorial and internal waters. This represents an area of some 2 million square nautical miles (approximately 3.7 million square kilometres). The composition of EU NAVFOR changes constantly because of the frequent rotation of units, and it varies according to the monsoon seasons in the Indian Ocean. However, it typically comprises some 1,200 personnel, 4-7 surface combat vessels and 2-4 maritime patrol and reconnaissance aircraft. "This year, there have been no hijackings. But if anyone in the network slows down operations, the pirates will strike again. The present scenario is reversible," remarked Pedro Almeida e Silva, Lieutenant PRT Navy and Public Affairs Officer at Operation Atalanta EU NAVFOR. On March 23, 2012, the Council of the EU extended the mandate of Operation Atalanta to December 2014. At the same time, the Council extended the Area of Operation to include the Somali coastal territory and internal waters. A budget of Euro 14.9 million has also been set apart for the common costs of the mandate until December 2014.


NEWS

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Wednesday, June 5, 2013

“News is what somebody somewhere wants to suppress; all the rest is advertising.” - Lord Northcliffe

Centre urged to intervene immediately

Trade Unions demand SCI to make use of Vallarpadam Terminal M KOCHI

Sagar Sandesh News Service

aking a strong case for an urgent intervention by the Union Government to help the ailing Cochin Port, the Cochin Port Joint Trade Unions have appealed to the Parliamentary Standing Committee on Transport to persuade the Shipping Corporation of India (SCI) to use Vallarpadam Terminal for its transshipment requirements. In a memorandum submitted to Mr. Sitaram Yechuri, Chairman, Parliamentary Standing Committee on Transport, Tourism and Culture, New Delhi, during his visit to Cochin Port on May 25, Mr. M. Mohammed Haneef, Chairman, and Mr. C. D. Nandakumar, General Convenor of the Trade Union Forum, categorically told the committee that nearly 3, 40,000 TEUs of Indian containers (during 2012-13 period) were handled by SCI through Colombo. Speaking to Sagar Sandesh, Mr. Mohammed Haneef said: “The very purpose and intention of setting up ICTT at Vallarpadam is to provide transshipment services to containers originating in India. But to our dismay, still SCI is using Colombo as its transshipment hub.” “We fail to understand the logic behind SCI’s decision to use Colombo for this purpose bye-passing Cochin ICTT (the dream project of Government of India) – not making use of the concessions, privileges and world class facilities in the ICTT,” he added.

COCHIN PORT IN DIRE STRAITS

It was with high expectations and aspirations that the Cochin Port will flourish in its activities after commissioning of ICTT Vallarpadam, but it is sad to say that the trans-shipment terminal is far behind in its functioning as a container trans-shipment hub of India. It was claimed by the Government that this would be the one and only terminal of its kind in India which will facilitate the container trans-shipment requirement of the country. The ICTT was commissioned in February, 2011 and thus two years have completed. It was targeted that in 2013, nearly 7, 50,000 TEUs would be handled in ICTT, where as the actual TEUs handled was only 3, 33, 073. The royalty received (33.30%) by Cochin Port Trust is just Rs. 53.39 crores. The actual amount received was

only Rs. 39.22 crores, excluding the deferred royalty and TDS. During the year 2012-13, the maintenance dredging expenditure alone was Rs. 122.58 crores. Prior to the commissioning of ICTT, the normal maintenance dredging expenditure of Cochin Port was only Rs. 30 to 35 crores per annum. This clearly revealed that there is a huge gap between income and expenditure for maintaining the ICTT functional by Cochin Port. As per Concession Agreement between Cochin Port Trust and India Gateway Terminal Private Limited (IGTPL/DP World) signed on Jan. 31, 2005, Cochin Port was contractually obligatory to ensure the road connectivity, rail connectivity and 14.5metre depth channel which were put in position by Cochin Port Trust.

The very purpose and intention of setting up ICTT at Vallarpadam is to provide trans-shipment services to containers originating in India

Though the Cochin Port Trust is in a severe financial crunch, for the sake of attracting mother container vessels which are now operating between Colombo and Indian major ports, the Cochin Port has granted rock bottom concessions on Vessel Related Charges (VRC) ranging from 30% to 86% making the port finance more vulnerable. Realizing the gravity and seriousness of the subject, the trade unions functioning in Cochin Port Trust jointly approached the Government of India for financial assistance for maintenance dredging expenditure, which has multiplied due to ICTT. But the Government has not so far responded positively. It is pertinent that even in America and European countries, the responsibility of maintaining the ship channel is vested with the respective nation. In India,

Kolkata Port Trust is being subsidized for annual maintenance dredging by Government of India. The Vallarpadam ICTT, being a strategic national project and serving the nation for competitive, self reliant and efficient EXIM trade, Cochin Port Trust may be extended with financial assistance for maintenance dredging at least for a period till Cochin Port ‘reaches a financially break-even stage’.

TAMP PURVIEW

The 11 Major Ports in the country which are governed by Major Port Trust Act, 1963 are under the regime of TAMP. The 12th Major Port Ennore being a corporate port under Company's Act it is out of the purview of TAMP. The Standing Committee had recommended in its 170th report that "within the vicinity of the Major Ports other ports should not be allowed to come and if at all it is necessary those upcoming ports should be under the control of the concerned Major Ports". Ignoring the very purpose and objective of the recommendation, the Government of India invariably allowed a non-major port to come up within the vicinity of the Major Ports. These non-major ports do not come under the purview of the TAMP regime and labour laws and labour standards are not applicable, but enjoying the different concessions offered by the respective States and not so much so accountable too. About 200 such ports functioning in the Indian Coastal Zone are posing a serious threat to the very existence of the existing Major Ports by way of unhealthy and cut-throat competitions. The latest statistics revealed that out of the cargo handled, 46 % of the cargo is handled by these non-major ports. It is clear that the cargo is snatched by non-major ports from the Major Ports encashing the unhealthy competitions. At this juncture, this may be remedied by scrapping the TAMP mechanism or the non-major ports should also be brought under the TAMP Regime.

AWARD OF PROJECTS

It has become the practice in Indian Major Ports in the era of liberalized economic policies that almost all the major projects in Port Trusts are being executed through BOT, BOOT, PPP and DBFOT modes. The experience clearly revealed that these are highly detrimental to the national economy, interest of the ports and interest of the workers. When awarding these projects, the responsibility of ensuring basic infrastructure facilities spending several thousand crores is

shouldered either by the Port Trust or the Public Exchequer. The share of the licencee of the project will normally be meagre and the beneficiary of the project will become the licencee or the operator. Vallarpadam ICTT is a classical example. Therefore, execution of various projects under these modes giving water front, valuable port land on nominal rent basis for long period is to be discouraged. The social negative impact of these practices is multi-farious throwing out the public property in the hands of private MNCs or NCs, resulting in tremendous job loss to the workers, exploitation of labour by various means, manipulation of labour laws and pushing the existing ports into serious financial crisis.

FINANCIAL RESTRUCTURING

It has been explained by the management of Cochin Port that its request for availing short term loan/over draft from the nationalized banks has been turned down by the banks, stating that the repaying capacity of the Port Trust is under stake and dubious. The reasons cited by the financial institutions, according to port management, is that the loans availed by the Cochin Port Trust from the Government of India for constructing infrastructure facilities in various stages including Plan Schemes from 1937 to 2010 amounting to a sum of Rs. 258.14 crores including interest and penal interest has not been repaid. It is an admitted fact by the GoI that it was not a deliberate action by the Port Trust in nonrefunding the availed loan amounts. The various projects executed through the loans have not given justifiable returns because of various reasons. However, it is understood that a proposal for the financial restructuring and writing off the existing loans is under consideration of the Government of India as per the request of the Cochin Port Trust. Considering the vulnerable and pathetic existing financial position of Cochin Port, especially in the light of the reasons caused due to under-performance of the ICTT and adding burden of dredging cost on Cochin Port, the request of the Cochin Port is justifiable. “We request and hope the Standing Committee would go through the grievances raised in the memorandum and do the needful with a view to helping the Cochin Port to come out from the present financial crisis,” both the leaders appealed.


ExIm Trend

EXIM Bank’s net profit...

14

Developed countries and advanced developing countries must open their markets for products from the developing world, and support in developing their export and import capacity. - Anna Lindh

From page 1

Lines of Credit (LoC) aggregating US$ 833.59 million were extended to support export of projects, goods and services from India. 167 LoCs, covering 75 countries in Africa, Asia, CIS, Europe and Latin America, with credit commitments aggregating US$ 8.57 billion have been extended till date, while a number of prospective LoCs are under negotiation. The Project Export Contracts supported by the bank in 2012-13 amounted to Rs. 24, 255 crores, which were secured by 47 companies in 38 countries. Buyer's Credit - National Export Insurance Account (BC-NEIA): The bank has sanctioned an aggregate amount of US$ 248 million (equivalent to Rs. 1, 346 crores) for projects valued at US$ 291 million (equivalent to Rs. 1, 580 crores) under BC-NEIA and given in-principle commitments for supporting 51 projects aggregating to US$ 5.14 billion. Overseas investment assistance was sanctioned to 49 corporates aggregating Rs. 4, 228 crores for financing their overseas investments in 20 countries. The bank has so far provided finance to 436 ventures set up by 352 companies in 71 countries. Aggregate assistance for overseas investment amounts to Rs. 29, 280 crores.

RESOURCES/TREASURY

The bank raised borrowings aggregating Rs. 38, 569 crores in 2012-2013, comprising rupee resources of Rs. 17,012 crores and foreign currency resources of Rs. 21, 557-crore equivalent. The bank is rated investment grade, on par with the country's Sovereign rating, i.e. Baa3 by Moody's, BBB- by Standard & Poor's, BBB- by Fitch Ratings and BBB+ by Japan Credit Rating Agency (JCRA). The bank's rupee debt instruments are rated AAA by CRISIL and ICRA. EXIM Bank became the first ever Indian entity to be included in the Emerging Market Bond Index. The bank issued 5-year US$ 500 million and 10year US$ 750 million Eurodollar bonds at the finest pricing, leveraging the EMBI inclusion. In 2012-13, the bank became the first Indian entity to tap the Australian dollar market with a 5year AUD 200 million bond issue. It also became the first Indian entity to issue 5-year Singapore Dollar denominated bonds (SGD 250 million). The bank launched a second Uridashi Bond issue of US$ 170 million equivalent (a bond denominated in a foreign currency and sold directly to Japanese household investors) in three different currencies viz., Japanese Yen, Mexican Peso and Turkish Lira. Exim continues to be the only Indian entity accepted in the Uridashi market. During the year, the bank secured a 20-year loan of € 150 million from the European Investment Bank to support projects that contribute to climate change mitigation. The bank also began drawals under a US$ 100 million loan from Asian Development Bank, to be used to support SMEs and SME clusters in the less developed states for technology upgradation.

GRASSROOTS BUSINESS INITIATIVES

The bank supported Tangail Tantujibi Unnayan Samabay Samity Ltd., a weaver's cooperative which manufactures and exports handloom products; a trust - Kala Raksha - producing hand embroidered garments, accessories etc.; Industree Crafts Private Ltd., an organization producing handicraft and handloom products to improve their export capability. The bank supported several NGOs, Self-Help Groups (SHGs) and artisans to provide new opportunities that would positively impact the lives of a large number of people associated with them, thus contributing towards social, economic and cultural upliftment, women empowerment, employment generation and capacity building. The bank organized a Design Development and Training workshop for women artisans in developing creative and modern designs for coconut shell crafts. Workshops were also organized on Design Sensitization, Design Development Training Phase II for Bidar Bidari Youth Mandal, an SHG; Packaging, Forwarding and Finance for Successful Marketing and Exports, Quality Control, Branding and Packaging for Jharcraft, a Jharkhand Government undertaking. The workshops aimed at creating quality products to tap international markets and helping these organizations in terms of marketing, brand building and generating business. The bank, in partnership with World Craft Council, also organised "EXIM Bank - WCC International Craft Film Contest" to support students working in the field of handicrafts. During the year, the bank entered into a Memorandum of Understanding with National Institute of Design to provide training on design interventions, product development and advisory services for documentation, entrepreneurship, marketability and branding. The bank also entered into a Memorandum of Cooperation with the Rural Technology and Business Incubator, an incubator cell in IIT-Madras to evaluate and support organisations, at their nascent stage of development, which works towards improving rural livelihood.

NEWS IN A NUT-SHELL

Wednesday, June 5, 2013

10 ships under detention in UK ports

T

he Maritime and Coastguard Agency announced that 10 foreign flagged ships were under detention in UK ports during April after failing Port State Control inspection. There were four new detentions during April and six vessels remained under detention from previous months. Out of these eight were registered with a flag state listed on the Paris MOU white list, one was registered with a flag state on the grey list, none were registered with a flag state on the black list, one was unregistered and none were registered with a flag state that was not included on the Paris MOU white, grey or black lists.

IFFCO to import 8 lakh tonne of potash

I

ndia’s largest fertiliser co-operative, IFFCO, plans to import around 8 lakh tonne of potash during the financial year 201314. The company's import of the fertiliser reached rock-bottom levels in 2012-13 on high global prices and sluggish local demand. India meets 100% of its domestic requirement of muriate of potash (MoP), a key fertiliser, by way of imports. Last year, the country failed to contract potash as IFFCO, the world's second-largest importer of the fertiliser, had built sufficient stocks. We are likely to import around 7-8 lakh tonne of the fertiliser during the year,” said Mr. U. S. Awasthi, Managing Director of IFFCO.

Eurozone trade remains weak

E

mpty containers and a decline in outgoing port traffic suggest Eurozone trade remained weak in the first quarter of this year, although overall volumes declined at the end of last year, according to European ports data. Total container traffic, measured in standard TEU container units and not seasonally adjusted, edged down 0.3% in the first three months across seven Eurozone ports that provide quarterly results, a marked improvement from the 4.2% drop in the fourth quarter of 2012. However, many ports reported larger declines in outgoing container traffic, while a few cited an increase in the amount of empty containers being handled.

Converting containers into shelters

SOUTH - SOUTH & REGIONAL COOPERATION

EXIM Bank signed two multilateral financial cooperation agreements with other member banks of the BRICS (Brazil, Russia, India, China and South Africa) nations, viz. BRICS Multilateral Infrastructure Co-financing for Africa; and BRICS Multilateral Co-operation and Co-financing Agreement for Sustainable Development. The bank concluded a detailed study for the SAARC Development Fund (SDF), which is the umbrella financing mechanism created by the South Asian Association for Regional Cooperation, and proposed a strategy for the SDF in terms of its operations, direction, portfolio of products and also a longer term plan of getting a multilateral status and expanding its resource base with a view to reviving and promoting intra-regional projects in the South Asia region.

S

hipping line Safmarine has been recognised for its 21-year commitment to community development. Safmarine received the South African Maritime Industry's Commitment to CSI Award for its Containers-in-the-Community programme which uses decommissioned shipping containers for community development purposes. The award recognises the efforts of those within the maritime sector who reached beyond their own structures to uplift, empower and skill fellow South African citizens. Safmarine has assisted community-based organisations who have identified shipping containers as a quick, sustainable solution to their infrastructural needs, by providing over 8000 containers for projects ranging from job creation to crèches, adult education centres and schools.


Atulya Misra assures to address woes of granite exporters & handling agents Wednesday, June 5, 2013

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The Chennai Port management organised a ‘Trade Facilitation Meet’ in its premises on May 24 with the granite block exporters and handling agents Half shift gang system for finishing vessels also from June 1

M

CHENNAI

Sagar Sandesh News Bureau

r. Atulya Misra, Chairman, Chennai Port Trust, has assured the granite block exporters and handling agents that their grievances would be appropriately dealt with at the right time. Replying to queries raised by the granite block exporters and handling agents during a ‘Trade Facilitation Meet’, organized by the Chennai Port Trust management in its premises on May 24, as part of the port’s direct interaction with port users, he instilled hope and confidence in their mind that they need not worry about the weighment bridge issue, as the port would take immediate steps to put up one such facility for granite block export and handling.

He also announced that a proposal to create one full rake common user siding at black yard has been put on a fast-track mode and once the facility is in place, it will help the port to attract more and more GB exporters to Chennai Port. Over a dozen big players from the sector, who had attended the open meeting, listed out their grievances, related to export of granite blocks, in crystal clear terms and appealed to the port management to look into their genuine demands to make the trade sustainable and profitable. Initiating the interactive session with exporters and agents, Mr. P. C. Parida, Deputy Chairman, Chennai Port Trust, spoke about the facilities the port has for moving granite blocks (GB). He also explained the port’s

CUSTOMS EXCHANGE RATES (with effect from May 17, 2013)

S.No.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Indian Rupees equivalent to one unit of foreign currencies will be as follows :

CURRENCIES

IMPORT

EXPORT

CURRENCIES

IMPORT

EXPORT

Australian Dollar 55.05 53.55 Bahrain Dinar 149.75 141.35 Canadian Dollar 54.50 53.15 Danish Kroner 9.65 9.35 EURO 71.80 70.00 Hong Kong Dollar 7.15 7.00 Kenya Shilling 67.60 63.50 Kuwait Dinar 197.70 185.95 New Zealand Dollar 45.65 44.45 Norwegian Kroner 9.55 9.25 Pound Sterling 84.50 82.50 Singapore Dollar 44.70 43.55 South African Rand 6.10 5.75 Saudi Arabian Riyal 15.05 14.20 Swedish Kroner 8.35 8.10 Swiss Franc 57.50 56.05 UAE Dirham 15.35 14.50 US Dollar 55.30 54.35 The rate of exchange of Indian rupees equivalent to hundred units of foreign currency are as follows :

S.No.

1.

Japanese Yen

54.40

53.00

We are not responsible for any mistake. ALL RATES ARE PROVISIONAL. The rates in these columns are only meant for guidance.

Mr. Atulya Misra

flexible tariff for granites by comparing it with the neighbouring ports, where the stones are handled for export. It may be noted here that the port had suffered a steep decline of GB exports via Chennai over the past few years as its rival ports located at Krishnapatnam and

Kakinada had garnered them by giving huge discounts on different charges. Airing his grievance at the interaction, a representative of a prominent exporter from Chennai said the port should have a dedicated common rail-siding for handling granite blocks and it was one of the main reasons for many such exporters to shift their activities to other ports in the vicinity. Besides, he also noted that the procedure of disallowing direct entry of GB-laden trucks into the port premises and forced stacking of the blocks in a warehouse on the outskirts of Chennai, which increased handling cost, forced many players in the trade to opt for other nearby ports to export their stones. Apart from rail-siding and

direct entry of GB trucks, the issue related to weighment bridge was also raised during the interaction. During the interaction, Mr. N.Vaiyapuri, Traffic Manager, Chennai Port Trust, made a brief presentation on the port’s facilities available for granite block export and handling. He informed the trade about the various concessions offered to them like exemption from heavy lift charges, weighment exemption and introduction of half shift gang for commencing vessels. Mr. Vaiyapuri also announced that the Board, which met on May 13, resolved to extend half shift gang system for finishing vessels also with effect from June 1, 2013, on trial basis for a period of six months.


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Postal Registration No. MA/140/2012-2014 Posted at Patrika Channel, Egmore, RMS, Chennai / BPC, Madurai. Licensed to post without prepayment - Licence No. TN/WPP-115/SR/2012-2014, Released every Saturday. Posted on Saturday / Monday / Tuesday

June 5, 2013


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