Marine Lines January, 2019 by Marine Lines

Let's turn the tides

Volume:I Issue:VI January 2019

Price: 150

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DECLOGGING PORTS: REMEDY FROM CHICAGO MARINE LINES â&#x20AC;¢ 2019 JANUARY

From the Editor's Deck MARINELINES

Editor-In-Chief Girish Joshi Assistant Editor cum Business Development Executive Haresh Manji Design & Layout Gopi Graphics, Ahmedabad +91 98255 76265 Head Office Marine Lines 3. 2nd Floor, Plot No. 283 Madhuban Tower, 12/B Gandhidham, Kutch, 370201, Gujarat, India email: marinelines2018@gmail.com +91 99095 55416 +91 99257 44679 Mumbai Office 14, Ground Floor, Himalaya House, 79 Palton Road Fort, Mumbai 400001 Contact : +91 98200 03562

Dear Readers, un & Bradstreet study titled ‘Port Logistics: Issues & Challenges in India’ had highlighted the congestion at ports as one of the key issues that needs to be resolved. At a time when shipping minister Nitin Gadkari is expediting the ambitious ‘Sagarmala’ project, it becomes important for all stakeholders including the port developer as well as the government to embrace new technologies. In the New Year’s first issue coming at a time when Gujarat is hosting Vibrant Gujarat Global Investors Summit, we bring to our readers an innovative cargo transportation technology patented by Chicago-based EagleRail Container Logistics. If implemented, this system is bound to decongest ports to a great extent. Along with this inherent advantage, the technology will also help ports get an image makeover. Vibrant Gujarat summit is touted to be :’Davos of the East’ where policy makers, corporate honchos and thinkers come on a single platform. The flagship summit, a brainchild of Narendra Modi when he was the chief minister, has helped Gujarat establish itself as a preferred investment destination. We detail some key projects where companies could be interested in pumping money. For the first time, we have also touched upon an extremely important issue of arbitration. When India is on a cusp of maritime revolution and large number of foreign companies are looking to invest here, they must get an assurance of a speedy dispute redressal mechanism. An experienced arbitrator tells us how arbitration in India can be improved to global standards. MARINE LINES team conveys its best wishes to the GMB, and Gujarat government for organizing VGGIS 2019 and we expect that more investments get parked on the coastline of Gujarat. We will continue our throttle for the best content with more and more stories from the coast.

RNI No. Under Process, Title Code: GUJENG16193 Published by Girish Joshi and printed by Print Vision Pvt. Ltd. on behalf of Girish Joshi. Printed at Print Vision House, Lane Opp to Ashwamegh Elegance 2, Ambawadi Market, Ahmedabad 380 006, Gujarat. Published from # 3. 2nd Floor, Plot No. 283 Madhuban Tower, 12/B Gandhidham, Kutch - 370201, Gujarat, India. Editor: Girish Joshi.

Girish Joshi Editor-In-Chief

MARINE LINES • 2019 JANUARY

Inside 06

Cover Story:

Chicago-based EagleRail Container Logistics Offers Innovative Tech Solution To Decongest Ports, Make Cargo Movement Faster

By Invitation:

Indian Logistics Industry: Challenges And Opportunities Mahendra Shah, MD, V-TRANS Group

Vibrant Gujarat

Best Bet For Investors To Berth

22 Coastal Shipping:

Concor’s First Coastal Shipping Vessel Sets Sail From Kandla

28 24

Q & A: Building smart ports: France’s Haropa Ports Shows The Way

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Expert Speak:

Arbitration In India: Issues & Solutions

Guest Column:

Shipping Challenges For Pharma Industry

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MARINE LINES • 2019 JANUARY

Cover Story

Game-changer for India’s maritime sector I

ndia, with 7,500 km long coastline boasts of 12 major (central government-owned) and close to 200 minor ports that handle nearly 95% of the sea trade. But except for handful of private ports, most are plagued by frustratingly slow cargo evacuation, lack of new technology, dearth of proper logistics system, lack of latest information technology interventions and lack of efficient equipment handling systems. Moreover, large number of ports handle massive volumes of dirty cargo like coal that keeps the threat to environment looming. 6

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But all this can change by embracing new technology. Mike Wychocki, chairman and CEO of Chicago-headquartered EagleRail Container Logistics, has patented an innovative, cost-effective, automatic and clean technology to take cargo/containers directly from the anchorage to offdock facilities that could help ports become more efficient in terms of cargo handling. Mr Wychocki writes exclusively for Marine Lines about this technology and how it could prove a gamechanger for India’s maritime sector.

n the very near future, everything that can be automated, and be made electric, will be. And short-haul container drayage is no different, especially in high-volume situations with limited and repetitive pick-up and drop-off points. Now, there is an exciting new American and Indian cooperative that takes the Amazon.com automated warehouse model directly to container ports; robotically lifting and shutting cargo in and out of ports in the same manner - except with 60,000lb containers, and not 60lb boxes. EagleRail Container Logistics is an international logistics and operating company with offices in Chicago, Delhi, Sao Paulo, Johannesburg, Shanghai and Dhaka, and is dedicated to automating shorthaul container transportation between ports, rail yards and inland container handling facilities. EagleRail is focused on expediting freight receipt and delivery at container ports where real estate is at a premium, and traditional short-haul transport (“drayage”) via truck is causing unacceptable congestion, delays and pollution. EagleRail’s individual carriers are the best of truck and ground rail combined; like trucks, each container is moved individually, not having to wait for a train to be populated, and like rail, it is automated and does not share public roads with automobiles. Plus, it’s carriers can also be easily adapted to carrier automobiles, steel coils, grains/particulates and boxed liquids. EagleRail will not compete with other, existing infrastructure, and in fact is the #1 partner to existing ground railroad networks, as it will deliver with greater accuracy and timing precision to near-by railheads and inland container terminals. It continues and expands the port-automation push, but now thinking and taking those trends, “outside the gate”. EagleRail accomplishes all of this by utilizing its fully-electric, elevated fixed guideway system, with proprietary logistics software that assures each container arrives at its appointed destination quicker, cleaner and more accurately than ever before. The customizable component infrastructure was invented and patented by EagleRail over seven years ago, and it being developed with top global suppliers; two of our most critical and ac-

claimed equipment vendor-partners are Ideal Tech Labs in Chennai India, and crane and AGV leader, ZPMC in China. The EagleRail equipment includes a state-of-the-art electrified monorail track, trolley-style vehicles that carry the containers, plus rail switches, lifter/loaders and cranes assuring smooth interoperability with existing port equipment. EagleRail is currently marketing in 10 regions (US, India, China, Singapore,

We have had intial discussion with GMB team and given them a presentation about our technology. GMB is seriously considering this technology to be implemented in their ports in phased manner Daleep Kaul Indian Partner Eaglerail Container Logisticks

Brazil, Colombia, South Africa, Bangladesh, Argentina and Greece) with Spain and the Middle East in development. Project financiers have been identified and pre-qualified for interest, pending volume guarantees from the terminals and their customers. BENEFITS OF ERC SYSTEM FASTER EVACUATION Primary benefits are improvement of

container port KPI’s, like faster shipturns/evacuation for better ROI on berth real estate, increased stacking capacity with same space, and reduced “dwell times” with more predictable scheduling of shipping lines and intermodal customers. Plus, interconnection of multiple-intermodal facilities with smart data-tracking, and all with lower ‘per-move-fee’ for short-haul due to the consolidation and coordinations of moves. DECLOGGING ROADS Secondary benefits include decongestion of public roads by removing drayage trucks, with more efficient/smarter delivery to and from 3PLs and rail thus increasing volumes and capacity of 3PLs and national rail networks. And not insignificantly, the avoidance of other large CAPEX spends on more public roads and ground rail expansion-projects needed to support increasing container traffic. REDUCING POLLUTION Lastly, the broad-based socio-economic benefits are increased road safety for citizen drivers and pedestrians, and a 60% reduction in CO2 and particulate pollution which assists with the drive to towards green ports and the reduction of asthma and other breathing diseases globally. EagleRail now sees that all integrated players are aligned on the goals of increasing transportation efficiencies, reducing road congestion and reduc-

MARINE LINES • 2019 JANUARY

KNOW THE CEO

PASSION FOR CHANGE

ing diesel emissions through 100% electric automation technologies. With mega-vessel capacity growing, new intermodal corridors being built to create greater regional capacity and competitiveness, and deep-water ports becoming a reality, it is now wonder that last year over $5.5 billion dollars were invested in port automation hardware and software. EagleRail is the next step in the smarter, cleaner evolution of intermodal across the globe. The company is hoping to break ground on three projects in Asia within the next two years: Together with the ZPMC, the U.S. company is in discussions in China to design and build a short distance container conveyance network. This is designed to ease truck traffic at container terminals. An overhead rail system will move containers from one side of a container terminal to another. At the Chittagong Port Authority (Bangladesh) EagleRail is proposing a short distance container conveyance to move containers 700 meters from the terminal to a nearby off-dock transload facility. The project will relieve truck congestion at the terminal by shifting truck 8

pick-up and deliveries to the off-dock transload facility. There, containers will be transloaded onto trucks for delivery to customers in Bangladesh and Nepal. Harper says “there is a serious truck congestion problem at the Port. EagleRail’s system proposes to improve the flow of containers moving off-dock as well as reducing bottlenecks inside the terminal so ships can load and unload faster.” The Port of Chittagong processed 2.3 million twenty-foot unit containers in 2015, he said. At the Singapore Port Authority, the company is working with planners, land use and transportation agencies to design a container transport link between new and existing container terminals. This will reduce truck traffic jams and truck emissions on already crowded Singapore highways. Currently Singapore terminals processes 31 million twenty-foot unit containers per year, Harper said. The company is looking at partnerships with U.S. railroads to develop short distance container transport from container terminals to off-dock rail facilities. Two possible candidates for the system would be the Ports of Los Angeles and Long Beach.

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ike had spent the 30+ years prior to EagleRail as a Principal/ Director in sales, marketing and advertising functions helping to promote clients’ products and services. His passion was in always in learning, understanding and re-telling the real story, the big story, and most of all, those rare game-changing stories. He believed he found a true game-changing story when he started as a marketing consultant to EagleRail, rebranding and reshaping the positioning and selling of this unique solution. After visiting multiple port authorities and port operators in the world about five years ago, he realized that the 100% positive receptivity of the EagleRail idea made it one of those rare, and sorely needed, game-changing ideas. No, it wasn’t a new social media app…but it would change how containers are moved in the world, and that was far greater, and far more satisfying. He was determined to find a way to get the company off the ground no matter what it took. The other significant driver which caused Mike to throw his passion and finances into EagleRail 24/7, was the potential hugely positive impact it could have on safety, quality of life and pollution reduction in and around port and intermodal locations. Life immediately outside port and intermodal gates can be a rough and gritty experience, and conditions are tough for both the dray drivers as well as the towns people that lived in the immediate vicinity. He realized that EagleRail could not only improve port and intermodal economics, but also improve the socio-economic and environmental situations of the port and intermodal communities. Having always been inspired by the likes of socially- and environmentall conscious entrepreneurs like Sir Richard Branson, Mike realized automating and electrifying short-haul drayage was not only inevitable, but also a win for both the global business community and the workers, as well as the environment.

Q&A

Indian ports will be most modern in next 10 years

Mike Wychocki Chairman & CEO EagleRail Container Logistics

Q: Can you describe how this innovative transportation system was evolved and technology patented? A brief history of its invention. A: The technology is an adaptation of overhead, suspended monorail for passenger movement. It was invented approximately 7+ years ago due to a demand for a non-road and non-ground rail container movement solution to take containers in and out of the port of Santos, Brazil, just outside of Sao Paulo. Multiple patents have been applied for in 40 jurisdictions, including the U.S., Brazil, China, South Africa, the E.U and India. Q: What kind of ports and nature of cargo is this system best suitable for? A: It can handle any 20-, 40-, and 45-ft. international shipping container, contents do not matter. We are also working on adaptations for carrying automobiles, steel coils plus particulates and liquids in boxed frames. EagleRail helps ports become more efficient in handling containers and inventory turns, as ports are almost always one node of the new transport system. Q: Which are the ports where this system has been installed and what are the benefits these ports are seeing? A: We are in consideration with several ports globally, but their locations are confidential. Q: Considering the maritime and logistics industry development in India, do you think this system is all the more important here? Please elaborate A: EagleRail could be particularly important in India due to two factors; ER can be a key solution to serve the Indian container-port 4X capacity growth-predictions. Plus, it compliments and supports the

aggressive infrastructure investments that are currently being dedicated to upgrading and expanding port operations and the national rail system. EagleRail is the perfect connectivity between the two . Q: Besides Gujarat, are you in talks for installing this system in other Indian ports? If yes, where? A: EagleRail has made presentations to several Indian government and private port operation in 2018, and we are currently exploring feasibility study agreements. Q: What are your expectations from the government regarding implementation of the project in Gujarat and India? A: Like the other port locations, we seek to collaborate with the Gujarat Port Authority/Maritime Board, Port Operators and Rail Operators, to find and prioritize the best opportunities for an initial system. Q: What is the kind of investment required to install the system? A: The systems are designed to be

multi-party PPP’s backed by private infrastructure funding, and the CapEx will be on par with other large infrastructure projects. The loans are serviced through fees charged via off-take agreements on a “per box” basis, and that will pay down the debt service. Q: How do you view the port/maritime sector development in India? What made you come to Gujarat? A: The Indian port/maritime sector development is arguably the most progressive and aggressive in the world. Plus, the government bodies are smartly seeing the entire country as an interconnected and holistic network that must work together and be linked through dedicated and ‘smart’ rail networks. We think the Indian Port/ maritime sector will be one of the most modern in the world in the next 10 years and arguably one of the best opportunities for EagleRail. We are focused right now on Gujarat due to the Vibrant Gujarat event, and the visionary growth planed for that state.

MARINE LINES • 2019 JANUARY

vibrant gujarat

Gujarat, Best bet for investors to berth

ujarat is one of the leading maritime states of India because of its strategic location with India’s longest coastline of 1,600 km. It is the nearest maritime outlet of India to Middle East, Africa and Europe. The state ranks first in cargo throughput amongst all Indian ports. With 48 non-major ports in the State, Gujarat is the leader in number of operational ports in the country. In addition, it also has a Major Port (Kandla) which is one of the most competitive ports in the region. These ports are strategically located across South Gujarat, Saurashtra and Kutch regions. The state acts as a natural gateway to the rich land locked northern and central hinterland of the coun10

try, constituting 40% of the total Indian trade. The Gulfs of Gujarat, Kutch and Khambhat (Cambay), provide natural navigational safety and logistical advantage to any vessels entering its waters. Over the last three decades, GMB institutionalized the concept of integrated port-led development. This concept was focused primarily on the development of the minor ports and it was supported by last mile road/rail connectivity. This was effectively implemented by bringing in the right private partners and forming private jetties, captive jetties, private ports and other ports through various models of development. Over the years, Gujarat has achieved major milestones in the port and mari-

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time sector. Some of these achievements include: The first State in India to invite Private sector participation through competitive bidding The State with world’s largest ship recycling yard at Alang The first State to announce a Port Policy The first State in India to have a dedicated Chemical Terminal The first private port of India – Pipavav is in Gujarat The State also has one of the world’s largest ship recycling yards at Alang The State also has first LNG Terminal established in Dahej Implemented India’s most ad-

vanced Vessel Traffic Management System (VTMS) in the Gulf of Cambay and then Kutch The first State to announce a Shipbuilding Policy The traffic for GMB ports was merely 3% in 1982-83. This traffic has consistently increased over the years because of the various policies and interventions implemented by the GMB & Government of Gujarat on the whole. In of 2017-18 non-major ports of Gujarat handled 370.7 MMTPA. The share of the major ports during this period has fallen from 94% to 55%. Gujarat’s share, however, in this period has increased to 71% of the traffic for non-major ports of India. Over the last three decades, GMB institutionalized the concept of integrated port led development. This concept was focused primarily on the development of the minor ports and it was supported by last mile road/rail connectivity. This was effectively implemented by bringing in the right private partners and forming private jetties, captive jetties, private ports and other ports through various models of development. Gujarat has achieved the distinction of being one of the most industrially developed states. Accounting for 5 percent of the total Indian population, Gujarat contributes about a quarter to India’s goods exports. The Gross State Domestic Product (GSDP) of Gujarat increased at a CAGR of 13.55 per cent between 2011-12 and 2016-17 to reach INR 11.62 trillion during 2016-17. Moreover it has a good Ease of Doing Business environment with ease in setting up a business, allotment of land and obtaining a construction permit. The utility services like water services and power are also well developed in the state. One of the major advantages that the State of Gujarat faces is its strategic location. It is located on the west coast of India and is well connected to the major cities of the world by air and sea routes. It is the nearest maritime outlet to Middle East, Africa and Europe. The State has 48 non-major ports with the highest number of operational and commercial ports. While considering the maritime traffic, Gujarat ports account for 40% of the total national traffic. This is more than any other State in the country. Moreover, the non-major ports of Gujarat constitute

31% of the share of national traffic. The non-major ports of Gujarat handled 346 MMT in 2016-17 which was 71% of the traffic for non-major ports of India. While considering growth, the traffic at GMB ports has increased at a CAGR of 10% from 2007-08 till date, while the major ports have registered a CAGR of only 2% in the same period. The private ports have registered the most growth in this period, growing at a CAGR of about 14%. Other than the traffic, Gujarat has

Gujarat ports account for 40% of the total national traffic. This is more than any other maritime state in the country an enabling policy and regulatory support for any projects related to port and maritime sector. India’s most advanced VTMS is operational in the Gulf of Cambay and Kutch. The State has attracted a cumulative private investment of INR 37,445 crores from 2003-04 till date. All the ports of Gujarat are well-connected through a network of roads and rails. The airport connectivity to the ports is also very good. Future Development of Ports in Gujarat

The Government of Gujarat through Gujarat Maritime Board is focusing on the development of the Ports and Maritime sector of Gujarat. As per Sagarmala, the capacity of Gujarat’s non-major ports is expected to reach 864 MMT by the year 2020. This is 52% of the total capacity enhancement at all non-major ports of India. For this purpose, there are plans to develop Greenfield ports as well as expansion of existing ports to reach the targeted capacity. The Government of Gujarat has successfully launched the first of its kind of RO-PAX ferry services between Gogha and Dahej in 2017 (Phase I). The Phase II of the project was inaugurated in October 2018. There are also plans to expand the RO-PAX ferry services between various locations in Gujarat such as Hazira, Porbandar, Okha, Mundra, Pipavav and out of Gujarat such as Mumbai. In other projects, the Government of Gujarat has also planned to develop a greenfield port city at Mundra. GMB intends to implement an Integrated Port Management System (IPMS) for a robust IT connectivity between ports. There are plans to develop a service based Maritime Cluster in Gujarat. GMB is also planning to develop maritime education and maritime skill set through establishing a University in the State. The Government is also planning to make Gujarat the leading shipbuilding destination in South Asia. It is also focusing on increasing the coastal shipping and coastal cargo movement in the State and also to other States of the country.

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Development Of Greenfield Ports

ujarat, situated on the western coast of India, is a principal maritime state endowed with favourable strategic port locations. GMB under its Port Privatization Model has been actively promoting and developing greenfield ports through private sector participation. The Gujarat Infrastructure Development Act 1999 further created the legal environment and framework within which private investment can flow to the State. Potential Locations GMB has already identified three potential locations- Mithivirdi,Vansi-Borsi and Modhva, to be developed as all-weather direct berthing ports for development under PPP model of port development. Economic Potential The proposed sites have draughts of about 13 to 15 meters and cargo handling capacity of up to 10 million tons per annum. Mithivirdi, Vansi-Borsi and Modhva have excellent road connectivity with major markets through national and state highways and are within 40 km vicinity from major railway nodes – Bhavnagar,Navsari and Mundra respectively. Mithivirdi The port at Mithivirdiis expected to cater to the Dholera Special Investment Region (DSIR), spread over an area of 920 sqkms. - Mithivirdi Port, at a distance of the about 100 kms from the DSIR, is accessible via the Gujarat State Highway 6 and Gujarat State Highway 37 (along with Bhavnagar – Pipali Highway). - The total industrial area of 11,000 Ha which is planned to be developed at DSIR will house industries like Cement, Heavy Engineering, Automobile and Auto Ancillary Industries, Furniture, Ceramics & Toiletries, Machinery, Agri & Allied Products, Metallurgical Products Logistics and General Manufacturing; which in turn will have the potential to generate huge cargo. Vansi-Borsi 12

The port at Vansi-Borsi will primarily be catering to industries located in South Gujarat and Western Madhya Pradesh which forms the primary hinterland for the port. The industrial belts to which the port would cater to would be: - South Gujarat: (Vadodara-Ankleshwar; Bharuch-Dahej; Surat-Navsari; Valsad-Umargam) - West Madhya Pradesh: (Indore –

Pithampur – Kheda – Meghnagar; Bhopal – Mandideep – Pillukhedi – Babai – Pararia; Ujjain – Maksi – Dewas) Proximity to the proposed western Dedicated Freight Corridor (DFC), will attract large volumes of cargo of North India currently handled by the congestion hit major port – Jawaharlal Nehru Port Trust (JNPT). The commodities identified as potential traffic for Vansi-Borsi include Containers; Liquid Bulk (Crude, POL

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products, liquid chemicals, edible and other vegetable oils), due to its proximity to chemical clusters; Dry Bulk (Coal, Fertilizers and Fertilizer Raw Materials, Cement, etc.); Break Bulk; Ro-Ro; Project Cargo. Modhva The port will have the biggest advantage of being located close to India’s largest multipurpose private port, Mundra. Modhva port will enjoy logistics advantage in accessing the North – Western hinterland of India, thus, catering to cargo hubs functioning in the Northern and Western states of India. The port can be developed to cater to Panamax / Cape size bulk carriers. The commodities identified as potential traffic for Modhva include coal, fertilizers, minerals, agri-products, break bulk (timber, steel & project cargo), etc. Government land is available to develop sufficient back up area for the port. Role of Private Party Both these locations are proposed to be offered to private investors for development as private ports on Build, Own, Operate and Transfer basis (BOOT). Role of GMB GMB will provide waterfront and facilitate the private players in obtaining approvals and statutory clearances associated with the project.

Setting Up Of Facilities For Container-On-Barge Services

ontainer-on-Barge (COB) Services includes collectingshipping containers from nearby regions, stacking containers on the barge and transporting them to central container terminals and vice-versa. Potential Location: Container-on-Barge (COB) Services are proposed to be developed for coastal shipping â&#x20AC;&#x201C; to transfer cargo from ships/ vessels to ports or from ports to anchorage points using barges. Gujarat has two natural gulfs viz. - The Gulf of Khambhat and the Gulf of Kutch, comprising a large number of non-major ports. Coastal shipping can be increased at these non-major ports using the COB services. The major container hubs of Gujarat are Mundra, Pipavav and Hazira. The COB services can be set up in the vicinity of these hubs, so as to cater to the movement of containerized cargo.

Economic Potential: Demand for container on barges is directly proportional to growth in coastal shipping wherein Gujaratâ&#x20AC;&#x2122;s non-major ports have been at the forefront, handling close to 42.45 million tonnes in 2017-18. There is a huge potential for coastal shipping within Gujarat through container on barges; especially to cater to Saurashtra hinterland market for supplies like ceramics from Morbi cluster, agri commodities, engineering parts from Rajkot cluster, vehicle transport etc. Government of India has pledged support to boost the coastal shipping through initiatives like : reduced GST for bunker oil for coastal shipping, substantial discounts (40-80%) on cargo and vessel related charges, priority berthing to coastal ships without any charge, relaxation in cabotage for coast-

al movement of EXIM transhipment and empty containers/ agriculture, horticulture, fisheries and animal husbandry commodities/ fertilizers by foreign flag vessels, issuing coastal shipping rules for coastal vessels operating within 20

miles off the coast; bringing abatement of service tax at 70% for coastal shipping at par with road and rail; and simplification of customs procedures.

Role of Private Party: Development of new port facility(ies) along the coast of Gujarat to facilitate COB Service through Build-Operate-Transfer (BOT) model Using existing GMB Jetties to facilitate COB service as a service provider in procurement of Container Handling Equipment such as: Spreader(s) to be used with cranes for container loading / unloading Reach Stackers for backup operations Towage and Barge Operating Services Role of GMB: Gujarat Maritime Board will support the private player in conceptualizing and developing the project on PPP basis, and shall provide assistance in seeking approvals and incentives as announced by the Government of India and Government of Gujarat from time to time.

MARINE LINES â&#x20AC;˘ 2019 JANUARY

Gujarat Maritime University

he Indian Maritime sector has been consistently exhibiting strong growth and is slated to be the maritime market of the future. The establishment of Gujarat Maritime University (GMU) is an endeavour by the Gujarat Maritime Board to provide a fillip to this growth by bridging the knowledge gap within the industry. The Gujarat Maritime Board is establishing GMU at Gandhinagar, Gujarat under the Gujarat Private Universities Act, 2009. Economic Potential: The prime objective of the University is to be a global centre of excellence in maritime education, research and development, professional training with an aim to enhance the capacity of maritime industry both in India and across the globe. The aspiration is to serve the global maritime community by producing educated and well trained individuals. Indian Maritime Education institutes are largely focused on technical programs which is in sharp contrast with Global Maritime Education Trends. A majority of the programs offered by the current maritime education institutes cater to the technical job roles in the industry (majority – deck officers and marine engineers through programs in ‘Marine engineering’, ‘Nautical science’ and training/certification programs for merchant navy). It is estimated that approx. 92% of all the programs offered by the maritime education institutes in India are focused on these technical job roles. 14

However, only 8% of the intake capacity is from programs focused on commercial areas such shipping and logistics, maritime business, maritime law, chartering and other commercial areas within the maritime sector. A comparison of focus areas of Indian and Global Institutes highlight that global institutes focus on a wide range of areas within the commercial sectors. On the other hand, very few institutes in India have programs focused on commercial areas. Huge demand supply gap of qualified manpower in commercial sectors and low focus of the current maritime education institutes in the country on commercial areas make a strong case for setting up a Maritime University focused on commercial areas. In the initial phase, the University plans to offer programs catering to the commercial aspect of Maritime value chain, viz. Maritime Law, Ship Broking Financing, Port Operations and Shipping Management etc. and aims to achieve global standards in Maritime Education. Role of Private Party: Gujarat Maritime University is looking for strong Industry and academic association with leading global Maritime players. Some of the key collaborative opportunities envisioned for GMU are as follow: Governance: Representative in the relevant committee of studies / board of management as a special invitee

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Curriculum Development and Delivery: Expert visits for interactive sessions such as panel discussions, guest speaker talks, educational tours, industry immersion programs Deliver talks and workshops on emerging topics and latest developments and assistance in introduction of new programs Provide the inputs specific to Maritime Industry Faculty Development: Experts from the Industry and Academics in Maritime conduct courses with faculty at GMU and Support the faculty development programs Corporate Sponsorship: Range of benefits for the sponsoring organization – Naming rights for the academic blocks/ departments/ labs/ Centers of Excellence Research and Consultancy Services from the University Placement participation on priority MDP and EDPs for the staff Training and Research: Provide inputs specific to maritime industry from time to time in validating course content and delivery mechanisms Provide access of its internal training program and curriculum. Provisions for higher studies, correspondence courses and short-term courses for eligible employees Organize customized training programs for an organization Collaborate with the faculty / research associate and supervisors at relevant department / center and provide problem statements for development and promotion of research activities Student Exchange and Placements: Support for student exchange program May take part in campus placement process May provide internship to students Role of Gujarat Maritime Board: Gujarat Maritime Board will be responsible for the overall development of the Maritime University in the State.

Gujarat Maritime Cluster

ujarat Maritime Cluster is India’s first complete ecosystem of ports and shipping services on the lines of the ones that exist in leading maritime nations. The cluster envisions to be a one-stop solution forall maritime services while attaining economic growth, employment generation and industry-academia confluence in the region. Potential Location: Gujarat Maritime Board has initiated the development of India’s first maritime services based cluster at GIFT City, Gandhinagar- country’sfirst operational smart city and only International Finance Services Centre (IFSC). Gujarat Maritime Cluster intends to house maritime related service providers along with regulators ensuring Ease of Doing Business for these service providers (cluster participants). Economic Potential: Maritime trade from Gujarat is projected to increase exponentially backed by economic development projects like DMIC, SIR, PCPSIR, etc. along with Central Government programs like Sagarmala, Make in India and others. Despite the fact that Gujarat handles far more cargo throughput than any other state in India, it does not have the

soft infrastructure like ship finance, chartering, ship brokering etc. in place to complement the hard infrastructure that Gujarat Maritime Board (GMB) has created for facilitation of the trade. Hence the cluster is envisioned to emerge as a centre for excellence for maritime services hosting world

leaders of the trade and promoting innovation, quality and integrity. The companies setting up operations will stand to leverage from the following:First maritime services based cluster in India – Supported by the Government Taxation and Fiscal Benefits applicable to GIFT IFSC and SEZ Proactive Policies by State Regulators

Proximity to the epicenter of action – Gujarat is the biggest maritime player in the country Support in Ease of Doing Business – proximity to regulators and policy makers Excellent connectivity to major cities, ports, ICDs and support infrastructure Unparalleled building and utilities infrastructure in India State-of-the-art social and commercial infrastructure including Gujarat’s first premier club Vicinity to the proposed maritime university will augment industry-academia confluence Role of Private Party: The private parties can set up their operations and avail membership benefits of Gujarat Maritime Cluster. Role of GMB: GPIDCL, a 100% subsidiary of Gujarat Maritime Board (GMB) will be the nodal agency for implementation of the project. GPIDCL will facilitate the investors in registering and setting up operations in the cluster, in availing the eligible benefits and support in ease of doing business aspects.

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Industrial Port City

mart Industrial Port City is being driven by the Government of India through the Ministry of Shipping that endeavours to create a smart city around every major port of the country such as Kandla and Paradip.

Potential Location: A similar concept is adopted by the Government of Gujarat and Gujarat Maritime Board is planning to develop a Smart Industrial Port City atMundra and Pipavav. The port at Mundra is strategically situated on the international maritime routes and it provides multiple benefits for global trade. It is located in the Gulf of Kutch which acts as a natural shelter for the port, facilitating all time safe berthing, un-berthing and vessel operations. Moreover, Mundra Port enjoys logistical advantage in reaching the North Western hinterland of India. This makes it the preferred port for the cargo hubs functioning in the Northern and Western States and Union Territories of India. Moreover, many industries are present in the Kutch region of Gujarat and there is potential for development of more. Thus, Mundra becomes a model location for the development of a Smart Industrial Port City. The port of Pipavav was the first private port of the country. It is operated by APM Terminals, which is one of the largest container terminal operators in the world. Just 16

beyond the portâ&#x20AC;&#x2122;s immediate hinterland are the Northwest markets of Rajasthan, Delhi, and Punjab. Thus, the port becomes another potential location for the development of a Smart Industrial Port City. Economic Potential The Smart Industrial Port city would seamlessly integrate the Smart City concept

with port cities to bring in more industrialization in these areas. This will result in supporting the labour and increase employment in such areas. The smart city would be self-sustainable with clean and green environment, disciplined development, responsiveness to peopleâ&#x20AC;&#x2122;s needs, planting of substantial green cover to mitigate rising carbon dioxide levels and have an urban is-

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land effect. The mitigation of carbon footprint will involve smart street lighting, incentivising the use of renewable energy sources like solar and wind energy. Recycling of goods will also be incentivized. The city will have e-governance links, international standard facilities, special economic zones, ship breaking and building centres besides other allied industries. A private player developing this city would help develop the coastal town or village into a smart sustainable city which would benefit not only the private player but also the State. Role of Private Party The private party will develop the Industrial Port City on PPP basis. The land is already owned by Adani group. The private player can help develop the following in the smart city: Residential and Commercial buildings Healthcare Institutions IT Infrastructure Energy and Utilities Infrastructure Roads and other Connectivity Infrastructure Role of Gujarat Maritime Board GMB will provide assist the private players in obtaining approvals and statutory clearances associated with the project.

Mechanization & Upgradation of Port Facilities

onstantly increasing volume of global trade and the inflow of economic activities towards India and the State have reinforced the need for advanced and efficient infrastructure facilities at the Stateâ&#x20AC;&#x2122;s ports. Potential Location: To enhance the port capacity at Navlakhi, Okha, Porbandar, Bhavnagar and Magdalla,mechanization is proposed, which effectively eliminates the conventional and less efficient methods(unloading of dry bulk cargo at jetty and from jetty to stacking yard or wagontransported via dumpers). These ports are selected based on available area and future demand. Following components should be incorporated in the proposal: Cargo unloading from ship or barge to jetty or mobile hopper Mobile hopper to truck loading Mobile hopper to stacking area through conveyor Stacker-Reclaimer Wagon or tuck loading In addition, dust suppression systems should be installed to reduce air pollution from handling dirty cargo. All the five ports are all-weather, non-major intermediate port handling dry-bulk cargo, owned and managed by Gujarat Maritime Board and connected to the rest of India by broad gauge railway system and National

Highway that helps to cater cargo requirement of nearest Industry as well as major city and nearest states. Economic Potential: The total cargo handled by the identified ports in 2017-18, including the commodities handled are: Magdalla: 298.10 Lakh Tons, Commodities Exported: Naphtha, HR Coils and

Steel, Commodities Imported: Iron Ore, Coal, Naphtha and Cement/ Clinker Navlakhi: 86.91 Lakh Tons, Commodities Exported: Salt, Commodities Imported: Coal Okha: 39.97 Lakh Tons, Commodities Exported: Bauxite, Commodities Imported: Coal, Limestone

Bhavnagar: 22.34 Lakh Tons, Commodities Exported: Oil Cakes, Salt, Scrap, Onions, Clay and Rape Seeds, Commodities Imported: Rock Phosphate, Coal &Coke, Fertiliser, Iron Scrap &Sulphur, Wood &Timber Porbandar: 19.41 Lakh Tons, Commodities Exported: Bauxite, Cement/ Clinker, Commodities Imported: Coal, LPG and Limestone Deployment of mechanized equipments for handling bulk cargo helpsimprove efficiency parameters like faster ship turnaround time, and also prevents cargo contamination and related environmental issues. Mechanization also helps in lowering the berth occupancy time so that more vessels can be handled at the same time, thereby achieving maximum possible evacuation rate. Role of Private Party: Port mechanization project are usually funded through a PPP model, in which private players can charge operating charges per ton of cargo handled. The private player will be responsible for Procurement, Installation Operations & Maintenance. Role of GMB: The mechanization project at Port has been planned & shall be developed by Gujarat Maritime Board on a standalone basis.

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Marine, Cruise Tourism

enerating revenue by using existing and future assets such as, port premises, light houses, waterfront for tourism activities

Potential Locations: Beach Development: Beaches like Shivrajpur, Positara, Sarkheshwar, Dandi, Tithal, Umergaon, Dumas, Somnath, Porbandar, Okhamadi, Ahmedpur-Mandvi and others can be explored for development to promote beach tourism. Cruise Tourism: Cruise tourism could be explored along the long coastline with special focus on Porbandar, Dwarka, Somnath, Ahmedpur-Mandvi, Kutchh-Mandvi. Surat-Somnath-Porbandar-Dwarka-Mandvi-Surat could be developed as a cruise tourism circuit. Terminal related infrastructure development would entail Berth development, Terminal Building construction, construction of passenger lounge, crew lounge, embarkation balcony and other amenities Economic Potential: Growth drivers for marine tourism including cruise tourism. A robust Tourism Policy for Gujarat 2015-20 is in force GoG has accorded industry status to 18

tourism sector with priority to Cruise industry: Loan interest subsidies, concessions in taxes and other duties More than 20 pristine beaches identified by Tourism Department Cruise tourism has seen immense growth in the last decade and is expected to grow at a CAGR of ~ 10% upto 2030-31 Tourist influx to Gujarat has grown by a CAGR of ~15% during the period FY 12-17 Gujarat is amongst the top 5 states in Ease of Doing Business excellence Role of Private Party: A firm company, Joint Venture or consortium of Indian or Foreign origin could develop the beach infrastructure and/or cruise terminal and allied infrastructure for cruise tourism through private investment (BOOT) model

Sangan Kotda beach near Dwarka

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Allied avenues of Investment : Water sports, tours to destinations with guide, local cuisine, guided tours of heritage sites, cultural programs, panelled luxury hotels for retiring in between destinations, and on demand medical support Role of GMB: Gujarat Maritime Board (GMB) will allot the waterfront to potential private investors. Other facilities for passenger cruise to be offered by GMB are walk-in-berthing, assured quality bunkers, fresh water services, and grey water reception. It will facilitate the investors in ease of doing business aspects including assistance in obtaining approvals and other statutory clearances.

Development Of LPG Terminals

Okha Port, a potential site for LPG terminal

ujarat has attracted significant investments in Liquefied Petroleum Gas (LPG) import infrastructure. The state has LPG import infrastructure at Sikka, Porbandar, Dahej, Pipavav, Kandla, and Mundra. Potential Locations: The potential locations for LPG infrastructure could be the non-major ports along its 1600 km long coastline, which is under the jurisdiction of Gujarat Maritime Board. The port facilities could be jetty/ wharf/ pier or alternatively offshore facilities like LPG Floating Storage & Off-loading (FSO) / Catenary Anchor Leg Mooring (CALM) buoy. The allied infrastructure could be pipeline from offshore facilities to land fall point to onshore terminal.

Economic Potential: India is the world’s second largest importer of LPG after China and has imported close to 12 million tonnes in FY 17, primarily driven by domestic sector. About 50% of India’s LPG consumption

is met through imports as India’s LPG production capacities (through refining andfractionation) is insufficient to meet the burgeoning demand. Considering the slow capacity addition in LPG domestic production vis-à-vis the exponentially growing consumption, India will have to rely heavily on LPG imports in the decades to come. Government initiatives like Pradhan MantriUjjwalaYojana (PMUY), an INR 8000 Crore scheme which aims at providingfive crore LPG connections to BPL households as well as Rajiv Gandhi Gramin LPG VitranYojana (Rajiv Gandhi Rural Distribution Scheme)will further augment the demand for the fuel. According to Petroleum Planning and Analysis Cell (PPAC), LPG demand is projected to touch 30 million tonnes by the next five years. Gujarat has the country’s best LPG evacuation infrastructure with robust road and rail connectivity to the ports, a healthy density of LPG bottling infrastructure as well as cross-country LPG pipelines like Jamnagar-Loni Pipeline

(1270 kms) and proposed Kandla-Kanpur pipeline (1987 kms), through which LPG imported at Gujarat could be transported to huge demand centres at northern hinterland. Role of Private Party: A firm/company, Joint Venture or consortium of Indian or Foreign origin, possessing financial and managerial capabilities of Port Development, Port Management, stevedoring export/ import trade and/or captive cargoes, and marketing of petroleum products could invest in the development of port facilities for handling LPG through private investment on private jetty (BOT) model. Role of Gujarat Maritime Board: Gujarat Maritime Board will allot the waterfront to potential private investors. It will facilitate the investors in ease of doing business aspects including assistance in obtaining approvals and other statutory clearances.

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Free Trade & Warehousing Zone

he Free Trade Warehousing Zone (FTWZ) is a special category of the Special Economic Zones (SEZ) and is governed by the provisions of SEZ act and rules. The FTWZ is designated as deemed foreign territory which is envisaged to be integrated zones and used as international trading hubs. The various facilities in FTWZ include : Customized categorized warehouses,Office Space, Dry Cargo, containerised, break bulk facilities, Over Dimensional Cargo Yard, Enhanced transportation facilities, Controlled temperature warehouse, Support facilities such as medical centres, canteen etc. Potential Location: Development of Free Trade and Warehousing Zone (FTWZ) could be considered in Jamnagar and Magdalla (near Surat). These FTWZ could be integrated with Internal Container Depot (ICD) / Central Freight Station (CFS) Services. Economic Potential: With the implementation of GST, 20

the Indian logistics market is expected to reach about USD 215 billion in 2020, growing at a CAGR of 10.5 per cent . FTWZ concept revolves around providing a world class, single window solution for multiple logistics activities that saves costs in overall supply chain Ready Market:Surat has significant industrial presence in Textile, Chemicals and Petrochemicals, Dyeing & Printing, Diamond Processing, Engineering while Jamnagar has a significant industrial presence in Brass, Petrochemical, Refinery, Mineral based industries, Cement and Fertilizer. Both the centres are major export centres and have access to excellent port infrastructure Strategic Location: Gujarat acts as a gateway to northern and central hinterlands of India through a strong rail, road and air connectivity thus providing immense trade opportunity. Port Infrastructure: State has the highest number of operational ports and commercial cargo ports which handles approximately 40% of nation’s maritime traffic DFC & DMIC: 38% of the entire length of the Dedicated Freight Corri-

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dor (DFC) passes through Gujarat while project influence area of Delhi Mumbai Industrial Corridor (DMIC) covers nearly 62% of the area of the State Policy Support: 100% FDI under the automatic route for all logistics except air cargo and courier services; Government of Gujarat has accorded industry status to logistics; The companies developing FTWZ will stand to leverage on multiple incentives and scheme to attract foreign investment and to encourage the logistics, trade and warehousing sector Role of Private Party: The FTWZ/ Logistics park project are usually developed through a PPP model. Under PPP model, it can be developed either by “Build, Own, Operate and Maintain (BOOM)” method or by “Joint Venture” method. Both the models are feasible for implementation. Role of Gujarat Maritime Board: It is proposed the developer will identify and acquire appropriate land near Magdalla and Jamnagar, GMB will facilitate the implementation of the project.

Development of Private Jetties

MB under its Port Privatization Model has been actively promoting and developing private jetties which are granted permission for a lease period varying from 5 to 25 years depending on investmentwith the following general guidelines of privatization Incomplete works of wharf/jetty/quay of GMB Privatization of construction of new wharves/jetties at selected sites Installing modern mechanized handling system

Potential Location 150 meters waterfront at Rozi Pier, Bedi is proposed to be developed by private investment. Rozi is an anchorage port with a 400 meter jetty and 100 meter wharf. Economic Potential Access to excellent port infrastructure: Maximum draught at Bedi anchorage is close to 16 meters. Barges at Rozi pier operate round the clock. Commodities handled Import - Fertilizer, Rock Phosphate, Coal, Corn, Soya Meal, Crude Soyabean Oil, Bulgar Wheat, Green Peas, Dates, Refined Vegetable Oil, RBD Palm Oil, Crude Palm Oil, Rock Salt and Pig Iron Export: Soyabean ext., Rapeseed., Bauxite, Guargum, Cement, Wheat, Castor oil, Castor seed, Pet coke, Clinker, Rice, Sugar Excellent Road and Rail Connectivity: The port is well-connected with NH 8, which is 12 km away from Bedi Port. Nearest

Broad Gauge (BG) line is at Jamnagar which is about 10 kms from the port. Setting up rail infrastructure at Old Bedi (2.53 km siding), New Bedi (7.7 km siding) &Rozi Pier (9.82 km siding) is being taken up in the near future. Proximity to Jamnagar: The district has a significant industrial presence in Brass, Petrochemicals, Mineral based industries, Cement and Fertilizer sectors in addition to two major petroleum refining complexes developed by Reliance Industries and Essar Group (now Rosneft). Proximity to Kandla/Mundra: If adequate cargo handling facilities are developed at Rozi, significant distance, time and cost advantage could be achieved thereby saving transporting cargo through Kandla or Mundra port Conducive Government Support: Gujarat is the first state to privatize the development of ports in the country and has presence of 10 operational private jetties and 4 private ports

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CONCOR’S FIRST COASTAL SHIPPING VESSEL SETS SAIL FROM KANDLA

Many laughed when I talked of developing waterways: Gadkari

(Top) Shipping minister Nitin Gadkari flagging off Concor’s coastal shipping vessel from Kandla (Above) DPT chairman Sanjay Bhatia at the event

aterways transport in India is on a cusp of a revolution and has potential to bring down logistics cost by 4% that will boost exports by 30%, union minister for shipping Nitin Gadkari has said. There are several firsts in the country were lined up as massive works were underway on projects for turning 11 rivers into waterways besides pilot run of aeroboats on Ganga on January 26. “People used to laugh at my dream of developing waterways and running cargo ships on the river Ganga. Now we have paved the way for exports to Bangladesh and Myanmar through Varanasi...If we reduce our logistics cost by just 4 per cent then our exports will boost by 25-30 per cent,” Gadkari said at an event to flag off Concor’s coastal shipping vessel from Kandla to Tuticorin recently. The share of coastal shipping in China is 24 per cent, Germany 11 per cent and in USA it is 9 per cent but in India it is barely 4.5 to 5 per cent. Massive works are underway to develop waterways which many thought was a dream only. Of the 22

111 rivers to be converted into waterways, projects are underway on 11. Eighty lakh tonne of cargo was transported through the Ganga this year which was going to increase to 280 lakh tonne as a draft of three metre has been maintained on Varanasi to Haldia stretch of 1,680 km. The Centre is maintaining 1 metre draft from Allahabad to Varanasi and barges are designed with such techniques that they can carry 3,500 tonne of cargo each in place of 2,000 tonne at present. Coastal shipping is developed in way that it can carry all kinds of cargo - automobile, fertiliser, cement, steel, foodgrain, sugar. .“Besides, four aertoboats using Russian technology are ready for a pilot run on Ganga on January 26. These can run on water, mangrove and land. Easing of policies has resulted in arresting 30% of the Colombo bound containers.. These all are historical steps. Concor said container shipping operations envisage deployment of two vessel each of 22,000 DWT (dead weight tonnage) capable of carrying about 700 containers (twenty foot equivalent units).

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There will be weekly service from Kandla Port via Mangalore, Cochin and Tuticorin. The business potential includes transportation of foodgrains from FCI; steel from RINL, Tata, Posco and SAIL; cement from Dalmia Bharat, Ultratech, Ambuja and JSW; automobiles from Ashok Leyland, Hyundai, Renault and Nissan besides cotton, fertiliser, sugar, soda ash, groundnut etc. Concor estimates that if 10% of the business volume is captured through coastal, it would be around 2,700 TEUs per month. In the first phase, with West Coast operation, Concor is expecting a million tonnes of cargo per annum besides another million tonnes by starting East Coast operations. “After consolidating our position in the western sector, Concor proposes to further expand the services in the eastern sector also duly connecting ports like Kattupalli, Vishakhapatnam, Gangavaram, Krishnapatnam, Paradip and Haldia with Tuticorin as a hub for east and west coasts,” the company said

S.U.Shah & Associates ADVOCATES, DISPUTE RESOLUTION EXPERT, LEGAL CONSULTANTS

• Advocate- Arbitrator Mediator • Director-Chartered Institute of Arbitrators (London) - CIArb-India Branch • Director – Hong Kong Zhiqing Trading Co. Ltd, Hong Kong • Approved Faculty for Arbitration-CIArb-London • Fellow – Prime Dispute, London • Mediator – Mainland-Hong Kong Joint Mediation Center, Hong Kong - Hong Kong Mediation Service Limited, Hong Kong - The Mediation Center, Dubai • Fellow – World Mediation Organisation • Secretary – Gujarat State Committee-Society of Construction Law (UK)-India Branch • 24 years of active legal practice and experience. • Having own proprietary full servicelaw firm at Ahmedabad, State of Gujarat, INDIA under the name and style of S. U. SHAH & ASSOCIATES, with associates spread across India and other places Internationally. Following are the major areas of practise of the firms: • Arbitration, Mediation and Conciliation • Civil & Commercial Litigation • Consumer Disputes • Contractual and Commercial Disputes • Corporate Law & Restructuring and other related services • Documentation and Advisory • Family & Matrimonial Dispute and Counselling • Immigration Law & Advise and VISA guidance (for Canada) • Investment guidance and structuring • Legal and Financial Due Diligences

• Maritime law and Shipping Consultancy including Dispute Resolution. • Mergers and Acquisitions • Personal law and guidance • Real Estate and Property Having Associates at the following locations in INDIA: Gujarat: Bhavnagar, Bharuch, Bhuj,Jamnagar, Palanpur, Rajkot, Surat, Vadodara, Valsad and whole of North Gujarat controlled through Ahmedabad Others: Aurangabad,Bangalore, Bhopal, Chennai, Gauhati and North East India, Indore, Jaipur, Kochi, Kolkatta, Mumbai, Nagpur, New Delhi, Pune, Udaipur International Associates at: Dubai, Hong Kong, Saudi Arabia, Shanghai, London, Canada Contact details: S. U. Shah & Associates Advocates, Arbitrator, Mediator & Legal Consultants Principle Office: 240, Ellisbridge Shopping Centre Opp. Town Hall Ashram Road Ahmedabad – 380 006 (Gujarat) INDIA Tel: +91-79-40069544 / 46 (directline) (M) : +91-98240 34286 E-mail: samirushah@yahoo.co.in,sushahassociates@gmail.com

interview, director, Haropa ports, Herve Martel

Building smart ports: France’s Haropa Ports shows the way

AROPA ports, the synergy of seine river ports of Le Havre, Rouen and Paris provides end to end multimodal logistical solution and facilitate the excellent connectivity for maritime and multimodal trade flows with European states. A delegation of Senior management team from HAROPA Ports headed by Mr. Herve Martel, CEO, Port Of Le Havre & director, HAROPA Ports, is visiting India in February and are conducting a series of business event at various cities in India. Director- French Customs is also schedule to be part of the delegation. During these events, HAROPA ports is to show case its endeavours in the digitization of port services to offer optimized management of data & flows to bring ever faster, more efficient, intelligent and secure flow of goods, whilst ensuring an integrated and ecologically sustainable approach. These new generations of port IT tools, including modernisation of PCS, interconnected and developed along with the supply chain stakeholders, are encompassed 24

into the “Smart Corridor” approach promoted by HAROPA, throughout the Seine axis, to provide better service to customers by offering a 100% digital and paperless procedures & solutions”. The finalised dates for forthcoming HAROPA event in 2019 is 11th Feb –New Delhi/13th Feb-Chennai/ and 15th Feb- at Mumbai. After record figures in 2017, HAROPA has also recorded global traffic growth for 2018, with a 2% rise in global tonnage. The good results of HAROPA prove the rising trend of our ports and bring good prospects and investments for the coming years. The port is preparing for the future with the ambition to become ever smarter. In an exclusive interview with Marine Lines, Mr Martel shares his vision on making ‘smart’ ports. Q: What is a ‘smart port’? A:It is an intelligent, connected, high-performance, sustainable, collaborative and innovative port: a port which relies on information and digital technologies.

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Q: How to become a ‘smart port’? Or rather: How to go further on with the ‘smart port’? because the ‘smart’ notion is in the DNA of HAROPA. In 1980, the port of Le Havre had indeed already invested in the SOGET company which was developing one of the first ‘Port Community Systems’, a software providing fluidity for the procedures related to cargo shipping. Q: Thus, what is at stake is: how to become ‘smarter’? A: Being ‘Smarter’, means working together in a better way: our ports must join efforts with the communities of private and public stakeholders. HAROPA’s ambition is thus to be the ‘catalyst’ of a ‘smart corridor’ extending over all the city and industrial places of the three ports along the Seine axis; to be a conductor, in synergy with its customers and partners, capable to set digital innovations to music in order to serve all shipping, port and logistics services. Q: Your ‘Port Centers’ illustrate this

ambition? A: We indeed have the ambition to develop bonds with the city and its inhabitants, but also with inland territories so that everyone could derive benefit from port growth. That’s why we create ‘Port Centers’, which are places enabling the public to discover the port and who have the calling to tend to 2.0. In Le Havre, the site located at the crossroads of the city and the port, welcomes around 10,000 visitors every year. In Rouen, a feasibility study is underway, which will make it possible to lay the foundations of a similar project. Q: Can you tell us about the “Hackathons”, your innovation laboratories? A: Each year, we organize port Hackathons with private and public stakeholders, in order to favor digital innovation: for 24 hours, watch in hand, a group of voluntary developers, often students from engineering schools, meets to find answers to port issues. This tremendous

Being ‘Smarter’, means working together in a better way: our ports must join efforts with the communities of private and public stakeholders. HAROPA’s ambition is thus to be the ‘catalyst’ of a ‘smart corridor’ extending over all the city and industrial places of the three ports along the Seine axis booster of innovations makes it possible to identify talents and make solutions arise. The most recent Hackathon took place in Gennevilliers, at the end of last year about the subject of ‘smart port city’ and around four challenges: security at the port of Gennevilliers, its attractiveness, the ‘smart navigation’ and the emphasis of port trades. The first prize was awarded to a team of three young ‘Hackathonians’ for their design of a ‘chatbot’ aiming to streamline the contacts between the companies which recruit on the port and job

Hervé Martel, Vice-President and CEO, Port of Le Havre

seekers. Q: If you had to sum up this notion of ‘Smarter Port’ as seen by HAROPA? A: I should say that we have to tend towards ever more predictive logistics; we have to connect the players of the logistics chain in an ever more dependable way, we also have to better understand the port environment to preserve it and let it be more sustainable; and we have to be able, together, to control our innovations…”

corporate voice

Indian Logistics Industry: Challenges & Opportunities

By Mahendra Shah

he logistics sector in India is the backbone of the Indian economy, providing efficient and effective flow of goods and services. For that matter, any developing country need an effective logistics network for improvement in the business and economic growth of the country. In India, the logistics sector is growing rapidly in acombination of infrastructure growth and update in technology advancement. Primarily consist of Transportation, warehousing freight forwarding & Value added logistics. Most companies have overlapped operations and serve cli26

ents in more than one are, at V- Trans, we provide single window solutions for every logistics need of the client. The logistics industry in India has come a long way in all these years. The industry has graduated from being a labour-intensive industry in the early years to being technology savvy and technology reliant. While labour is an important arm of the industry, systems like e -tracking, RFID, ERP software’s have automated the process and enabled smoother last mile delivery. Service providers in the industry are enabling the clients to focus on their core competencies and streamline their supply chain solutions by providing them

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Mahendra Shah, MD V-TRANS Group

single window solution. Companies are now realizing the value of high quality “customer-responsive” factor. Traditional transporters are rapidly transforming themselves into integrated logistics service providers by incorporating activities like inventory management, order processing, collection of bills, sales and excise duty documentation to effectively utilize their existing assets and experience. Since the industry has been growing rapidly there has been numerous growth opportunities for logistics companies.The rise in the movement of freight traffic is result of years of high growth in the Indian economy. The traffic has generated new growth opportunities for various logistics

companies like V-Trans in all logistics domains including- transportation,warehousing, freight forwarding, express cargo delivery, container services, shipping services etc. Increase in the demand in retail, e-commerce sectors will also have a greater impact in terms of demand in the logistics industry. The growth of the Indian logistics sector is also dependent upon its soft infrastructure like education, training and policy framework as much as the hard infrastructure. The implementation of GST has been beneficial for the logistics companies and has become a growth opportunity. Companies which were forced to set up small warehouses across multiple cities can just set up warehouses region wise which will allow increase in the freight movement from the warehouses to the different manufacturing plants, wholesale outlets, retail outlets and the various POS. This growth is backed by the boom in the e-commerce sector and expansionary policies of the FMCG firms. The growth in retail, eCommerce and manufacturing sector had led to the witnessed growth in the logistics industry. According to the CARE ratings, the country’s logistics industry is projected to be worth $215 billion by 2020-21, recording a 10 per cent compounded annual growth rate (CAGR) over its approximate size of $160 billion in 2016-17. The industry is moving from being just a service provider to being an end-to-end supply chain solutions provider to their customers. Thus, all this has paved the way for further growth of logistics and warehousing industry in the coming years. Despite growth opportunities in the sector, like any other sector there are challenges that are associated with the opportunities in the logistics sector. Some of the most common problems associated with logistics operations includeUnorganised sector the logistics sector is highly fragmented and has many unorganised players. Thus lacking standards and industry level functioning. We any which way do not have the industry status and hence also do not have forums and platforms for common voice.

Fuel Costs The highest costs contributing to the transportation cost concern is fuel prices. Increase in the fuel prices increase the cost of transportation leading to an increase in the logistics cost; moreover, frequent fluctuation in fuel prices have made it difficult to maintain the cost and revenue targets.

“The logistics industry in India is moving from being just service provider to being an end-to-end supplychain solutions providers” Infrastructure Lack of infrastructure like proper roads on highways, high cost of essential facilities, difficult and expensive maintenance, lack of elasticity of urgent demands, time consumption in organizing railway carriages, low capacity, lower safety, and slow speed for inland waterways transportation all are bottlenecks for the free development of logistics sector in the country Technology adaptation Lack of wi-fi systems and connectivity also create issues in the seamless

tracking and services thus effecting last mile delivery. Stronger technology systems like increasing adoption of Robotics & Automation, Smart Trucking to drive efficiencies is also one of the latest trends that can be seen. Companies have still not adapted to the technology advancement. Warehousing Many of the older facilities today are located within city boundaries restricting day movement of trucks. Warehousing companies also need to keep in consideration storage of products which will require cold storage space. Despite the significant requirement of cold storages from the retail sector, pharmaceutical and chemical sector and the farm sector, where it is estimatedthat up to 40% of the fruits and vegetables grown in India gets wasted, receptor needs to growmuch faster to meet the needs. This is despite the fact that cost of labour, one of the most significantcontributors to logistics costs in developed countries, is significantly cheaper in India. While the logistics industry has come a long way, there is still lot of distance that is to be covered. As we move forward, there are newer challenges in terms of how goods and services are now consumed by the last mile customer and the industry in turn has to keep up pace so that it can seamlessly service growing and changing needs from all its stakeholders.

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ARBITRATION in india: ISSUES & solutions

Arbitration best way to resolve maritime, trade disputes

lobal investors are looking at India as a land of opportunities. Given the increasing international trade and influx of foreign investors, commercial disputes are bound to increase. India needs an international-level arbitration system to assure foreign companies of fair and fast dispute redressal mechanism. Advocate, arbitrator and mediator Sameer Shah dwells on the issues and challenges of arbitration in India in an exclusive interview with Marine Lines. Q: What are your thoughts on the arbitration process in India? A: The Arbitration process in India has come a long way from the Act of 1940 to the Act of 1996 and the amendments made in the Act of 1996 in the year 2015. Also further amendments are proposed in the Bill of 2018. The developments are positive in general. However, we need to understand if these amendments will suffice and service the purpose of effective arbitration process, one of the main such purpose being giving a level of comfort to foreign investors regarding effective resolution of commercial disputes. Despite several changes being made in the Act with good intentions, the arbitration process in India is still not up to the international standards. Parties are still preferring Singapore or London or other foriegn seat to settle their disputes. This is because the amendments made did not really help. We are still at the stage of making out the correct interpretation of various such amendments by landing back the matter to court for such interpretation. There are several other factors playing against establishment of an effective and robust arbitration regime in our country but many fo such factors are not appropriately dealt with. Q: Why is arbitration so important in In28

dia? A: If you see Indiaâ&#x20AC;&#x2122;s global positioning today, the trade volumes are increasing significantly due to various industry friendly steps taken by Prime Minister Shri Narendra Modi. Lot of foreign investors are looking to India, which has emerged as the second largest economy after China. Given this fact, the commercial disputes between foreign companies and their Indian partners is bound to increase. But no foreign client would like to fight a case in Indian courts for obvious reasons. Vice versa is also true as Indian companies also have a lurking fear to take the disputes to foreign court. India was one of the first signatories to the model United Nations

Commission On International Trade Law (UNCITRAL) when it came out with a centralized dispute resolution mechanism and its guidelines were adopted into our Act. We need to give foreign investors that assurance and comfort that if there is a dispute, they will get an international standard dispute redressal mechanism. Therefore, given the current scenario where India is pitching hard for global investments, arbitration becomes all the more important. Q: What are the advantages of arbitration over litigations? A: The biggest advantage of arbitration is that it is neutral. Moreover, it is confiden-

JANUARY 2019 â&#x20AC;˘ MARINE LINES

Sameer Shah Advocate, Arbitrator, Mediator

tial and nothing goes out of that arbitration room. During commercial disputes, no company wants that its trade secrets are known to public and this is where arbitration offers an inherent advantage. The process is faster than court as there is nothing like mandatory cross-examination of evidences etc. The parties can even agree that the arbitrator/tribunal has to pass the award simply by going through the documents. All these factors gives an edge to arbitration over litigation. Q: What is the current scenario of maritime arbitration in India? A: As far as maritime arbitration is concerned, it is sort of norm that companies mostly go to Singapore or London unfortunately due to certain factors. We must understand why? Both have a very well developed dispute resolution system including the judiciary and over the years people have developed total faith in the system. Parties are assured of decisions coming fairly and that justice will be delivered. Moreover, there is a robust system of institutional arbitration in both the said jurisdictions with London having a specialised Arbitration Center catering to Maritime disputes - London Maritime Arbitration Association (LMAA). Our country certainly lack both the infrastucture as well as subject experts (who are few concetrated manily at Mumbai). Further, as a general issue, The Singapore courts have a very pro-arbitration approach which is not the case in India, especially in the lower judiciary where the cases are referred for enforcement of the award. In India, except for the four metro cities, if the arbitration award is challenged, it goes to the respective district courts and not the high court. Here is where the problem lies. Many of the lower judiciary does not have the knowledge, vision and experience to deal with such matters . Therefore, com-

panies prefer to get an arbitration award from outside the country. Secondly, there is a lack of experienced and qualified arbitrators in India and we are still depending on retired judges. I understand that in certain matters we require persons with knowledge of law but its not needed in all matters. You don’t need a judge to decide on disputes which require subject expertise like maritime, accounting or an trade related matter. Rather, we need a Marine expert or a chartered accountant. In case of infrastructure dispute, we need a civil or structural engineer. Lack of such experts is causing immense delay in arbitration cases and adding to the cost of arbitration to the parties. There is no dearth of experienced people with subject knowledge. But in case of corporates too, the in-house counsels prefer only retired judges fearing that if the award goes against his/her company, the management may put the blame on them. So there are too many issues that are intertwined and need to be addressed. Fees and cost is another adverse factor that is spoiling the arbitration system in India. Arbirators are used to charging as per their whims and many times it gets more costlier than litigation in courts. Under an amendment in 2015, Schedule 4 lays down prescribed fees depending on quantum of claim and this capped at Rs 30 lakh. But again, this not mandatorily applicable unless the said Schedule is notified by the respective high courts in the states. As far as I know, except Rajasthan and Karnataka, no other courts have notified these charges. Therefore, arbitrators can tell the parties that they are not bound by Schedule 4. This is a loophole that needs to be plugged. I am not saying arbitration is cheap in other countries, but they are moving towards institutional arbitration. The parties know how much the cost much in advance and also the same is reasonable. Q: But would appointment of subject experts alone suffice? A: This is just the first step. Once the award is passed, the winning party has to approach the court to get it enforced. In all such cases where the losing party is not complying with the Award, this has to be done and getting the relief in actual terms

takes a long long time. We come back to the same problem. That particular level of judiciary is not trained to decide on enforcement effectively expeditiously. Here is where a mindset change towards arbitration is required. The judiciary should not take it as their competition, but as supplement to their own system. Therefore a two-pronged approach is required. One is training of the district-level judiciary and the arbitrators and second a complete change in the mindset of stakeholders – both judiciary and the counsels. You need a totally different approach towards arbitration. Lawyers must understand that there is a difference between litigation and arbitration. You don’t ‘argue’ in arbitration and you just ‘submit’. But this is not happening, Q: Will institutional arbitration be more effective then? A: Indeed. We need to understand this system. The institution lays down all the procedures and rules for arbitration and the parties must put a clause in their contracts that all disputes will be referred to the institutional arbitrator. This is the best effective way to resolve the disputes and this is happening internationally. It also saves a lot of efforts of the companies along with the fees and costs. The percentage of institutional arbitration is higher than ad hoc arbitration internationally. However, the reverse is true in India. However, there is seems to be ray of hope and light with the establishment of the Mumbai International Arbitration Center but we need more such centres. Q: How do you see arbitration in maritime sector increasing? A: Maritime arbitrations are bound to increase in coming days due to the government’s thrust on developing the ports and maritime sector in general through various policies. But we need to project to the foreign investors that they will get the dispute redressals at the same pace and fairness. There is still a big reluctance to having arbitration in India. When contracts are drafted, they put a clause that in case of dispute, the arbitration will be done outside India. As they still have an upper hand, companies here also agree to the clause blindly as they need business.

Q: Lot of foreign investors are looking to Gujarat. Will having arbitration centre in Gujarat be beneficial? A: Gujarat has the longest coastline and a conducive policy to develop ports. Definitely we need such an institution here. But all depends on how it is structured and people associated with it. If the purpose is genuinely to foreign companies the comfort and international stand dispute redressal mechanism, it will definitely work. Singapore International Arbitration Center has opened an office in GIFT City, Gandhinagar, Gujarat but it’s effectiveness is yet to be tested. This is because even after the dispute is resolved in arbitration, the party still lands up in the local court for enforcement of the award. Q: What is the role of government in this scenario? A: Ultimately, it is the government that has to give a proper picture to the foreign investors that even courts here will be pro-arbitration and that our country has the at par international standard arbitration system including qualified and trained arbitrators with subject matter expertise. Things have improved over the years, but this is limited to 2-3 states only. Again, we need to train that particular level of judiciary to have pro-arbitration approach. Many even don’t know what arbitration is. This is a grim situation. A two-pronged approach is needed here – one is to improve on the arbitration process itself and second, the court system where the matter should end at two levels. But easier said that done. It all depends on the government which is the main litigator here. They have brought Acts like Money Laundering Act and Economic Offenders Act. The government can definitely bring a law to improve arbitration and make it more effective. A similar system of pre-litigation mediation rules has been implemented, but again it is not binding, thus defeating the purpose. There needs to be a provision for timeframe in the Act for enforcement of the award. For example, if the court is not able to come to any decision within a particular time frame, the award should be deemed as automatically enforced. Moreover, penalties for delay ( by the losing party) should be imposed so that the winner in arbitration actually gets the desired result.

MARINE LINES • 2019 JANUARY

BY INVITATION

Shipping challenges for pharma industry

ne of the most common features observed on any strip or form of medicine, right from simple pills for cold or cough to highly sensitive recombinant therapeutics for an oncology indication, is the usability period or lifetime of the drug, which may vary from a few days to several years depending on the type of drug. The ‘expiry date’ for each drug is determined by stability studies of the drug conducted at the manufacturers’ facilities. Pharmaceutical operations can largely be divided into API manufacturing and formulation development and production. Each of these disciplines requires independent Stability Studies that are conducted in chambers with specific, controlled temperature, humidity and other relevant physical conditions. At regular intervals such as 6, 12, 24 or 36 months, the samples are withdrawn from stability chambers and tested to see if there has been any degradation, loss of purity, impurity formation or any alteration in the drug product from its original condition. Till such time as no change is observed, Pharmaceutical companies can by law prescribe the use-by, re-test or expiry dates Most drug products today, especially those developed through modern-day biotechnology or chemistry technologies are highly specific in nature and sensitive to physical conditions of temperature, light, humidity and pressure. Temperature-sensitive, chemically unstable or photo-reactive drug products are particularly vulnerable to degradation in transit, and logistics are thus emerging as one of the key challenges in the global pharmaceutical trade. Increasingly, regulatory agencies such as the USFDA, European Directorate for Quality of Medicine (EDQM) or even the World Health Organization (WHO) are placing high emphasis on Good Transportation Practices and Good Distribution Practices for sensitive drug products. In 2013, the US Congress passed the Drug Supply Chain Security Act that gave the US FDA greater oversight on 30

transportation of pharmaceutical products in the US. In drug dossiers for each product that pharmaceutical companies submit to regulatory agencies around the world for approval, a special section is dedicated to the packaging of the drug product and many cases require disclosure of mechanism of transport and monitoring to ensure requisite physical parameters for the drug product are maintained In particular, temperature control is emerging as a key requirement in transportation of pharmaceutical products. For example, almost 80% of all pharmaceutical products entering the European Union are required to

Global shipping companies are also on the move to make the sea-route even more attractive by offering cutting-edge solutions to the pharmaceutical industry for product transport

have temperature-controlled transportation For products that are handled multiple times from manufacturer to end user, the challenge of temperature and physical parameters’ control is an especially complex one, which mandates highly effective systems of controls, monitoring mechanisms and a series of quality assurance systems all along the supply chain According to the pharmaceutical commerce’s annual Biopharma Cold Chain Sourcebook, the global market for transportation of temperature-controlled pharmaceutical products stood at US$13.4 billion and is expected to rise to US$16.6 billion by 2021 Until recently, long-distance distribution of products was undertaken by air, but there has been an increasing trend to move them by sea in refrigerated containers. Shipping

JANUARY 2019 • MARINE LINES

Priyvrat Gadhvi, MD La Chandra Pharmalab Private Limited companies are now focusing on offering customized solutions for transportation of Time and Temperature Sensitive Pharmaceutical products (TTSPP) Smart or ‘active’ containers that are fitted with temperature control, de-humidifiers for RH control and RFID systems to monitor various physical conditions offer pharma companies security of transport combined with the cost-advantage of a sea shipment, and are increasingly becoming the choice of transport for a wide range of drug products in the pharmaceutical cold chain Global shipping companies are also on the move to make the sea-route even more attractive by offering cutting-edge solutions to the pharmaceutical industry for product transport. Maersk offers a special platform and a customized quality management system (QMS) designed specifically for the pharma industry to attract its cargo. Through Remote Container Management (RCM), Maersk claims to offer customers full visibility and online monitoring of their cargo through satellite-based communication systems that engage with every container carrying sensitive cargo, and offer live-feed of the container’s location at sea, power-status, temperature, humidity and ventilation settings. A similar product was offered in 2015 by the Israeli ocean carrier ZIM Integrated Shipping Services, which launched ZIMonitor, after a successful pilot project with TevaPharmaceutical Industries. It subsequently announced the addition of some 1,900 reefers, or ‘active’ containers that enable continuous, online monitoring of physical parameters remotely to its containerfleet. In Europe, a Pharma Ocean Freight working group was formed in late 2016 to study and analyse the requirements of Pharmaceutical companies in shipping. It emphasised on the need to explore viable technology-based container shipment solutions for the Pharmaceutical industry, especially in emerging markets. The future therefore, would be bright for early-movers in this sunrise sector within the shipping industry.

MARINE LINES, January 2019. RNI No. Under Process, Title Code: GUJENG16193