SMP Aug Sep 2013

Shipping, Marine & Ports World

Your Radar to Shipping, Marine & Ports World

Vol - 6 Issue - 1 • AUG - SEPT 2013 • MUMBAI • ` 150

Vol-6 Issue-1

5th Anniversary

AUGUST - SEPTEMBER 2013 MUMBAI ` 150

110-12 February 2014, Mumbai, India M

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| Aug - Sept 2013 30-09-2013 17:25:58

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[CONTENT]

Contents

09

42

34

Interview 8 ‘It is Right Time to Corporatise Ports’

- N N Kumar, Chairman, JNPT

14 ‘Being Growth Market, India will Definitely

Attract Investments’ - Rajiv Agarwal, MD & CEO, Essar Ports

20 ‘We’ve Gone Below Sea Level in Shipbuilding’

- Cmde M Jitendran, Chief Consultant, Indian Register of Shipping

25 ‘Need to Revamp Entire Port Policy’

- Vishwas Udgirkar, Senior Director, Deloitte

38 ‘Transferring Japanese Shipbuilding Culture is

the Real Challenge’ - A V Pradhan, Regional General Manger – India, ClassNK

22 ‘Marine Environment - An Insight into

Salvage & Wreck Removal - Capt. Sandeep Kalia, MIIMS, RMS Features

27 Giving Impetus to Port Infrastructure

- Manish Saigal

Contents 4-6.indd 6

- Prof. Dr. GYV Victor

32 Freight Watch – July to August 2013

- Niteen M Jain & Nazir Ahmed Moulvi News Feature

34 World’s Biggest Ship Graveyard

- Rakesh Roy

35 Costa Concordia Salvage: Engineering Marvel

Marine Archeology

Guest Column

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30 Dragging Dredging Disputes

36 Discovery Mid-Nineteenth Century Schooner 44 News India 46 News Foreign 48 Marine Tech 50 Book Review

| Aug - Sept 2013 30-09-2013 17:25:59

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27-09-2013 19:46:39

INTERVIEW

‘It is Right Time to

Corporatise Ports’

The Indian Port sector is grappled with severe capacity constraint, poor hinterland connectivity, tariff setting restrictions, shallow draughts etc. While having exclusive interaction with SMP World, JNPT Chairman N N Kumar, feels that there is an urgent need to restructure the port sector in order to improve efficiencies and augment capacities.

N N Kumar Chairman JNPT

Can you please detail us about the growth of Indian Port sector? And also appraise us about the opportunities and challenges faced by the sector in the country?

in non-major ports by 2020. It is proposed that more than 80 per cent of the investment in major ports will be made by the private sector.

Port traffic in India has increased at CAGR of 8.1 per cent to reach 938 million tonnes with an average utilisation of ~90 per cent as compared to the international average of 70 per cent.

This is 96 per cent in the case of non-major ports — a very ambitious target, given the experience of PPP projects in port sector.

The main issues faced by ports include the severe capacity deficit leading to congestion, restricted draught, level of containerisation, custom procedures and insufficient connectivity to their hinterlands. The Maritime Agenda proposes an investment of ` 1,280 billion in 424 projects in major ports and ` 1,680 billion

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Interview_ JNPT 8-12.indd 8

Some of the key challenges facing PPP projects include environmental clearances, slow bureaucratic procedures at most major ports in pre-tendering and post-award stage, e.g., delays in dredging, lengthy tariff-fixing process and poor connectivity to the hinterland. Tariff setting is another major issue, which limits private sector investments in the sector.

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INTERVIEW Despite having a vast coastline of 7,517 kms, the progress of Indian port sector has been much below the expectations as compared to China, Korea, Sri Lanka etc. Please comment.

Yes. Inspite of our vast coastline, the progress of Indian port sector is way behind. Ports have to be provided with excellent infrastructure facilities. By developing large number of efficient ports in India, our country can become the largest international hub to deliver goods from West to the East and vice-versa.

The main factors that have led to inefficiency of the sector are: • Most major ports were originally designed to handle specific categories of cargo, which have declined in time while other types of cargoes gained importance.

The ports have not been able to adjust to the categories of cargo which grew the most. There are, thus, several berths for traditional cargo, which are underutilised, and only a few for new cargo, which are over-utilised.

• Over staffing at Indian ports remains rampant and productivity indicators in respect of cargo and equipment handling continue to be poor.

• Documentary procedures relating to cargo handling such as customs clearance requirements are unduly complicated and time consuming.

• Port access facilities and arrangements for moving inb ound and outb ound cargo are inade quate and unsatisfactory.

• Average draughts available at major ports are much below the international standards and therefore they are not able to handle bigger size vessels.

Inter-port and intra-port competition, which has been conducive to substantial productivity increases in other countries is absent in India due to poor inland connectivity and a policy regime that has protected domestic ports against competitive pressures.

Aug - Sept 2013 |

Interview_ JNPT 8-12.indd 9

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ď ›INTERVIEWď ?

The government is keen to increase efficiency of major ports to thrive in a competitive economy, especially when private ports are coming up close to the federal ones and making money through exim activity. It is necessary, that major ports are also prepared fully in terms of organisation, financial self-sufficiency & efficiency to face the competition. the berth would reach its full capacity within a period of three years and help ease congestion at JNPT. Privately operated non-major ports are giving a tough competition to the Central-G ov t controlled major ports. Please comment and how will corporatisation of major ports boost Indian port and logistics sector?

The better performance of non-major ports continues to be driven by their more diversified cargo streams, superior operating efficiency and infrastructure enabling diversion of cargo from congested major ports, and presence of captive cargo streams. Going forward as well this trend of non-major ports outpacing major ports in terms of cargo growth is expected to continue in the Indian port sector.

The consequences of these various shortcomings for the Indian economy are severe. Few large liner ships are willing to call on Indian ports as they cannot afford to accept the long waiting time. Indian container cargo is transshipped in Colombo, Dubai or Singapore resulting in additional costs and transit times. Ports are no longer mere modal interfaces between surface transport and sea transport.

They are now logistics and distribution platforms in the supply chain network. International trade has now become transport intensive and time sensitive and Indian ports clearly are not yet ready for this changing environment.

There is, therefore, an urgent need to restructure the port sector in order to improve efficiency and reduce costs.

JNPT has recently signed Concession Agreement with Nhava Sheva Gateway Terminal, a subsidiary of Dubai Ports World to develop standalone container terminal at JNPT. Sir, how will it help Indian Ports and Logistics sector?

The new container would add 8, 00,000 TEUs (twenty foot equivalent units) of container capacity. As the extension would become operational at a time where demand already exceeds supply of port infrastructure, it is expected that 10 |

Interview_ JNPT 8-12.indd 10

The government is keen to increase efficiency of major ports to thrive in a competitive economy, especially when private ports are coming up close to the federal ones and making money through exim activity. It is necessary, that major ports are also prepared fully in terms of organisation, financial self-sufficiency and efficiency to face the competition. Since a port is not really a social entity, but more or less a commercial venture and an infrastructure service provider, which has to function on a profit-making basis, the time is right to convert ports into corporate structures.

No new project has taken off at JNPT in the last ten years after Gateway Terminals project. Why? In infrastructure projects like ports, advance action and prospective planning is required considering the fact that there are many bottlenecks in clearances and the procedure of tendering is cumbersome. 4 th container terminal project of JNPT was delayed due to litigation on application of Monopoly Policy and subsequently concession agreement could not be signed with PSA due to the Port’s refusal to agree to their proposal for change in the composition of consortium after award of work. Now, we have adopted the strategy to plan projects very much in advance and lose no time to go for bids, etc, so despite the above mentioned risks and long drawn out procedures capacity creation will be well ahead of demand. JNPT is presently trying to create this flow in the strategic planning so that at no time in future should we find ourselves with inadequate capacity and to ensure that we follow the international norms of 60-70 per cent capacity utilisation in order to be able to cater to sudden increase (even seasonally) in import/export of cargo.

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INTERVIEW

•

•

Lack of lucrative government schemes: Unlike other channels of transportation, the government has not made any efforts to benefit coastal shipping users financially. Companies using coastal shipments until now had to face harsh and impartial taxes like no exemption from Income tax, customs duty on bunkers, landing fees, etc.

Slow and cumbersome process at customs: The shipment process is extremely slow and laborious compared to other modes of transport, which are much faster. Companies are unwilling to waste precious time in adhering to these processes.

What are your expectations from Govt policy on ports?

A fresh attempt to liberalise/improve regulation in the sector is expected. The acts of Parliament relating to this sector are under scrutiny for changes required with the times. Improvements in port regulation and capacity will have to be expedited through inter-ministerial initiatives; else the ambitious capacity increase envisaged by the Maritime Agenda 2020 may not be achieved.

Developed countries recognise coastal shipping as an important part of the overall transport network due to its more energy efficiency and eco-friendly nature.

What are the challenges faced by Coastal Shipping in India?

12 of India’s 26 states are covered by the sea coast, spreading across 7,517 kms and about 200 small harbours.

Despite a strong platform, the government has so far failed to transform coastal shipping into a lucrative business opportunity in India. Most cargo that can be transported via costal shipments are still being transported in traditional modes like rail and road. Coastal Shipping, as a complimentary mode of transport is not only an economic necessity but also a valuable asset in times of emergency.

Government is now making serious efforts for growth of coastal shipping. Coastal shipping in India faces the following challenges: • Lack of infrastructure: It is one of the biggest obstacles faced in coastal shipping industry. The government has failed to develop infrastructure that is expected to make shipment easy and efficient. Infrastructure involves electricity, road network and overall area development which supplement the use of this route.

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Interview_ JNPT 8-12.indd 12

Union Minister of Shipping G K Vasan launched Maritime Agenda 2020, which included creation of port capacity of about 3200 MMT to handle the expected traffic of about 2500 MMT by 2020. What will be JNPT’s role in achieving the target? Can PPP model help to achieve the expected capacity?

JN Port is set to become a mult-purpose port from a predominantly container port. M/s Howe has been engaged after global tendering to add 75 to 100 million tonnes per annum capacity by way of multi-purpose berths, converting JN Port into a global multi-purpose port from a container port. Additional liquid cargo berths of 30 million tonnes per annum capacity have been designed

by M/s L&T Ramboll, which are expected to be bid out by the end of this year. A state-of-the-art mega container capacity expansion involving terminals of capacity totaling 10 million TEUs per annum is under design by M/s URS Scott Wilson and is expected to be ready for global PPP bidding in 2014.

All these are expected to increase the current capacity of JN Port from 65 million tonnes per annum to around 320 million tonnes by the end of the decade. This is in line with the overall tripling of capacity by all ports in India envisaged in the Maritime Agenda 2020 of the Ministry of Shipping.

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8/5/2013 3:23:47 PM

INTERVIEW

‘Being Growth Market, India will Definitely Attract Investments’ As port is part of infrastructure development, the sector is riddled with problems arising out of environment, security clearances and land acquisitions. These clearances as well as acquisitions take a lot of time. Time consuming process for land acquisitions and clearances swell the cost of project, says Rajiv Agarwal, Managing Director and CEO of Essar Ports in an exclusive interview with Supriya Oundhakar. Excerpts: Despite having a vast coastline, China, South Korea, Singapore, Sri Lanka are giving a stiff competition to Indian Ports. Please brief us on the factors leading to dismal growth of Indian ports?

Yes. That is true. Indian Ports are not international hubs like many other countries such as Middle East, Sri Lanka, Singapore or Rotterdam. Our ports are lagging behind these international hubs in terms of container, liquid or on other fronts. These ports have not been competent enough to develop as international hubs on line of Colombo, Singapore or Rotterdam. But, Indian ports are self-sufficient in fulfilling the basic requirements of the country.

Some of the major issues, which are hampering the growth of Indian ports are shallow draughts, poor mechanization and rail road, and hinterland connectivity of port. These factors have led to congestion at ports, which has resulted in long waiting time for loading and unloading of cargo. It leads to long turnaround time for ships.

I think of late initiatives taken by Union Shipping Ministry for PPP projects for modernisation of ports may be a bit slow but definitely it’s happening.

Today, investors are facing a lot of problems like land acquisition, environment clearances, regulatory and bureaucratic hurdles for infrastructure development.

Due to this, they are not ready to go ahead with the projects. They are withdrawing from Indian markets.

Do you see a silver lining in such a scenario?

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Essar Ports 14-18.indd 14

Rajiv Agarwal Managing Director and CEO Essar Ports

Yes. I feel these raise a bottleneck. As port is part of infrastructure development, the sector is riddled with problems arising out of environment, security clearances and land acquisitions. These clearances as well as acquisitions take a lot of time. Time consuming process for land acquisitions and clearances swell the cost of project. Subsequently, there is decline in margins of the project. So, private players are not willing to take that risk.

But, I believe that India is a growing market. With the robust rise in demand, economy will revive and India will definitely attract good investments The performance of non major ports in cargo handling has been elevating since last few years. Major ports have been showing dismal performance. May we have your comments, please?

I read somewhere that major ports formed 90 per cent of the total capacity some ten years back. Today, they are about 55 per cent and in days to come probably they will reduce by 40 per cent. Major ports have lack of flexibility in meeting the needs of today’s competitive markets.

They are not able to match today’s market conditions. In the current market scenario, any business requires a lot of flexibility in meeting the requirements of the clients.

Port is a small but integral part of logistics chain supply. So, the capability and capacity of ports should facilitate the overall efficiency of logistics chain supply.

Ports’ efficiency plays the key role in determining the overall logistics economy. It’s like a chain as the cargo

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9/27/2013 7:59:23 PM

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9/28/2013 11:06:04 AM

INTERVIEW Ports’ efficiency plays the key role in determining the overall logistics economy. It’s like a chain as the cargo transported to the port is either loaded or unloaded from a ship and then it moves to its next destination.

Deeper draught allows handling of capsize vessel at a port. Proper mechanization of ports ensures smooth movement of cargo.

transported to the port is either loaded or unloaded from a ship and then it moves to its next destination. Deeper draught allows handling of capsize vessel at a port. Proper mechanization of ports ensures smooth movement of cargo. Availability of resources for storage of cargo at port is also one of the factors steering the growth of ports.

So, mechanization, deeper draught, turnaround time for a ship enhance port efficiency and capability. Somehow, the non-major ports have been flexible enough to achieve these requirements.

Major ports are controlled by union govt. So, they don’t set their own tariff. It is decided by TAMP. So, it is very important that they work efficiently without interference of TA MP. Congenial p olicies and reg ulations are dampening the pace of modernisation at major ports.

Recently Union Shipping Ministry has given some sort of authority to major ports to fix their own market-linked tariffs. How will it help to boost foreign investments in the sector?

Well, it’s a positive move. They have given some sort of flexibility. On the basis of reference tariff, major ports can fix the tariff up to a ceiling of 15 per cent above that. So, definitely it is a better step than what it was earlier. I think it will push investments in port sector.

PPP model for Gujarat ports under GMB has proved successful. How will it help other Indian ports to escalate performance vis-à-vis Southeast Asian Ports?

Gujarat has an important position on the West Coast of India. Gujarat has a coastline of 1600 kms and being locationally advantaged, it has a very rich hinterland, which has ultimately helped to propel ports development.

If you see in Northern Indian markets, Gujarat is the first state, which had ports even before Maharashtra. Due to GMB’s proactive and integrated approach, the growth of ports in Gujarat has proliferated under public private partnership model. I think still there is more scope for betterment and definitely they will achieve it.

Please brief us on pros and cons of Revenue Sharing Model in PPP as some experts believe that huge percentage of revenue sharing with the government ha s le d to cancell ation of fe w p or t proje c t s in the past?

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Essar Ports 14-18.indd 16

Yes. That’s true. Due to unrealistic, non-serious bids, some projects never see light of the day, which leads to delay in the whole process. As a result, the project is either shelved or being re-tendered. So, I agree that these high bids won’t help. And at the time of the implementation of the project if the investor realises that it is going to make losses, he neither gets funding of equity nor debt.

Now with deduced competition and more realistic people showing their interest I hope that this phenomenon may not exist further. Whenever the bid is going to open for any project, there is a lot of competition among bidders or developers just to grab the license. But as the industry matures, investors realise that just merely keeping the license won’t help to implement it. I hope in future we will have better bidding and more serious players coming in the sector.

What can be a sustainable model?

Well, it’s a combination of various factors. First, while conceiving a project, all the pros and cons of a project should be considered properly. Success of a project dep ends up on prop er estimation of investment s , good potential in project and market. Second, allied infrastructure like deep draught, creation of breakwater, hinterland connectivity, and storage area improves the efficiency and capability of a port. Proper infrastructure in place and estimation of project go hand in hand. If the investor is ready to invest in any particular project and proper infrastructure is not developed at that port, then that project never takes off. Third, the quality of bids, bidders, and revenue they share with govt should be realistic.

| Aug - Sept 2013

9/27/2013 8:01:47 PM

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9/27/2013 11:00:49 AM

INTERVIEW Last but not least is periodical review of revenue share model, because any project, which is conceived in a certain way, can never function with the same parameters for a long period. If the Govt has inflexible approach to change in conditions for productivity of the project, it will not sustain.

to see that good portion of our business comes from third party in some of the new projects setting up at Paradip, Vizag, Salaya and Hazira etc.

At the moment, the share of the business from group companies is 98 per cent. We have recently won the right to develop three iron ore berths at Vishakhapatnam.

The project is an existing project, where modernisation has to be done. It has very large portion of third party which will come to our ports.

It could be revenue share or license or combination. At the moment, I feel revenue share model is the sustainable model. But, there are some loopholes, which need to be addressed. While developing terminal or berth at a major port, tariff set up by TAMP is many times unrealistic, which removes the attractiveness of the project.

So, tariff fixation should be free from clutches of TAMP and developers should be given authority to fix their own tariff. I think forces of demand and supply should be the parameter in determination of tariff.

Last but not least is periodical review of revenue share model, because any project, which is conceived in a certain way, can never function with the same parameters for a long period. If the Govt has inflexible approach to change in conditions for productivity of the project, it will not sustain. So, the govt and concessional models should have integrated approach to work cohesively for further progress and development of the project.

As per a report, Essar Ports is in process of opening up to third party business. What are the challenges in getting the third party business? What is the share of the business from group companies? What are the company’s plans to boost third party business?

The biggest challenge we are facing sometimes is approval process with the port authorities. Our ports are getting enough business. The infrastructure developed at our ports is world-class with proper rail, road and hinterland connectivity. Essar ports is attracting a lot of customers.

Sometimes, we are not able to handle their cargo for some reasons. But, I think in times to come we are gearing up 18 |

Essar Ports 14-18.indd 18

Please comment on the factors which have led to an outstanding performance of Essar Ports this Quarter Q1 FY14. What is the exact volume of cargo handled in this quarter?

It’s a combination of results like growth, which we have seen in our customers’ volumes. We have shown the robust performance in terms of efficiency, turnaround time, and capability to deliver services at the cheapest possible cost.

4.08 million tonnes of cargo handled during the quarter as against 12.65 million tonnes of cargo handled during Q1 FY13 registering a growth of 11 per cent.

What changes would you like to see in Govt policy on port sector?

We feel that there is need to do a few things and one is of course that there should be a more relaxed regime on the tariff front of the major ports. Second, we are expecting that policy for captive ports should be announced. And these ports should be allowed to handle third party cargo so that whatever capacity they are creating is world-class.

Third, the land policy and the flexibility of operations at major ports should be there so that decision making is faster and it helps in overall development of the port sector and also helps in success of PPP projects.

What are your plans to augment the port capacity and efficiency in the future?

We have plans to develop about 184 million tonnes of capacity at our ports and we have achieved about only 104 mmpta and by end of this FY we hope to create 127 mmpta. In the next two years, we hope to achieve our targeted capacity.

| Aug - Sept 2013

9/27/2013 8:02:07 PM

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9/28/2013 11:20:37 AM

INTERVIEW

‘We’ve Gone Below Sea Level in Shipbuilding’ While interacting with SMP World, Cmde M Jitendran, Chief Consultant, Indian Register of Shipping, says that shipbuilding requires a 50 to 100 year perceptive plan, which must be sustained without change as it directly contributes to economic development. Market volatility and fluctuations should not be allowed to seriously affect this vital industry. Excerpts: With a long helm of more than two decades in the Indian Marine industry, what is the drastic evolution you have witnessed in this period?

In my view, we have come full circle and now gone below “sea level” in shipbuilding. During the last decade, in 2003 the Indian shipbuilding share in global market was a meager 0.2 per cent. In 2008, we were able to grab 1.3 per cent. But now we are much below the mark we crossed in 2008 due to delays in many projects and many shipyards facing financial crisis. The fact that ship repairing business provides a buffer solution to overcome slowdown period has not been taken seriously. World economy is showing recessionary trends and shipping industry is sailing through troubled waters. Despite having opportunities in investments in port infrastructure, the progress is not even on the horizon. On the other side, Gujarat ports under GMB have made progress very well and Indian ship recycling industry has gained topmost position in the global markets.

What is your perception about of the growth of shipbuilding in the current market scenario? Please detail the opportunities and challenges faced by the sector in the country?

Being capital intensive cyclical industry, shipbuilding sector requires long–term perceptive plan of 50-100 years, which can be sustainable for longer period thus contributing to economic growth of the country. Market volatility and fluctuations should not be allowed to seriously affect this vital industry. In India, shipbuilding sector can’t make progress on five-year plan basis. However, there are huge 20 20 ||

Interview_ IRS 20-21.indd 20

Cmde M Jitendran Chief Consultant Indian Register of Shipping

opportunities in coastal shipping. Being energy efficient, coastal shipping can be developed for smooth movement of cargo along the huge coastline of India. It will also ease traffic congestion at our ports. Building of such coastal vessels in our shipyards under Indian flag, providing worldclass ship repair services, development of dredging industry will augment economic growth, which will ultimately boost Indian economy. All these require long-term plans. Each of these opportunities can be executed into a reality with the support of proper policy and regulatory framework in place. Development of this sector will create immense opportunities in education, employment and services related to this field.

Despite having 10 Govt-owned and more than 50 private-owned shipyards in the countr y, India represents a mere 1.3 per cent of the global shipbuilding share. Can you please apprise us the factors, which have led to such a meager share in global market?

As I mentioned earlier, we had climbed to about 1.3 per cent, five years ago but are nowhere representing that volume today. Importantly, even five years ago, it was mainly foreign ship owners who placed orders in Indian shipyards.

There were hardly any domestic orders. The Government also opened the shipbuilding subsidy scheme to private shipyards with effect from 2002, which gave the industry a huge boost and created massive employment opportunities.

This scheme was discontinued for all shipyards, public and private in 2007 and we quickly became uncompetitive.

When shipping took a downturn and foreign ship owners stopped placing orders in Indian shipyards, we started lagging behind and have now reached a stage where it

| Aug - Sept 2013

9/28/2013 11:32:43 AM

INTERVIEW Indian shipbuilding sector can’t propel unless and until there is an integrated approach towards the development of ports, roads, railways, electric power and water supply along with shipyards. Shipbulding can’t grow in isolation to 5 per cent by 2020 if it is only and fully export oriented and caters only to foreign market with domestic subsidy support. would be very difficult to secure export orders due to flight of skilled personnel to greener pastures. If the industry is dependent on export orders only, then it cannot be immune to market downturns. There must a thriving domestic demand for sustainability.

In the last decade, India has come up with only two new shipyards - one at Pipavav in Gujarat and the second at Kattupalli in Tamil Nadu, and other potential investors have either deferred the Govt’s proposed plans or abandoned them altogether due to the weak outlook/ market . What are the fac tor s , which have le d to this situation?

To promote shipbuilding, there is a need to develops domestic shipping market, which should be able to utilise 50 per cent of domestic shipyard potential. Absence of domestic players to tap local shipyards capacity may lead to involvement of international players in capacity utilisation. In such a situation, we cannot be immune to market forces and sustainability will depend on a viable book order position. Hence, steady long-term policies such as building of coastal ships in India under Indian flag, building 100 per cent of cargo ships required by India to execute at least 40 per cent of our EXIM trade as compared to less than 10 per cent now, designing and building our own dredgers, promotion of island tourism and cruise shipping etc. are some of the factors that will ensure domestic shipping growth and we won’t become a victim of weak global outlook/market. This is sustainable as 97 per cent of our EXIM trade is executed through sea and the volume is growing every year. I think this is not going to change for next 50 years or perhaps forever.

As per the Maritime Agenda 2010-2020, the government proposes giving a boost to Indian ship building in order to achieve a global market share of 5 per cent by 2020. As per you, what will be the future roadmap to achieve it?

Indian shipbuilding sector can’t propel unless and until there is an integrated approach towards the development of ports, roads, railways, electric power and water supply along with shipyards. Shipbulding can’t grow in isolation to 5 per cent by 2020 if it is only fully export oriented and caters only to foreign market with domestic subsidy support. Long-term investment plan coupled with investor-friendly policy and regulatory framework in place will help to achieve sustainability in shipbuilding sector.

Shipbuilding is a globalised, technology and capital intensive industry, with high volatility. In your view, how will the public-private partnerships (PPP) model continue to explore the development of shipyards in India?

India being a vast country, only one type of PPP model or government-funded shipyards won’t be sustainable for a long period. Shipyards in different states have to develop competitively depending upon local conditions and prevalent culture in that area. Shipyard performance will have to be tailored to deliver high quality ships at international prices within internationally acceptable timeframes even for domestic requirements. Hence, we need globally competitive shipyards. Those built only for domestic consumption will be a drag.

What would be your wish-list in terms of Govt. policy which could make the shipbuilding industry more viable in India?

Shipbuilding needs enormous amount of coordination, guidance and leadership at different levels to escalate performance. I feel leadership crisis is one of the reasons for the current scenario of shipbuilding sector. There is need to spread awareness about importance of maritime industry contributing towards economic growth of the country. It will not be possible to become a super power by avoiding shipbuilding. I think that govt should take initiatives to frame policies which will be favorable for coastal shipping, ship repair, conversions, dredging etc.

What is the way forward?

With bankers tightening liquidity and oversupply of vessels in the market, all rating agencies have predicted a gloomy picture for the global shipping industry. So, the market is going to be volatile for the next two years at least.

While US is climbing to recovery, there is still recession in Europe and growth in Asian countries is going to be low.

So, demand is not going to pick up soon. So, this is the best time to put our house in order and build a bright future for India in maritime industry. Good leadership should forge new alliances and plan expansion of existing ones tailored for domestic growth in shipping, port infrastructure and shipbuilding in a well diversified manner. There must a focus to cut greenhouse gases from the maritime industry of the future. Thousands of beautiful, eco-friendly, indigenously built ships must dot the long coastline of a vibrant and booming India performing a variety of functions.

Aug - Sept 2013 |

Interview_ IRS 20-21.indd 21

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9/28/2013 11:34:57 AM

GUEST COLUMN

Marine Environment -

An Insight into Salvage & Wreck Removal Capt. Sandeep Kalia, MIIMS, RMS Executive Director, GOL Salvage Services Limited Vice President, ICC Shipping Association (ICCSA)

“Whenever we are trying to achieve, there will be road blocks. I’ve had them, everybody has had them. But obstacles don’t have to stop you. If we run into a mountain, we won’t turn around but figure out how to climb it, go through it, or work around it”. This is the conviction of our Guest Columnist Capt. Sandeep Kalia, Executive Director - GOL Salvage Services Limited (ISU member), an arm of GOL Offshore, who has credited of several complex & challenging Salvage, Wreck Removal & Rescue operations.

T

he sea is perhaps a multifaceted environment in which man works. It is capricious, difficult and a marvel. It has countless moods, some mesmeric and some challenging. Shipping is the lifeline of world trade. While many economies face complexities, the shipping sector struggles with over capacity and poor charter rates. However, the trade continue.

While the maritime technology has changed beyond recognition in the past century, the human factors and the executive factors have not. As human innovativeness has steadily found its way into shipping, skills required has evolved from being purely physical to being increasingly intellectual in nature. Accidents do occur and will continue to occur. They happen for the same underlying reasons, despite the technological advancement in the last century and despite all safety regulations and precautions. From Titanic (1912) which was considered to be the unsinkable, the grounding of ‘Costa Concordia’ in 2012, a masterpiece of modern technology, has highlighted that even with substantial

22 22||

Guest Column - Kalia final 22-23.indd 22

technological advances, shipping casualties will continue to happen.

One vital sector of the shipping industry is Marine Salvage - the process of rescuing a ship, its cargo, or other property from Peril. A lot has changed since the Salvage Convention was first drafted. Environmental issues now dominate every salvage case and what may have been a satisfactory ‘encouragement’ then is no longer so today. The salvor’s main objective is to keep the pollutant within the damaged property. Safety of human life is the top priority during every operation. Stabilising the situation to preclude the event from worsening is the next priority.

The economics of this industry has changed as well. In most industries investment decisions are based on analysis of the return on capital employed. Salvage being a casualty related business, does not encourage capital investment based on five year projections, however, high capital intensive investment is imperative. It cannot be done without large, powerful tugs and

|| Aug Aug -- Sept Sept 2013 2013

9/28/2013 12:11:01 PM

GUEST COLUMN Salvage being a casualty related business, does not encourage capital investment based on five year projections, however, high capital intensive investment is imperative. It cannot be done without large, powerful tugs and an assortment of expensive equipment in order to be ready for casualties.

Oil spills and leaks have resulted in substantial damage to marine ecosystems.

an assortment of expensive equipment in order to be ready for casualties.

leaving our Central & State Government helpless, due to absence of regulatory framework to enforce provisions for removal.

The Indian Scenario The country has been facing increasing human pressures over exploitation of marine resources, dumping of industrial and toxic wastes, oil spills and leaks which have resulted in substantial damage to our ecosystems. The collision between MSC Chitra & MV Khalijia III in 2010 was an eye opener and had exposed the country’s readiness to handle causalities of such magnitude in a major port.

Lack of coordination between various agencies / authorities, compliance with national & international rules, improper communication & signals, complacency, attitudinal & behavioral changes have all contributed to increase in the causalities & their severance. This was followed by un-detected guests, M V Wisdom & M T Pavit in 2011, stranding on our national beach. The latter was abandoned in Oman and had drifted across the Arabian Sea, stranded on Juhu Beach in July 2011, undetected, breaking multi layer security cordons while questioning & raising National security concerns. Furthermore, the owner of the vessel & it’s P&I club abandoned the vessel

An indigenous salvage company came forward & executed the successful Salvage operation under explicit directives of the Central government on 15 th August 2011. Their ordeal continues for two years now, as the Central Government has still not been able to compensate them for their professional services, leave aside any empathy for their selfless deeds. M V Rak Carrier is another classic example abandoned 20 nautical miles of the Mumbai coastline with 60,000 tons of coal inside the cargo holds.

Wreck Removal If a casualty is beyond economic recovery it may become the subject of a wreck removal operation. There are more than 450* abandoned wrecks along the Coast. A high proportion of the wrecks are in poor condition and pose an immediate threat to our ecological systems. Shipwrecks, together with ocean acidification and waste dumping into the seas are among the biggest sources of pollution. Oil pollution from these wrecks and in general have an adverse impact on marine biodiversity and direct effects on the Aug Aug -- Sept Sept 2013 2013 ||

Guest Column - Kalia final 22-23.indd 23

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9/28/2013 12:13:41 PM

GUEST COLUMN The response to any maritime causality would involve many government agencies and organizations at the central, state and local levels. The oil or the wrecks, if it is to be removed, needs to be funded by local governments.

A number of funding options could be explored, including expansion of existing ones or development of new ones patterned after successful funding mechanisms that needs to be in place. Oil pollution cess is one among many.

Cabotage Law & Capacity building

Abandoned M T Pavit raises security concern to the National Security.

socio economic balance of the affected region. The delay in decision making / finalization of a salvage contract & finally responding to an emergency situation by the Ship Owners, Authorities, Administration individually or collectively, turns the salvageable scenario into a Wreck.

Time is of essence & every second counts.

The Wreck Removal Convention was adopted by IMO member governments at a diplomatic conference in Nairobi in May 2007. This Convention extends the powers of Coastal States to take action to remove wrecks posing hazards in the Exclusive Economic Zone (200 NM). It will enter into force one year after 10 IMO member states have ratified. So far a total of 6* Member states have ratified this convention. An important aspect of the convention is that once in force, the right of states to order the removal of wrecks will extend from territorial waters to 200 NM EEZ. India has acceded to this convention but until enforced we have no control over the wreck remains which are abandoned in our waters, outside the navigable channels.

Economic & Political Challenges One of the key challenges is the way in which the various national and international regulatory frameworks and environmental considerations come to bear on salvage and wreck removal. Indian law with respect to wreck removal is laid down in Part XIII of the Merchant Shipping Act, 1958 and in the Indian Ports Act, 1908.

As per these acts the Ship Owners are legally liable to remove the wreck only within the territorial waters, if the wreck is a hazard in a shipping lane or close to a navigation channel. Due to absence of binding legislation, Owners and their clubs are not obliged to remove these wrecks, if they are not impeding the Navigable channel. Causality response readiness could be significantly enhanced by having resources within the country facilitating improved interagency coordination.

Concern is also expressed on adequate funding methods that are not in place to cover an effective salvage response.

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It is rather unfortunate to submit that there have not been enough efforts, encouragement or reforms by the Government to promote or support aspiring or established Indian salvors, provide them with level playing platform vis-à-vis international salvors. This lack of support from the government is deterrents for prospective players envisaging to enter this business. There is an imperative need to reform our cabotage law, provide the first right of refusal to Indian companies and promote capacity building.

In my opinion there is no dearth of professional talent, skills & professionalism in Indian Nationals. Lack of recognition of national competence is purely driven by ignorance. This has to change. Our country has internationally recognized and fully established salvage company/s which can operate beyond the country’s borders.

Summary & Conclusion Salvage business has evolved over many centuries. The conditions are quite different today from what they were in early 80s. Environmental concerns are even more significant today and play a far larger part in operation than they did 3 decades ago. For example the bunker fuel capacity of modern day shipping is conspicuously in excess in comparison.

Modern day bulkers, box ships, tankers and cruise liners have fuel carrying capacities well in excess of 5,000 tonnes.

Lessons learnt from Deepwater Horizon’s (Macondo) oil spill incident in Gulf of Mexico entails that we seriously revisit our response capabilities for a “Tier III” level spill and beyond. While we are fortunate that the country has not witnessed such an incident, with increase in oil trade and E&P activities, the possibility cannot be ruled out!

While salvor’s objective is to protect the environment whilst carrying out salvage operations, sadly, they are sometimes not rewarded for the services they offer. This has to change!!

The next generation of container ships with 18000 TEU capacity present colossal challenges. With the shipping industry experiencing the worst recession ever, how we meet up with the demands of heavy capital investment to cater to ever growing tonnage will determine how dynamic the Salvage business is for the generations of tomorrow!!

| Aug - Sept 2013

9/28/2013 12:13:45 PM

INTERVIEW

‘Need to Revamp Entire Port Policy’ India port sector has been going through slow phase growth. While interacting with SMP World, Vishwas Udgirkar, Senior Director, Deloitte, feels that need to develop international transshipment hub on line of Colombo, Singapore to give an edge to international ports. He shares his views about opportunities and challenges faced by Indian major and non-major ports, pros and cons of revenue share model and many more. Excerpts: Despite having a vast coastline, China, South Korea, Singapore, Sri Lanka are giving a stiff competition to Indian Ports. Please brief us on the factors leading to dismal growth of Indian ports?

India lacks an integrated approach for port sector development. There are government owned port trusts for managing major ports, where tariff is regulated, and there are non-major ports, where there is complete flexibility on tariff fixation. Significant bureaucratic hurdles and slow decision making have resulted into constrained development of ports in India. Indian ports need upgradation through enhanced storage areas, better inter-modal connectivity, increased draft and better port facilities. Lack of international hub at Indian ports is giving a run for its goods in global market. Capsize vessels are not able to call on Indian ports due to shallow draughts.

So, we have to export/import cargo via international hubs like Colombo, Singapore etc. Underdeveloped coastal shipping and inland waterways is another issue in port sector in India.

Meanwhile other countries have realised their plans of developing international hubs, port based industrial cities, and transshipment terminals. For example, seven to eight years back Sri Lanka took initiatives and invested massively to develop Colombo port as transshipment hub, where containers come from various places in world and then transship to their destination places. Indian ports like Chennai, Tuticorin, Cochin etc compete among themselves. Instead of competing among them, there is a need to focus and develop one port having world-class infrastructure on the lines of Colombo port so that it will

Vishwas Udgirkar Senior Director Deloitte

be able to give an edge to international ports illustrated here. Due to different ownerships of ports, we are not able to concentrate on one port, which can be developed as a massive port. Indian ports also have lower efficiency which leads to long turnaround time.

Sir, can you please appraise us about the opportunities and challenges in the Indian major and non-major port sectors?

Maritime Agenda 2020 envisages nearly tripling of the port capacity in India to 3.2 billion tonnes (bt) by adding capacity in existing ports and development of greenfield ports. This presents tremendous opportunities in the port sector. However, the trend till now in form of delays in project development award is not encouraging.

One of the foremost challenges for major ports is confusion over tariff regulation. There has been continuous dialogue and multiple revisions in the tariff regulation approach f o r m a j o r p o r t s , h o w e v e r, t h e s a m e h a s n o t l e d t o positive results.

Another major challenge, affecting major as well as nonmajor ports, is lack of focus on developing inter-modal connectivity with hinterland. Inter-modal connectivity has significant impact on the port attractiveness and viability. We can already see results of better connectivity in form of performance of Mundra port, Pipavav port, JNPT etc. There are other challenges also in form of delays in environmental and security clearances, ban on iron-ore mining by Supreme Court, reduction in coal imports for power projects and general economic slowdown.

Aug - Sept 2013 |

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| 25

9/28/2013 12:37:51 PM

INTERVIEW Sometimes private players end up offering a large portion of revenue with the trusts just for getting award of the project and such unrealistic bids lead to failure of the project. Giving more flexibility to private firms in tariff fixation for major ports can give better certainty to private firms while bidding for the projects.

What are the pros and cons of revenue share model?

Revenue share in port sector is quoted as per cent of revenues. This ensures that the revenue shared with the port trust varies with the revenue amount, unlike highway sector wherein fixed revenue share amount is shared.

However, such revenue share comes out of the tariff and thus it is debatable that should Government be asking for revenue share or should it seek reduced tariffs so that ports can be used to give impetus to overall economy. However, this requires a well-thought and robust contractual structure as unlike other transportation sectors like highways, airports etc., competition management is a crucial factor, because of significant overlap in port catchment areas and high propensity to shift amongst users. Furthermore, sometimes private players end up offering a large portion of revenue with the trusts just for getting award of the project and such unrealistic bids lead to failure of the project. Giving more flexibility to private firms in tariff fixation for major ports can give better certainty to private firms while bidding for the projects.

What can be the sustainable model?

An alternative model can be when the bid parameter is tariff i.e. bidder who quotes the lowest tariff for the best optimal services would get the opportunity to develop and operate port. While this can make our ports more competitive compared to international ports, there are certain pitfalls also. Such model would reduce flexibility of variation in tariffs over a period of time, depending on market conditions. Also, it can lead to unrealistic bids, which can hamper the project execution. Another option is to improve existing revenue sharing model. For improving revenue share model, autonomy should be given to private investors in major ports to fix tariffs. If the private sector is allowed such flexibility, it can lead to optimisation of operations and investments, lower tariff, as well as efficient and market oriented business planning.

Today, investors are facing a lot of problems like land acquisition, environment clearances, regulatory and bureaucratic hurdles for infrastructure development.

Due to this, they are withdrawing from Indian markets.

Do you see a silver lining in such a scenario?

That is the story across the entire infrastructure sector.

Investors are facing a lot of challenges as world economy 26 26 ||

Deloitte 25-26.indd 26

is showing recessionary trends and also investors’ perception relating to policies has gone down. Even setting up of a taskforce taking care of clearances at all projects hasn’t helped in boosting the investments in the sector. This coupled with confusion on aspects like tariff regulation of major ports, environment & security clearances, ban on mining, reduction in coal imports etc. is leading to general disinterest and cautious behavior.

Next year India would be going for elections. After elections, there can be review of policies. This combined with positive economic indicators may lead to renewed interest and focus on port sector.

What are the factors which are hampering foreign investments in the port sector? What is the way forward?

In general, economic scenario and lack of policy impetus is affecting infrastructure sectors and port sector is not an exception. However, port sector also has certain sectorspecific issues, which are hampering foreign investments.

Environment and security clearances take one to two years for any port project. Long delay in such clearances increases the cost of the project and as a result, financial viability of the project is affected. Another key concern is uncertainty and continued dissatisfaction relating to the tariff regulation policy for major ports. Furthermore, even when some port projects seem to be have good financial viability, factors like lack of hinterland intermodal connectivity create risks for investors. Recently, uncertainties and other issues relating to coal imports and mining ban in certain parts of India have also contributed towards reduced investor confidence in port sector in India.

To address various sector-specific issues, corporatisation of ports can give more teeth to operators to work more efficiently. Government has been trying for this many years. But, it has not been able to break any ice on this issue. One nodal organisation for developing ports infrastructure can help in comprehensive planning and faster execution of projects.

This organisation can chart out some plans and carry out some groundwork on general aspects like dredging capacity, inter-modal connectivity, clarity on tariff regulation, clearances etc. Piecemeal improvements here and there won’t help the port sector in long term. There is need to revamp the entire port sector policy.

| Aug - Sept 2013

9/28/2013 12:39:33 PM

FEATURES

Giving Impetus to Port Infrastructure Despite having a huge coastline, Indian ports are not able to match capacity and capability of international ports in terms of efficiency, mechanisation and hinterland connectivity. Indian ports infrastructure is not able to support growing demand of handling cargo. The sector needs to overcome financial and lack of basic infrastructure bottlenecks and gain the firm footprint in global market through PPP model coupled with congenial policy and regulatory framework in place.

I

ndia’s ports serve as gateways to the country’s international trade and facilitate the 90 per cent by volume and 70 per cent by value of country’s external trade via maritime traffic. The country’s long coastline spans across 7,500 kilometers (kms) with 13 major ports governed by the Centre and about 176 non-major ports, of which only 60 are operational, governed by respective state governments and union territories. Of its major and non-major ports combined, 139 are along the west coast, while the remaining 50 ports are along the east coast.

The Indian port traffic has witnessed significant growth over the last decade, growing at a CAGR of 8.4 per cent from 384 mmt in FY02 to 934 mmt in FY13. Following a temporary deceleration in cargo traffic due to the global economic slowdown between FY08 and FY13, cargo traffic across Indian ports is expected to touch 1,304 mmt by FY17 at a CAGR of 8.7 per cent, with major and non-major ports expected to grow at a CAGR of 8 per cent and 10 per cent respectively.

However, development of port infrastructure has not kept pace with the increasing demand for better cargo handling 600

Port infrastructure The Government of India (GoI)’s ambition to replace the National Maritime Development Program (NMDP) with the more comprehensive Maritime Agenda 2010–20 is in line with its objective to increase port capacity. It intends to encourage private investments in major and non-major ports and bring port performance on par with international standards. Through this program, the GoI plans to invest ` 2,870 billion in generating total port capacity of 3,200 mmt and cater to an expected cargo traffic of 2,500 mmt by the end of 2020.

Given the pivotal role it plays in the economy, the Indian ports sector appears to be well-poised for a longterm growth wave. The key growth drivers that will lead to the path of development include public-private partnership (PPP), growth of non-major ports, increased containerisation and east coast ports.

570

561

530

519

facilities at ports. As a result, the majority of Indian ports are operating at an above optimum capacity than required for efficient ports performance.

560

545

Million tonnes

500 400 289

300 203

315

353

389

213

200 100 0 FY08

FY09

FY10 Major ports

FY11

FY12

FY13

Non-major ports

Figure 1: Traffic handled by major and minor ports Source: Indian Ports Association

Aug - Sept 2013 |

Ports in India_Nimit 27-29.indd 27

| 27

9/28/2013 5:19:34 PM

FEATURES 3500

3,200

million tonnes

Phase 3

Phase 2

Phase 1

3000

2,350

2500 2000 1500 1000

1,240 963

500 0 2009–10

2011–12

2016–17

2019–20

Figure 2: Capacity creation targets till 2020 (based on Maritime Agenda growth estimates)

Public-private partnership (PPP) PPP is expected to play an important role in the ports sector, particularly in the development of non-major ports — private investment is expected to contribute 66 per cent and 98 per cent of total investments in major and non-major ports, respectively. The development of two new major ports is expected to reduce the above-optimum capacity levels in existing ports.

Growth of non-major ports Between 2007–08 and 2012–13, cargo traffic at non-major ports increased at a CAGR of 14 per cent over a CAGR of 1 per cent at major ports; its share increased from 28 per cent to 39 per cent, clocking 389 mmt in total traffic versus 545 mmt at major ports. During this period, cargohandling capacity at non-major ports also witnessed higher growth than major ports.

2007-2012

Capacity overruns at major ports aided by a substantial increase in the cargo traffic of fertilizers, building material and coal, have resulted in significant investments in the development of non-major ports. Under the Maritime Agenda, maritime states have set ambitious targets to create additional capacity of 1,290 mmt at an estimated investment of ` 1,680 billion between 2010–11 and 2019–20.

The growth in traffic at non-major ports over the past few years has been primarily led by the development of ports in Gujarat, mainly Mundra, Pipavav and Hazira ports. These non-major ports are expected to cater to the northern region’s cargo traffic, thereby reducing load on the Jawaharlal Nehru Port Trust (JNPT) and Mumbai ports. With the emergence of ports in Dhamra, Gopalpur, Gangavaram, Kakinada, Machilipatanam, Krishnapatnam, Kattupalli and Karaikal, the east coast is also expected to contribute to the development of non-major ports.

2012-2017

100% = ` 690 billion

100% = ` 1,806 billion

The contribution of private sector investments is expected to increase significantly.

Note: Figures mentioned are investments envisaged for each duration as mentioned in the Working Group Report by PC • IR: Internal resources • EBR: Extra budgetary resources • GBS: Budgetary support • PPP: Public-private partnership

Figure 3: Sources of income for ports Source: Maritime Agenda 2010–2020

28 |

Ports in India_Nimit 27-29.indd 28

| Aug - Sept 2013

9/28/2013 5:24:43 PM

FEATURES Containerisation The EXIM container market in India has grown at a CAGR of 12 per cent in the last five years, as compared to the 8–10 per cent growth of other commodities such as POL, iron ore and coal in the same period.

Growth in the container market is expected to continue in the medium term as a result of rising containerisation l e v e l s a n d g r o w t h i n t r a d e . At 5 1 p e r c e n t , t h e containerisation level in India continue to fall short of that in developed countries, which have achieved significant levels of 70–80 per cent.

The following trends are expected to drive growth in containerised cargo: • Increasing containerisation level for former break-bulk commodities (eg steel, cement, rice and sugar) • Healthy growth prospects for industries contributing to container cargo (eg textiles, food products, machinery, paper and scrap) • Development of dedicated freight corridors (DFC) and the Delhi-Mumbai industrial corridor (DMIC) along the north-west corridor: expected to drive demand for container logistics infrastructure • Growing thrust on developing container terminals on the east and west coasts of India • Development of dedicated logistics parks for handling container and bulk cargo • Development of new terminals with facilities to handle deep draft vessels operated by Main Line Operators (MLOs) East coast ports

H i s t o r i c a l l y, w e s t c o a s t p o r t s h a v e d o m i n a t e d cargo traffic due to their proximity to India’s major consumption centers and the industrial belt of northwest India. With China’s emergence as India’s leading trade partner, India’s ‘Look East’ policy and overcapacity at west coast ports, east coast ports present significant development opportunities.

Outlook H i g h e r i nv e s t m e nt s , p r i v ate s e c to r p a r t i c i p at i o n and stringent regulations play an integral role in the development of world-class ports in India. Simultaneously, development of hinterland connectivity options, enhancing levels of IT, and facilitating quality manpower training would drive operational efficiency of Indian ports.

The implementation of the Port Regulator y Authority Bill is expected to be a step in the right direction, as it is likely to increase confidence among private investors. The introduction of single-window clearance method at centraland state-government level would encourage greenfield projects, thereby reducing long gestation periods.

Thus, innovative solutions and a proactive approach are the need of the hour if the Indian ports sector has to gain a competitive edge, especially as it is far more vulnerable to international competition than other infrastructure subsectors. Measures are being adopted and implemented, and the outlook for the sector appears positive. With the government responding to multiple factors, such as infrastructure constraints, financial bottlenecks and administrative hurdles, the future of the ports sector looks bright.

With their contribution to India’s total trade expected to increase from 23 per cent in 2010 to 34 per cent in 2014, the 50 ports along the east coast — situated along the 2,630 km-long eastern coastline that stretches from West Bengal to Tamil Nadu — are expected to significantly drive growth in the ports sector. Through the Maritime Agenda 2010–2020, the GoI plans to create additional port capacity of 900 mmt and invest ` 1,126 billion to boost cargo-handling capacity at ports along the east coast.

Non-major ports are expected to contribute 57 per cent of the total investments and 46 per cent to the total capacity added in east coast ports.

Traditionally, east coast ports, which are closer to iron ore/coal deposits and power, steel or fertilizer plants, have handled bulk commodities, as opposed to west coast ports, which mainly handle POL and container cargo.

The container-handling capacity at the east coast ports is expected to increase from 2 million TEUs in 2009 (20 percent of India’s total container handling capacity) to 10.8 million TEU by 2020 (33 per cent of India’s total container handling capacity).

Author: Manish Saigal Partner and National Leader – Transport and Logistics Industry KPMG

Aug - Sept 2013 |

Ports in India_Nimit 27-29.indd 29

| 29

9/28/2013 5:25:15 PM

FEATURES

Dragging Dredging Disputes Indian ports are not efficient in handling capsize vessels due to shallow drafts. Dredging is need of the hour to increase depth of ports. To run the operations of port hassle-free, it is necessary to resolve disputes between dredging contractor and port authority. In this article, author suggests that the employer should involve dredging contractors in the port development project since the early stage of bidding process.

M

ost of the India’s state owned ports are in doldrums to achieve and honor the commitments provided to the private terminals/private cargo handlers those who operate under BoT mechanism. The port struggles to provide safe navigational approach channel and the berth pockets to attract large, deeper drafted vessels to the port. It is imperative from the NMD Policy, the minimum depth of the ports shall be increased to (-) 16 m CD against the global average depth of the port being at (-) 21 m CD, either capital or capital-cummaintenance dredging is required to increase the depth of the ports. Since dredging is predominately undertaken by either the state owned or private dredging companies, any difference or dispute between the dredging contractor and the engineer shall have direct bearing on the operations of the port. Such direct bearing of the impact on the operations of the port shall lead to fall of cargo and reduced income to the ports. The dredging market in the next five years is estimated to be 3 Billion Indian Rupees.

Dredging contracts are normally governed by the tailor made FIDIC contract documents in India that are project, location and employers specific documents failing to address certain critical and important essence of the contract (The author earlier in 2012 published the difference in the tailor made contracts that fail to address the essence of the contract).

Still recently, the Indian ports were tendered on the unit rate basis calculated on the quantum of the dredged material

Risk Factor Contractor

Employer

Reward

COST

Contract from the substrata. Keeping abreast the dredging cycle of supply management, the employers moved from unit rate to depth based contract. Though the depth based contract has its own disadvantages over than few advantages, the employers preferred the depth based contract to reduce their supervision and engineering methods. With the dredging cycle turning to the zenith with surplus supply, the employers are foreseeing to adopt the method of BoT mechanism for dredging and or the PPP participation for dredging, and such mechanism shall be self-sufficient to generate its own funds and sustain themselves for the operation. The method that is foreseen by the employers

Segment

Low

Medium

High

Area of Operations

Small or low volume dredging

Maintenance or known quantity dredging

Capital or large quantity dredging

Equipments availability Good

Better

Not many dredgers

Risk factor

Negligible

Known risk, anticipated risks and calculated risks

Unknown risks due to scanty information, loaded risks

Risk analysis

Low to medium

Medium and sometimes high

Moderate to high

Tenders followed

FIDIC and tailor made

FIDIC in the form of Government guidelines with ‘depth-based tender‘

FIDIC in the form of Government guidelines with ‘depth-based tender‘

30 |

Dredging.indd 30

| Aug - Sept 2013

9/28/2013 2:46:27 PM

FEATURES shall be based on Landlord concept where the employer shall be deemed as landlord.

In all the above different approaches in formulating the dredging contract, the basic essence still remains unchanged whether the approach is on unit rate or depth based or PPP or BoT mode of contract. This basic essence of the contract is widely the biggest challenge that is encountered by the dredging contractor for ages and such challenge shall persist until such time the employer and the potential contractors resolve to involve themselves at the early tender or contract stage. It is pertinent that document preparatory work for larger marine infrastructure projects often consumes an extraordinary amount of span of time, financial resources and human resource, that often results as ineffective document, further the involvement of the contractor in the bidding process post preparatory work confirms the incorrectness of the documents. The incorrect information and data are provided to the consultants, engineer to prepare the design and levels results along with the conditions of the contractual clauses results in tailoring the FIDIC documents to suit the incorrect information that was obtained during the preparatory work and such tender documents are always qualifies for dispute between the contactor and the engineer.

Due to the incorrect information, the standard procedure and the dimensions in accordance to the soil substrata are altered to suit to the requirement of the information that was collected with preset qualification of the dredging equipment that the consultants could have experienced, had sufficient correct information was made available, the tender document could have evolved with appropriate contractual clauses by increasing transparency thereof reducing the risk with increased shared responsibility and limit the cause and reasons of disputes and litigations. Since the information are scantly and limited, the employer fails to own the information provided in the tender documents resulting in contractors increased risk, that being loaded on the price and uneven sharing of responsibility leading to disputes and litigation.

In most of the dredging tenders, the contractors are viewed as rivals since these dredging contractors are responsible for the revenue outflow of the port, but the employer forgets to appreciate though the dredging contractors are responsible for revenue outflow of the port they are instrumental in generating higher revenue inflow for the port by attracting giant size vessels with deeper draft to the port.

To avoid increase in the estimated cost of the projects or from being shelved or putting on hold the development, the best solution is to involve the potential contractors at the early stage of project preparatory works. Such involvement shall provide efficient means of designing and planning infrastructure projects in a more realistic estimated cost of the project with less adversary complex issues. It is

• Degree and Timing of Contractor Responsibility

• Amount & Nature of Profit Incentive Encouraging Contractor to Achieve Goal

Cost-Plus-Fixed-Fee (CPFF) Cost-Plus-Award-Fee (CPAF)

Reward

Greatest Risk on Government

Cost-Plus-Incentive-Fee (CPIF) Cost-Sharing (CS)

Sharing Risk

Fixed-Price-Incentive (FPI) Firm-Fixed-Price (FFP)

Greatest Risk on Contractor

Profile in Contract Risk

pertinent that the involvement of the contractors shall also result in healthy competition with the employer getting the more realistic quote for the project that would avoid him to seek approval or ratification of the revised estimate cost but for the escalation factors. Though the employers and employer assisted consultants are experts in the field, such expertise could not be underdetermining the expertise of the dredging contractor whose only scope of work is dredging.

However, these early involvement of the contractor may be possible in private owned ports and the same model shall not work for the state owned ports that are governed by stringent rules and regulations.

The solution for the state owned ports is to include the value engineering clause in the tender and allow the contractor to submit the alternate proposal or the value added engineering in his bid. The evaluation and discussion with the respective contractors shall bring out the salient features of the value added engineering clause that shall be deemed to be the same as that of the early involvement of the contractor. In both the options mentioned above, the employer shall have the advantage of involving the contractor at the early stage of the bid submission, so that the contractor from his experience and expertise shall positively contribute to the project to be a win-win situation for both the employer and the contractor.

Author: Prof. Dr. GYV Victor Member, Board – EADA (Asia, Pacific region) Advisor – Dharti Dredging and Infrastructure Limited.

Emal id: gyv@india.com

Aug - Sept 2013 |

Dredging.indd 31

Risk

| 31

9/28/2013 2:48:34 PM

FEATURES

Freight Watch – July to August 2013 Charter rates of VLCC plying on route TD3 fell rose initially after China hired a record number of VLCCs, later however, as the cargoes declined excess capacity pulled charter rates down. Daily route TD3 (from Ras Tanura in Saudi Arabia, the world’s biggest oil-export site to Chiba in Japan) one of the world’s busiest oil route and industry benchmark, opened the month of July 2013 flat at 35 Worldscale (WS) points. Thereafter the freight rate on the route TD3 rose on reports that China the world’s second largest consumer of crude oil has booked at least 11 VLCCs from the Middle East Gulf. Large scale hiring by China, helped reducing the tonnage surplus.

1.3

60

1.25

45

1.2

30

1.15

15 World Scale Points - Route TD3

VLCC supply V’s demand (LHS)

3 8/

26

/2

01

3 8/

19

/2

01

3 01 /2 12 8/

8/

5/

20

13

3 01 7/

29

/2

01 7/

22

/2

01 7/

15

/2

13 7/

8/

20

13 20 1/ 7/

3

0

3

1.1

Worldscale Points

Supply V’s Demand*

Route TD3 freight rate and weekly supply Vs demand

Note: * Market in “oversupply“ mode when reading is excceds 1, vice-a-versa when below 1.

Source: Bloomberg

W

S points are a percentage of a nominal rate, or the flat rate, for over 3,20,000 specific routes.

Flat rates for every voyage, quoted in USD per tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates. Notably, each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates.

Confident with China’s demand vessel owners refused the cargoes being offered at lower bids which helped in sustaining the uptrend in freight rates. Freight market also looked up in early July as demolition activity in the crude oil tanker segment picked up during the period.

In June and July 2.2 million DWT was delivered for recycling, equalling to the demolished tonnage during January to May 2013, according to BIMCO, a shipping association. As a result the freight rates on route TD3

32 |

Freight Watch 32-33.indd 32

peaked at 47.5 WS points on July 8, 2013. Staring at rising freight rates, charterers seemingly stepped back. As the new business started drying up, vessels owners struggling to maintain the rates relented leading to weakness in charter rates.

Additionally, due to weak demand, the requirement for ferrying crude oil receded which reflected on surplus of VLCCs available to load 2 million barrels of oil over next 30 days. The surplus climbed to over 20 per cent on July 23, 2013 for the first time during the review period (JulyAugust 2013), according to Bloomberg survey. During the beginning of July the surplus was at 17 percent.

Additionally, the sharp slump in Indian rupee to record low severely impacted volumes in ship breaking business as Indian buyers were unable to quote competitively due to weak rupee, prolonging a capacity glut. Notably, Indian yards, which break up the largest number of tankers had to

| Aug - Sept 2013

9/28/2013 3:10:59 PM

FEATURES Shipping Capacity Statistics Particular

Aug-13

Jul-13

MoM %

Aug-12

Change

YoY % Change

No of Ships in service

2,306

2,310

-0.2%

2,262.00

1.9%

DWT Weight in '000 tonnes'

373,024

374,260

-0.3%

360,004

3.6%

No of new ship orders

132

149

-11.4%

137.00

-3.6%

No of ships under construction

37

38

-2.6%

76.00

-51.3%

Order book as DWT %

9.12

9.82

-7.1%

13.34

-31.6%

No of Ships broken

16

3

433.3%

10.00

60.0%

425

425

0.0%

407.00

4.4%

No. of VLCCs sailing with cargo

428

428

0.0%

413.00

3.6%

No. of VLCCs anchored

148

148

0.0%

142.00

4.2%

Avg. speed of VLCCs in knots (Excl. Anchored) 9.29

9.29

0.0%

9.42

-1.4%

Persian Gulf VLCCs Supply vs. Demand Oil - floating storage (1000 barrels)

1.25

1.21

3.3%

1.19

5.0%

103,812

103,812

0.0%

68,556

51.4%

29,957

29,957

0.0%

10,616

182.2%

Global

109,938

109,938

0.0%

86,902

26.5%

Middle East Gulf

33,980

33,980

0.0%

25,034

35.7%

India

1,936

1,936

0.0%

744

160.2%

Note: Supply – demand is 1, where both are equal; 1.1 signifies 10% oversupply whereas 0.9 means 10% deficit Source: Bloomberg

face the brunt of slump in volume as Indian rupee weakened around 20 per cent against the US dollar this year.

Also, the reported decline in OPEC production in some Middle Eastern and West African countries cut into VLCC demand bringing fixture counts down. Heavy refinery maintenance program in countries importing oil from Gulf region in the first half of 2013 further depressed demand for VLCCs. To capitalise on falling freight rates charterers applied tactics of slowly drip feeding the market with cargoes which further added to the supply glut pressurising the freight rates. As a result, by August 13, 2013 surplus increased to a record 25 per cent last seen in March this year. The lack of demand, combined with a backlog of tonnage, also caused rates to fall to the lowest levels of 30 WS points on August 13, 2013.

The weakness in freight was also due to lower imports by China. The dragon nation’s crude oil imports averaged 23.03 million tonnes a month in the first six months of 2013, down 1.3 per cent from a year earlier, according to Chinese Customs Department registering the first drop since at least 2005 in the country’s buying.

Additionally, the rise in US domestic production amidst shale oil boom has caused its imports to drop by a whopping 28 per cent compared with its peak imports in 2005 also leading to lower cargoes for VLCCs.

Dearth of cargoes and resultant oversupply then persisted through the month of August. Later, on August 30, VLCCs charter rate closed the month at 30 WS points registering a fall of 14.3 per cent in the two month period of JulyAugust 2013.

(Disclaimer: The views expressed by authors are their opinions.)

Authors: Niteen M Jain Senior Analyst, Department of Research & Strategy, Multi Commodity Exchange of India Ltd Email: niteen.jain@mcxindia.com Nazir Ahmed Moulvi Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd Email: nazir.moulvi@mcxindia.com

Aug - Sept 2013 |

Freight Watch 32-33.indd 33

| 33

9/28/2013 3:13:14 PM

NEWS FEATURE

World’s Biggest Ship Graveyard

Gadani Ship-breaking Yard, Pakistan

G

adani ship-breaking yard, Pakistan, is the third largest ship breaking yard after Alang, India and Chittagong, Bangladesh. In 1980s, it was the largest ship breaking yard in world, with more than 30,000 direct employees. The yard consists of 132 ship-breaking plots across a 10-km long beachfront at Gadani, Pakistan, about 50 km northwest of Karachi.

Ship-breaking operations history in Pakistan along with the Gadani coastline had started prior to the country’s independence in 1947. Post-Independence, a group of Pakistani entrepreneurs made serious efforts to develop this casual trade into a regular industry.

In 1978, the government of Pakistan announced a number of measures including the declaration of Gadani as a port, realising the potential of ship-breaking industry contributes to the country’s economy. The Pakistan government also took measures in reducing import duties on ships designated for breaking-up and formed a government special task force to address infrastructure and logistics issues in Gadani.

In an aim of strengthening the ship-breaking operations in the country, in 2001 the Pakistan government reduced shipbreaking duties 15 to 10 per cent and also declared further incentives if the industry activity improved. The reduction measure in taxes on scrap metal by the government led to a modest resurgence of output at Gadani, results now employing around 6,000 workers in there.

34 |

World's Biggest Ship Graveyard 34.indd 34

Gadani currently has an annual capacity of breaking up to 125 ships of all sizes, including supertankers, with a combined LDT of 1,000,000 tonnes. The facility is scavenged over 1 million tonnes of steel per year, and much of it is sold for the demand of metal in the construction sector in the country.

In the 2009-2010 fiscal year, a record 107 ships, with a combined light displacement tonnage (LDT) of 852,022 tonnes, were broken at Gadani whereas in the previous 2008-2009 fiscal year, 86 ships, with a combined LDT of 778,598 tonnes, were turned into scrap.

Gadani is the world’s leading ship breaking yard in terms of efficiency. At Gadani, a ship with 5,000 LDT is broken within 30 to 45 days, whereas in India and Bangladesh, it takes, on average, more than 6 months for breaking a vessel of the same size.

Scrapping ships at Gadani uses large amounts of cheap, local labour, where huge tankers and cruise liners are scrapped on the shorefront by teams of labourers using little more than hand tools. The job is considered one of the most dangerous in the world and workers at Gadani earning a pittance of just USD 4 a day, but there is not shortage of recruits. They come from a nearby squatter settlements and every morning swarm a 10k stretch of sandy beach at Gadani in Pakistan.

- Rakesh Roy

| Aug - Sept 2013

9/28/2013 3:24:42 PM

NEWS FEATURES

COSTA

Concordia Salvage: Engineering Marvel

C

onclusion of the parbuckling phase of the Costa Concordia wreck removal proved to be a huge success, as the stakeholders confirm their satisfaction with the outcome. Despite numerous challenges, accurate calculations and predictions of the designers enabled the salvage team to carry out the operation smoothly. The project, the most expensive and most sophisticated in the history of maritime wreck removal, represents a perfect example of successful collaboration between Italian public and private entities to meet the objective, resulting in a job well done. There are various aspects that make this project so peculiar, those being a very special maritime environment, type of the vessel and its size along with the need to preserve the hull of the wreck and its movement as a single peace, without compromising the operation, leaving the area near the coast intact. With regard to the financial dimension of the project, so far the bill equals to 600 milion euros and rising, with higher costs expected to accumulate in the coming months. Nevertheless, the final forecasts are not available since they depend on mitigation measures to ensue. According to Costa Crociere, owner of the wreck, the total bill is highly covered by the insurance, however, not in the full amount.

For Costa Crociere, the operation has a symbolic value since the wreck’s uprighting embodies the “uprighting” of the company, which is striving to remedy its tarnished reputation. Even though the full damage on the vessel has not been assessed, the major damage on the starboard is evident, but there are no tears in the structure of the wreck. The following stage of the project will entail installation of the remaining 15 refloating sponsons, to be attached to the starboard side of the wreck. These caissons will be used during the subsequent re-floating stage, which is planned for the first quarter of next year.

Having been refloated, the vessel will be towed to the designated Italian port. Once the ship is departed, the entire structure, used during the recovery operations, will be removed and the seagrass replanted, according to Titan Salvage and Micoperi. For the time being, the most important thing is to stabilise the wreck and prepare it for the coming winter. Despite being a major milestone, the project is still not completed and the very fact that the wreck is still there poses a risk for the island and its environment.

Until now 4000 water analyses have been carried out confirming that there has not been any organic or oil pollution caused by the wreck. The very weight of the ship can ensure the ship to remain stable and withstand harsh weather conditions, still the salvage team will be monitoring the situation and is ready to act in case of any emergencies.

Francesco Schettino, the man who captained the Costa Concordia on the night it crashed into rocks off the Tuscan island of Giglio, pointed the finger at his helmsman in court arguing the disaster would not have happened if the crew member had been quicker to carry out his orders. Thirty-two people died when, on the night of January 13, 2012, the 300-metre-long ship ran aground close to the shore and became impaled on pinnacles of rock.

Aug - Sept 2013 |

Costa 35.indd 35

| 35

9/28/2013 4:00:02 PM

MARINE ARCHAEOLOGY

Discovering Mid-Nineteenth

Century Schooner The wreckage of the schooner Atlas, which sank in 1839 during a gale, has been located in Lake Ontario. The Atlas may be the oldest confirmed commercial schooner discovered in the Great Lakes. A team of shipwreck enthusiasts, Jim Kennard, Roger Pawlowski and Roland Stevens, located the schooner while searching for sunken ships near Oswego, New York.

I

n early May 1839, the schooner Atlas was transporting a cargo of Black River limestone from Chaumont to the port of Oswego. Within a few miles of its final destination the Atlas encountered gale force winds from the northwest which more than likely caused a shift in the heavy cargo taking the schooner swiftly to the bottom of Lake Ontario. The schooner sank so quickly there was no time for anyone to escape and all on board were carried to the deep depths of the lake. Only a few articles from the schooner were found later by the steamer Telegraph that had been sent out to where the Atlas was seen going down.

These included a pair of oars, a coat, two hats, and a pair of boots.

Schooner built in 1838 The Atlas, a two masted schooner, was built in Dexter, NY in 1838 and owned by Ortha Little & Son for the specific purpose of transporting building stone from the quarries

36 |

Marine Archaeology 36-37.indd 36

Wreckage of the ship’s deck after hitting hard on the lake bottom

Ship’s wheel covered with quagga mussles

in the Chaumont, NY area. The cargo was owned by Asa Davis who at that time was furnishing the cut stone for the US government pier in Oswego. Stone from the Davis quarries was later used in the construction of the Gerrit Smith building (public library) and a number of other structures in Oswego.

Discovery and Survey of the Shipwreck The schooner Atlas was located in late June by a high resolution DeepVision side scan sonar system. The team returned to deploy a VideoRay remote operated vehicle (ROV) and obtain a video recording of the remains of the shipwreck. In a depth of upwards of 300 feet the visibility is limited to lighting provided by the ROV. The remains of the schooner can best be summed up as a mess. The ship sank like the stone it was carrying, hitting hard on the bottom of Lake Ontario and collapsing the deck.

The impact probably weakened the sides of the schooner

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MARINE ARCHAEOLOGY

Hatch looking into ship hold containing cut stone

The schooner Atlas was located in late June by a high resolution DeepVision side scan sonar system. The team returned to deploy a VideoRay remote operated vehicle (ROV) and obtain a video recording of the remains of the shipwreck. In a depth of upwards of 300 feet the visibility is limited to lighting provided by the ROV. The remains of the schooner can best be summed up as a mess.

Anchor hung over the starboard rail

causing them to fall away. One of the masts is resting to the starboard side of the wreck and the other back past the port stern of the ship.

Only the aft deck remains with the ship’s wheel heavily encrusted with mussels. Just forward of this deck is one of the holds of the ship, containing a large piece of cut stone.

From this area to the bow, boards jut out at different angles indicating how violent the impact must have been when it crashed into the bottom. At the bow one anchor is still hanging on the starboard side while the port anchor is resting on the bottom.

The video appears to show a reinforced stern area from which the stone was probably loaded. The best estimate of the ship size is approximately 52 feet in length with a beam of 16 ½ feet.

Oldest Confirmed Great Lakes Commercial Schooner A search of shipwreck databases and discussions with several maritime historians was made to determine if there was another previously discovered Great Lakes commercial schooner that may be older than the Atlas.

There has been some speculation of earlier vessels but none have been positively identified.

Historic Shipwrecks in New York State waters Historic shipwrecks abandoned and embedded in New York State underwater lands belong to the people of the State of New York and are protected by state and federal law from unauthorised disturbance. The shipwreck survey in Lake Ontario was funded by a grant from The National Museum of the Great Lakes/Great Lakes Historical Society of Vermillion, Ohio.

(Courtesy: www.shipwreckworld.com)

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INTERVIEW

‘Transferring Japanese Shipbuilding Culture is the Real Challenge’ Established in 1899, Nippon Kaiji Kyokai, known as ClassNK or NK, now one of the world’s largest ship classification society, has come a long way to represent approximately 20 per cent of the world’s classified merchant fleet. A V Pradhan, Regional General Manger – India, ClassNK, details about the opportunities, challenges & the future plans of ClassNK for India with an exclusive talk with SMP World. Excerpts…

What are the technical standards of ClassNK’s classification and certification for newly built ships and how does it different for the existing ships?

Even though ClassNK’s technical standards for new construction are guided by International Association of Classification Societies (IACS) principles such as Common structural Rules, Goal Based Standards etc, the society’s procedure to develop the rules is worth mentioning.

In an objective to first completely understand the relevant rules, the society digs into its huge data bank of information gathered from the surveys of existing ships. Supplement it by the new technical developments, addresses the requirements of IMO etc, carries out extensive research to validate any assumptions made in the data. Thereafter it develops procedures and guidance for implementation of the rules by the surveyors for survey and certifying ships. It has developed its own unique procedures of inspection & classification to ensure the safety of ship and marine environments. Rules thus developed after their complete understanding enable the society to maintain its commitment to scientific and technological research and development.

ClassNK’s technical experts are often appointed as Project Managers for new construction to ensure that the implementation of rules is carried out with complete understanding. The Classification Rules, which ClassNK has developed, are applied to new-building ships as well as for the existing ships to ensure their safety. Each of the ClassNK’s surveyors is subjected to (monitoring) audit at regular intervals to ensure continued implementation the Rule requirements.

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A V Pradhan Regional General Manger – India, ClassNK

Are the classification criteria different for Indian and international prospective, elaborate us on it?

No. Application of NK Classification criteria is same worldwide. For statutory matters for Indian Flag ships, we need to verify the Govt. of India MS Act requirements on the ships. The Govt. of India Rules are, principally, similar to various IMO Conventions except for a few specific additional requirements. We as a classification society have been given the authority to survey on behalf of Govt of India and issue certificate behalf of Govt of India.

Otherwise the minimum requirements are same.

Please apprise us the technical aspects of ClassNK in improving quality & safety in marine industry & protection of marine environment?

Safety & protection of marine environment is the primary objective of ClassNK, and it has been recognized as the policy statement of the organization. The policy statement, which is principally guided by IMO, is to strive for the improvement of safety of life on ships, the safety of the ship itself and the safety of passengers and cargo of the ship, simultaneously improving to protect the environment. Therefore all the activities of NK are focused towards the safety of entire marine industry protection of the environment.

Please brief us the steps taken by ClassNK in ensuring safety of life and ships at sea?

Again, the safety is an issue, which is defined and addressed by IMO by setting out certain minimum rules requirement. The rules originate to address all foreseeable

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INTERVIEW risks expected to be encountered in the operation of the ship with a primary concern for safety.

Thereafter the rules must be continuously developed every time a new hazard or accident is encountered and there is some lesson to be learnt from its occurrence. Or, because of researches and new technologies. Rules and Regulations in ClassNK are subject to continuous refinement based upon additional research or practical experience. The society has developed an international reputation of continuous research carried out for safeguarding life and property at sea, and preserving marine environment.

What are the steps taken by ClassNK in improving energy-efficiency of Ships?

ClassNK provides Energy Efficiency Design Index (EEDI) and Ship Energy Efficiency Management Plan (SEEMP) Appraisals in reducing CO 2 emissions to improve energyefficiency of ships; and many shipbuilders, ship owners and technology companies are looking at technology solutions in this regard. NK very strongly believes in improving in whatever it is doing. On one hand it believes in refining its procedures to the finest details as far as the existing technology is concerned so that the existing technology is not only kept viable but made more and more cost effective.

Simultaneously, the society stresses heavily on research for new ideas and concepts to achieve better efficiency of ships.

In Japan, it is seen that the Administration makes all the stakeholders in shipping to come together in form of an association. Thus most of the research programmes conducted by ClassNK are done jointly with Shipyards, Ship owners association. Mandatory allocation of fairly large percentage of the society’s revenue is assigned for ‘Research’. Such activities at Japanese National level seem to be very effective.

What are the various challenges and opportunities you visualize as a Classifications society in Indian Marine industry?

ClassNK’s India activity consists of surveying and inspection of all kinds of ships coming to the country, which are register by NK. Statistically since NK holds 20 per cent i.e. one fifth of the world’s classified merchant fleet, the one-fifth of all the ships calling Indian Ports are NK classed ships. So the survey of NK classed ships is a major activity of NK in India.

ClassNK is active in new construction in India, Sri Lanka and Bangladesh. The challenge in this field of new construction is to transfer the Japanese Shipbuilding culture and Shipbuilding experience to the Indian Subcontinent shipyards. It is our task to make use of the opportunity to enable this transfer. There are huge benefits such as very high quality, on time deliveries by eliminating

repetitive & inefficient costly practices and considerably improved bottom line i.e. profits. We have substantially succeeded in a Sri Lankan shipyard.

The challenges to certify ship in carrying out surveys are identical. On the Indian side, there are few ports which have the facility to load or unload cargos alongside. Most of the ports are anchorage ports; though, the situation is changing on the East Coast. The survey of the vessel at anchorage is very challenging, especially in the monsoon season. So the challenges are safely reaching the vessels and carrying out the inspection safely. However the ship is always handicapped to carry out any maintenance. In fact hardly any maintenance gets done on the Indian Coast.

The facilities available are very poor.

As India has a vast coastline with 13 major ports and about 40 smaller ports, ClassNK is trying to enhance its presence in India.

What are the clients of ClassNK in India?

A: Our major clients are Shipowners and Shipbuilders in the country, for example, Great Eastern, Varun Shipping, ABG Shipyards, etc., Steel Manufacturing Companies such as ESSAR Steel, some Steel forging companies, cryogenic steel casting manufacturers are Material Manufacturer category. Cuminns India, Alfa Laval etc are machinery manufacturer category. GEE, Advani Oerlikon are welding consumable customers, Noble Paints, Jotun Paints are paint manufacturers. Service providers such as Thickness measurement companies, Radio Inspection companies are also some of our customers.

Ship Management Companies and Maritime Training Institutes are also our customers. In short ClassNK offers a broad range of services that encompass every aspect of ship. And the most important customer is the Indian Administration who has given us the RO status to carry out surveys and issue certificates to Indian Flag ships on their behalf.

What are the ClassNK’s Future plans in India?

ClassNK is committed to develop its marine partners in India in associating with Govt. of India, Cochin University of Science and Technology, India Institute of Technology - Chennai, ABG Shipyard, etc, to introduce effective and innovative solutions for enhancing ship safety, protection of the marine environment. We are now embarking for the development of recommended practices in the ship recycling processes. ClassNK want to aggressively foray into the ship breaking and ship recycling industry, as India holds close to 45 per cent of world market of ship recycling. The world market is looking towards India for shipbuilding and ship recycling activities due to its perceived cost effectiveness.

ClassNK wants to add quality in this activity.

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SMP Marketing Initiative

Capt Badal Singh: A New Visionary to the World of Shipping

The legacy of BP Marine is carried forward by Badal Singh, the elder son of RC Singh, as the Director of BPMA. A dream that has expanded with time. RC Singh has kept the pioneering spirit burning as he embraces the new world of shipping industry with the values enshrined by his father. What began as a family business providing for regular good service to organizations has transformed into a global shipping industry. In BP Marine Academy, B Stands for Badal and now he is already a captain taking over command from his father.

A

t a time when youngsters are steered towards other so called stable and safe professions in their lives, were Badal want to remain in the shipping industry and sow the seeds of hard work here. The saga of BPMA and particularly RC Singh is a perfect role model for Badal with an indomitable spirit to fight all odds and handicaps and emerge a winner. Badal feels that his father is a living example of converting adversity into opportunity. Nothing can stop a visionary.

His father RC Singh converted his mistake, his adversity into a grand opportunity and started elementary first aids courses in one room with a vision to build a world class academy for training sea-fearers. Badal is already on the footsteps of his father. The academy not only boasts of excellent infrastructure but also excellent faculty of

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qualified and devoted Marine Engineers, Navigators, Academic and Instructional staff. No wonder the Academy has Quality System Certification ISO 9001:2008 from American Bureau of Shipping Industrial Verification Inc and has also been rated as a “Outstanding” institute by CRISIL Rating Mumbai. The quality of education imparted to the student is excellent. The students are given ample opportunities to showcase their talent and skills and extracurricular activities are encouraged as a result of which B P Marine Academy received “Best Marine Institute in India” award for the year 2012-2013 by Big Research.

B P Marine Academy also received Newsmaker Achiever Award for the year 2012 in the category of “Best Marine Ac a d e my ” aw a r d f r o m N e w s m a k e r s b r o a d c a s t i n g and communication.

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The “Global Education Excellence Awards 2013” By Prime Time. The Award Was Received By Director Capt. Badal Singh From Chandresh Kumari Katoch Indian Member Of Parliament In The Lok-sabha.

an objective of providing best training to the seafarers especially related to safety. R C Singh is very passionate about it and tries to imbibe in the students the motto of “Safety First” and tells the students to avoid the mistakes and errors he made during his active Shipping career.

As a part of corporate social responsibility, the management of the academy, since inception has contributed art amount of Rupees 15 crore towards the education and training at various levels to the needy Candidates.

The Academy is proud to be located in Mumbai, the financial capital of the country. The Academy has reserved 50 per cent of its seats for the students of Maharashtra to promote the shipping careers in this region of India.

R C Singh has received Sant Tulsidas Krit “Ram Charitra Manas Award” from All India Port Labour Association by the hands of P A S,angma in recognition to contributions made by Singh in providing financial assistance to the needy Candidates. The Academy was started in 1998 with the compensation money received by R C Singh with

B P Marine Academy is entering into a high growth zone by launching the Phase-II at Panvel Campus and R C Singh wishes to offer courses from KG to PG in the same campus.

There are many projects in the Pipeline such as Marine Engineering Institute. Second priority would be for the Academy to encompass the entire gamut of activities connected with shipping like providing the placement opportunity to its own trainee and for this; the Academy have acquired the RPSL (recruitment and placement service license). B P Marine Academy also plans to have its own fleet of ships in near future.

In short span of 15 years B P Marine Academy has trained more than 3,50,000 seafarers in various modular courses and more than 8500 cadets in various pre-sea courses which in itself is an achievement and shows R C Singh’s commitment towards the shipping industry and under his vision and able guidance the second generation of the family, Captain Badal Singh his elder son has taken on the mantle and onus to enhance the academy by looking into the total quality management of both the campuses.

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FEATURES

Overload Protection: A System Solution for Harbour Logistics High Demands Call for Intelligent Solutions Increasing tempo and growing transhipment volumes in present-day logistics processes call for the maximum safety and availability of handling equipment. This is especially the case for harbour logistics.

Besides the safety of personnel and operational reliability of the lifting equipment, the focus is also on reducing costs by minimising standstill periods and expenditure on servicing and repairs.

The ECPS system designed by the engineering team at tecsis fulfils this very broad spectrum of demands. Its innovative overload safety system has been designed specifically for use on hoisting tackle in harbour logistics systems.

By virtue of its high performance electronics, intelligent software and the comprehensive choice of stateof-the-art force transducers, the new ECPS can be quickly and economically adapted to individual customer requirements.

Efficient Interplay of All Components The hardware and software of the evaluation electronics is of fully modular construction, which makes it very easy to adapt to the required functions.

It is supplied with the relevant PC software so that it can be configured and put into service. Optionally, the internal DOT matrix display fitted as standard can also be extended by a keypad. This allows it to be put into service without the need for a PC. Through cyclical internal software checks and continuous monitoring of signal inputs and safety relays, a high degree of functional reliability is guaranteed.

Additional Options: • Profibus • CAN-bus • Fast limit switches (EGS88) E.g., for control of an electromechanical snag overload system (SOS) 42 |

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FEATURES The tecsis Measuring Principle - Thin-Film Technology (Also Possible in a Redundant Variant) Low on space requirements – outstanding in its possibilities: the thin-film sensor is placed directly in the force-transmitting path of the transducer – just like a strain gauge. The tensile, compressive and shear stresses that occur in proportion to the force involved are precisely and dependably measured in this way.

The strain-sensitive resistors are deposited onto the sensor body atomically in an automated PVD (Physical Vapour Deposition) process. Even when installation space is minimal, the measuring cell (body Ø 7 mm) can still be fitted at the ideal position in the force transducer. Nor does the redundant version require any additional space. And, because the signal is captured in a highly confined space, any effects of geometry are smaller as a consequence.

be fitted into existing structures as a direct replacement for the retaining bolts. By using a standardised solution framework, the force transducers can be adapted to many different kinds of constructional points and environmental conditions. Depending on the particular application, they fulfil many different kinds of safety requirements, right up to performance level e according to DIN EN ISO 13849-1.

Optionally, two different signal outputs are available via an integrated amplifier: analogue standard output signals or CANopen.

Advantages at a Glance • • • •

Safeguarding of cranes with constant capacity, adaptable to any specification Modularly built hardware and software Easy to put into service using the accompanying software Highest functional dependency ensured by apermanent checking routine

Applications Include Overload Protection Systems for

The advantages of thin-film technology: • Very good long-term stability • No creep behaviour • Integrated amplifier • High synchronisation in the redundant variant Force Transducers with Thin-Film Technology Up to Performance Level tecsis force transducers with thin-film sensors are perfectly suited for measuring force in guide pulleys and in fork and rolling bearings. Their constructional form allows them to

• • • • •

Harbour cranes Container cranes Straddle carriers Heavy-duty fork-lifts Reach stackers tecsis Instruments (India) Pvt. Ltd. (Subsidiary of tecsis GmbH) 209, 12-13-97, Tara Tycoon, Next to Big Bazar, Tarnaka Secunderabad 500 017 Ph: +91 40 2700 6201 Email: tecsisindia@tecsis.in; r.mogilisetti@tecsis.in Head Quarters: Carl – Legien – Str. 40 – 44, D-63073, Offenbach am Main Germany www.tecsis.in Aug - Sept 2013 |

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NEWS: INDIA

Maritime Industry Set to Meet at INMEX India 2013 Mumbai: Leading local and international maritime players are gearing up to meet at the 8 th edition of INMEX India, the region’s largest shipping exhibition and conference from 8–10 October at the Bombay Exhibition Centre, Mumbai.

Some of the international and local companies that will be showcasing their latest products and services include Abu Dhabi Ship Building, Holland Marine Equipment, Dutch Thruster Group, Simsekler General Ship Chandlers and Ship Repair Inc, Larsen & Turbo, Lion Rubber, ABB India, Elcome Marine, Vanson Engineering to name a few.

country pavilions including Holland, Norway, Finland, Singapore, China, Korea and Canada,” said Guru Prasath, Group Exhibitions Director, Informa Exhibitions.

International and domestic delegates during INMEX 2011.

“Despite volatile market conditions, the continued growth of INMEX India is testament to the genuine business opportunities gained from the show.

This year’s edition spans across 16,000 sqmt of exhibition space and will host more than 550 participating companies from 41 companies with 8

INMEX India is endorsed by Ministry of Shipping and supported UK Trade & Investment (UKTI), Royal Norwegian Embassy, Security Association for the Maritime Industry (SAMI), Danish Export Association, Indian National Ship Owners Association (INSA), Shipyards Association of India (SAI), Indian Private Ports & Terminals Association (IPPTA), Council of Supply Chain Management Professionals (CSCMP), MASSA and MANSA amongst several others.

Cabinet Okays Licensing Of Land For Ports Projects New Delhi: The Union Cabinet approved a proposal for licensing of land to concessionaires for four projects to be taken up in the public-private partnership (PPP) mode at various major ports.

The Cabinet also approved a project on lease basis based on tender-cum-auction for setting up a cement bagging plant at Cochin Port. These projects have been taken up

in terms of the extant policy of Government of India to pursue Maritime Development Projects under the PPP mode, an official press release said.

This decision will help in augmenting the capacity of ports expeditiously through PPP and will also bring about efficiency in operations at major ports which will benefit the trade and the economy as a whole, it added.

Major Port to be Set Up at Nellore Visakhapatnam: A major port is being established at Dugirajapatnam in Nellore district with Visakhapatnam port as the lead partner, according to G V L Satya Kumar, Chairman, Visakhapatnam port. He said the Cabinet Committee on Economic Affairs has identified Dugirajapatnam as the suitable site to set up port.

and other preliminaries, a SPV may be floated. Roughly, the port may require investment of ` 9,500 crore and in the initial stage, ` 4,500 crore may have to be invested. Four or five berths may be established in the port. The Visakhapatnam port may take a 89 per cent equity stake and the rest by the State Government. But these details will have to be worked out,” he said.

The feasibility study is being conducted by RITES. “It is still in the preliminary stage and after the completion of the feasibility study

Satya Kumar also said the Visakhapatnam port will set up a satellite port at Bheemunipatnam in Visakhapatnam district for which the

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feasibility study is being conducted.

A fishing harbour will also be set up at Bheemunipatnam and the feasibility report may be received in about three months. He said the Visakhapatnam port has taken up several projects in the public-private partnership mode to enhance the capacity to 110 million tonnes by 2015 from the present 70 million tonnes. He said the importance of the East Coast is growing and several major ports and non-major ports are coming up with the Look East policy of the Government.

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NEWS: INDIA

Andhra Gets 46 per cent Share in PPP Port Projects Hyderabad: The State of Andhra Pradesh (AP), on India’s southeast coast, commanded 46 per cent new port projects implemented by the central Government across Indian maritime states. The port sector in AP is to set up 6 berths in the port in Prakasam district involving an investment of INR 800 billion (USD 12.1 billion).

While the AP Government will hold 11 per cent of the project,

the rest will be held by the stateowned enterprises such as the National Mineral Development Corporation (NMDC) and steel firms, which are the major users of the port services.

Once commissioned, the state will have 2 major ports, the other being the country’s premier Visakhapatnam port, and 14 smaller ports.

Kerala Govt Allocates ` 3cr for Coastal Shipping Fund Kochi: The State Government has finally allocated ` 3 crore to the proposed Coastal Shipping promotion fund (CSPF), which was hanging in the balance for want of approval from the finance department. Port Minister K Babu announced the decision recently. The allocation of fund, announced a couple of months ago, was delayed as the finance department was yet to grant its approval.

However, sources in the Government conceded that the operationalization of CSPF would depend on the constitution of the Kerala Maritime Board, which will be the implementing agency of the fund. The proposal to constitute the board is awaiting clearance from the Union Home Ministry.

The fund when fully grown is to have a corpus of ` 300 crore and is meant to support a whole range of activities to facilitate movement of cargo through coastal waters. The proposed activities include development of infrastructure at minor ports and lending of soft loans for building low draft vessels which could be used in Coastal Shipping. The Government’s much trumpeted plan is to shift 20 per cent of the cargo from road to water by 2020; this is expected to yield several benefits, including decongestion of roads, reducing oil consumption and pollution. Kerala Ports department’s proposal is to pool funds from various sources to develop the CSPF.

Rupee Fall Affects Port Development : Vasan Thoothukudi: The sliding rupee will strongly impact port development works and the Indian shipping industry as it will, any other industry in the country, said Union Shipping Minister G K Vasan, who added that the present economic crisis in India has affected employment opportunities of even cadets trained at the Shipping Corporation of India run Maritime Training Institute (MTI).

After inaugurating South India’s first branch of the Maritime Training Institute of the SCI, Mumbai, in Thoothukudi, he said the free fall of the rupee has escalated the cost of port development activities in all 12 major ports. However, he was not clear about the exact percentage of project cost overrun. He hoped that the Indian economy would recuperate within the next one-and-a-half years, and the first batch of 40 students who have taken admission for the one-year diploma course at the Thoothukudi branch of MTI need not fear for their employment opportunities, added Vasan. He said the V.O.Chidambaranar port trust was a partner of SCI in the institute, having given ` 3 crore for the creation of its infrastructure out of a total estimation of ` 15 crore. Vasan laid the foundation stone for the new building for MTI on the port premises in the presence of Dr Vishwapati Trivedi, Secretary, Union Ministry of Shipping, B K Mandal, CMD of the SCI.

Port Projects to Add 220 mn Tonnes Capacity

Milind Deora, Minister of State for Shipping

New Delhi: Government said the 43 port modernisation and expansion projects under implementation at an estimated cost of ` 12,000 crore are expected to add about 220 million tonnes capacity. Minister of State for Shipping Milind Deora said that the capacity of all major ports, as on March 31, 2013, was 744.91 million tonne per annum (MTPA). “There are 43 modernisation and expansion projects

awarded and under implementation at an estimated cost of about ` 12,000 crore, which are expected to add about 220 million tonnes capacity on their completion,” he said.

The Minister noted that traffic at major ports declined last year due to ban on iron-ore mining and global slowdown.

He said this year onwards all major ports are required to prepare RFD document (results framework document) giving a summary of key results they want to achieve during the financial year on various performance indicators. The document provides objectives and the basis to evaluate port performance at the end of the year.

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NEWS: FOREIGN

Navigating New ISO Standards London: Dryad Maritime Intelligence, the UK’s leading maritime intelligence provider, issued clear guidance on the latest framework of standards to be issued by the maritime security industry. Their advisory considers and comments upon the three main proposed standards that are currently hot topics of debate in the maritime security industry; the International Organisation for Standardisation (ISO) PAS 28007, the International Code of Conduct for Private Security Service Providers (ICoC) and ANSI / ASIS PSC 1 & 4. Karen Jacques, Dryad Maritime’s Chief Operating Officer said, “The sheer speed at which this framework is being set up has inevitably led to a degree of

confusion about what this means for the shipping industry and how much the standards are likely to overlap. At Dryad, our role is to provide specialist advice and services to assist seafarers in going about their day to day business – we hope that this article gives some clarity on the topic.”

The revised standards are expected to be implemented in order to provide a framework of accreditation to be used by ship owners, managers and operators.

One of the key benefits of the introduction of these standards is that it will allow seafarers to select accredited and approved privately contracted armed security personnel (PCASP).

Chinese Shipyard Hands Over 78m MFSV Beijing: Zhenjiang Shipyard successfully delivered the first vessel from the 78m ocean safety standby vessel series to Falcon Energy Group of Singapore. The 78-metre Multi-Functional Support Vessel (MFSV) was built in compliance with the highest industry standards, and is American Bureau of Shipping (ABS) classed as A1 Offshore Support Vessel with Dynamic Positioning Class 2 (DP2), Fire Fighting Vessel Class 1 and certified with Safety Standby Service GR B(300) for 300 survivors. Integrated with safety standby, rescue and accommodation and driven by ASD propulsion system, the vessel represents the development momentum of ocean engineering vessels.

Rickmers, Apollo JV to Invest in Container Ships Hamburg: Rickmers Group and funds affiliated with Apollo Global Management, LLC have entered into a joint venture to invest in container ships, initially focused on secondary market vessels.

The joint venture has the capacity to invest up to USD 500 million, and investments are expected to be made over a period of several years. The joint venture may also be expanded over time to include new build tonnage and other shiprelated investments if the parties identify attractive projects in those areas and mutually agree to pursue them. Rickmers will provide a range of services for the jointly acquired fleet of ships including technical and commercial ship management.

“This joint venture is a further milestone along the path we have embarked on to develop a number of new options for investing in and growing our businesses. Rickmers is excited about the prospects that this collaboration with a firm with the resources and capabilities that Apollo brings to this venture,” explains Ronald D Widdows, CEO of Rickmers Group.

Keppel Secures Two FPSO Conversion Contracts Singapore: Keppel Shipyard Ltd (Keppel Shipyard) has secured two Floating Production Storage and Offloading (FPSO) conversion contracts from repeat customers worth a combined value of approximately USD 150.8 million. These contract s are from SBM Offshore N V (SBM Offshore) and M3nerg y Offshore Limite d (M3nergy Offshore).

Michael Chia, Managing Director (Marine & Technology), Keppel Offshore & Marine (Keppel O&M), said, “The award of these contracts from our repeat customers affirms their confidence in us. These contracts from experienced FPSO fleet owners and operators SBM Offshore and M3nergy bear testament to our commitment to quality conversion and upgrading services. “Over the years, Keppel Shipyard has worked closely with customers worldwide to bring to 46 |

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the market a range of offshore production solutions. We will continue to ensure the success of our latest FPSO projects to value-add to the global offshore production market.” Keppel Shipyard’s new conversion project for SBM Offshore is for the FPSO that will host the Stones ultra deepwater development by Shell in the Gulf of Mexico.

Once installed, the vessel will be the deepest production facility in the world, as well as the deepest FPSO with a disconnectable buoy (Buoyant Turret Mooring or BTM).

The yard’s work scope for the Stones project includes refurbishment and life extension works; upgrading of living quarters; fabrication and installation of the internal disconnectable buoy BTM system and topside module supports; as well as the installation and integration of topside modules.

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NEWS: FOREIGN

Malaysia Launches World’s Third Biggest TSHD Kualalumpur: Malaysia launched its largest and the world’s third biggest trailing suction hopper dredger, named ‘Inai Kenanga’, recently. The dredger was launched

by Datin Seri Rosmah Mansor, the Prime Minister Datuk Seri Najib Abdul Razak’s wife, in Pantai Acheh, Pulau Indah, according to Bernama.

“It is absolutely unthinkable that a local company can produce a vessel that is recognised as the largest in Asia and the third biggest in the world. Today, what we never thought possible can become reality in the form of such a large vessel, a vessel that can be our pride,” the Prime

Minister Najib stated at the ceremony. This remarkable dredger, which can achieve a speed of 17 knots and has a dredging depth of up to 45 m, was constructed at the dock of Selat Melaka Shipbuilding Corporation Sdn Bhd (SMSCSB), informs the same source.

The TSHD ‘Inai Kenanga’ is designed for a capacity of 32,000 m3. The dredger is fitted with a double diesel engine that drives the propellers, the generator and the suction pump system. Two MAN 12V48/60B engines with a power rating of 13.250 kW each are used as the main engines.

Shipowners Call for Sustainable Regulation London: The global trade association for the shipping industry, the International Chamber of Shipping (ICS), has called for all future proposals for environmental regulation that impact on ships to be subjected to a full and proper cost benefit analysis before adoption by the International Maritime Organisation (IMO). ICS is using the occasion of IMO World Maritime Day to explain its views on sustainable shipping, and has produced a special brochure for maritime policy makers.

ICS has set out how the shipping industry supports the goals for sustainable development agreed by world leaders at last year’s United

Nations Summit on Sustainable Development.

ICS Secretary General, Peter Hinchliffe explained, “International shipping directly facilitates the growth of world trade, economic development, and the improvement of global living standards – including amongst the billion or more people that do not yet have access to electricity.”

ICS argues that when it comes to environmental sustainability, shipping is the only major industry to already have a binding global deal in place – agreed by IMO – to reduce its CO2 emissions. When it comes to social sustainability and decent working conditions for seafarers,

shipping is the only industry to have a mandatory global framework in place which is as comprehensive as the new ILO Maritime Labour Convention. But the economic sustainability of shipping is vital too. ICS suggests that maritime policy makers should give equal priority to each of the three pillars of sustainable development including the economic, as well as the environmental and social.

“Unless the industry is commercially viable, it will not be able to deliver the investments in environmental and social improvements that are sought by regulators on behalf of society at large,” Hinchliffe said.

Singapore’s New Incentives for Salvage Companies Singapore: BIMCO members in the salvage and wreck removal business will be pleased to note Singapore’s latest incentive scheme aimed assisting operators to contain costs whilst bolstering the island nation’s International Maritime Centre status. MPA’s Cheong Keng Soon (Director Port Division) highlighted new incentives for salvage companies with equipment in the region when he addressed participants at the opening of the Salvage and Wreck Asia Conference recently.

Cheong explained, “In April this year, as part of the port dues review to simplify the port dues structure and streamline the various incentive schemes, MPA introduced a Salvage Vessel 12-Month Port Dues Scheme for salvage vessels to enjoy reduced port dues during their stay in Singapore.

Under this scheme, the owner, agent or master of a salvage vessel approved by MPA that carry requisite salvage equipment and who commits to respond to MPA’s mobilisation calls when the vessel is available, may opt to pay port dues for a 12-month period or part thereof with no restriction on its maximum stay and mooring locations.”

Cheong also pointed out that being located in the heart of South East Asia, salvage companies located in Singapore are in a good position to respond to emergencies throughout the region. For example in the MV Rena case, a crane barge was sent from Singapore to Tauranga, New Zealand, to aid in the salvaging efforts for the container ship. Today, there are a total of 9 salvage companies based Singapore.

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9/28/2013 5:36:03 PM

MARINE TECH

Korean Register Patents World’s First ‘Smart Fleet’ App

T

he Korean Register – an IACS member classification society – has obtained a patent on its ‘Smart Fleet’ app which was launched earlier this year.

This unique and world leading app delivers up-to-the-minute information on vessels, fleets, surveys, audits, port state control and more direct to a smart phone or tablet. Surveyors and others working in the field are now able to access this vital survey and technical information rapidly and without fuss while on the move.

The ‘Smart Fleet’ app is a great tool that is already making efficiency improvements to shipping companies - Jung Dong-jae, General Manager, Korean Register

Jung Dong-jae, General Manager of KR’s information technology team and in charge of developing this application, said: “The ‘Smart Fleet’ app is a great tool that is already making efficiency improvements to shipping companies. Today, busy people expect instant access to quality, reliable and bang up-to-date information and that is exactly what ‘Smart Fleet’ delivers. We have already seen a rapid take-up of this app and we expect many more users to come online soon. Obtaining the patent demonstrates that we have developed another piece of unique technology for our global customer base.”

Norwegian Introduces Interactive Digital Signage Fleetwide The interactive signage has been such a big hit on Norwegian Breakaway that we decided to expand it to our fleet so that all of our guests can take advantage of this exciting technology,” said Kevin Sheehan, CEO, Norwegian Cruise Line.

N

orwegian Cruise Line will expand the innovative digital signage first introduced on Norwegian Breakaway to the line’s entire fleet

by Summer 2015. The interactive touch screen signs will allow guests to order specialty items, get directions and reserve dining, shore excursions and entertainment simply with a scan of their stateroom key. The screens will also be a feature on the line’s newest ship, Norwegian Getaway, arriving to her homeport of Miami in February 2014. Each Norwegian ship will have between 30 and 50 touch and static screens located in prominent areas around the vessel. The screens will give guests the opportunity to make reservations for restaurants, entertainment and shore excursions as well serving as a personal concierge. Guests will be able to order beverages, flowers, dining packages and more, including goodies and custom cakes from Carlo’s Bake Shop on Norwegian Breakaway to celebrate special occasions. The signs even provide guests with directions and maps to other locations on board, making it easy for them to navigate the ship.

“The interactive signage has been such a big hit on Norwegian Breakaway that we decided to expand it to our fleet so that all of our guests can take advantage of this exciting technology,” said Kevin Sheehan, CEO, Norwegian Cruise Line.

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| Aug - Sept 2013

9/28/2013 5:59:13 PM

MARINE TECH

Astrium Services Opens Global Logistics Center

The new logistics center gives Astrium Services the ability to meet increasingly time and location sensitive delivery requirements from its European partners and customers.

A

strium Services, the global innovative provider of satellite enabled telecom solutions, has opened a new logistics center in Rotterdam, The Netherlands. Alongside existing logistics facilities in Houston and Singapore and specialized regional warehouses, like the maritime VSAT warehouse in Stavanger, the new center will play an important part in streamlining the global distribution of VSAT and MSS equipment, to ensure faster delivery times for customers anywhere in the world.

The new facility in Rotterdam supports Astrium Services logistics organisation in meeting current industry requirements whilst preparing for the continuing strong expansion of the maritime and offshore VSAT business. It will hold responsibility for delivery of all hardware components for Astrium Services’ satcoms portfolio, including antennas, modems and spare parts, in addition to bundled solutions containing VSAT and MSS systems.

The new logistics center gives Astrium Services the ability to meet increasingly time and location sensitive delivery requirements from its European partners and customers.

Imtech Marine Extends VSAT Coverage Network to Indian Ocean

I

mtech Marine has upgraded and extended the coverage of its Global VSAT Network. In addition to its wide network, Imtech Marine can now offer VSAT coverage in the Indian Ocean, roughly between Tanzania, Ethiopia, Madagascar, India and Indonesia, which is an important and busy area for the international maritime industry.

Imtech Marine offers a reliable, cost effective and always-on broadband communication solution that utilizes the iDirect Evolution platform. This global solution covers all major shipping routes and provides guaranteed quality of service of 99,5%, Service Level Agreements, 24/7 support and worldwide VSAT coverage, including automatic beam switching.

The VSAT network of Imtech Marine provides reliable communication connections for crew, captain and other users on board. - Rob Verkuil, Imtech Marine General Manager of Connectivity

Rob Verkuil, Imtech Marine General Manager of Connectivity said that by extending our Global VSAT coverage map we can offer our customers economical and effective broadband connectivity in an area where a lot of vessels are sailing. The VSAT network of Imtech Marine provides reliable communication connections for crew, captain and other users on board. The extension of our VSAT coverage in combination with the recently introduced Imtech Marine portfolio of unique value added services offers our customers the possibility for a total connectivity solution.

Aug - Sept 2013 |

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ď ›BOOK REVIEWď ?

Bridge Resource Management: Introduction and Training for Merchant Marine Crews [Paperback] Author Pages Price

: Capt Craig V Randall : 56 : USD 26.90 Book Description: This course is designed to be a comprehensive introduction and review of current Bridge Resource Management (BRM) techniques for ships officers and crew. It presents the latest BRM operating practices and teamwork management skills using the principles of Behavioral Markers and Non-Technical skills evaluation to ensure the safety of the ship, its personnel, cargo, the protection of the environment, and to satisfy the requirements of the STCW.

Safety and Security at Sea [Paperback] Author Pages Price

: D S Bist : 262 : USD 57.90

Book Description: Safety and Security at Sea is concerned with the safe operation of ships and consequently with preventing errors and oversights. This book contributes to safety where it is most effective - right at the site of work, on board the ship itself. It is here, indisputably, that it will prevent accidents and save lives. It translates theory into practice besides covering several new and current topics. This book is aimed at every deck officer - at every rank and on all ships.

Maritime Transportation: Safety Management and Risk Analysis [Hardcover] Author Pages Price

: Svein Kristiansen : 252 : USD 93.86 Book Description: Shipping and marine transportation is a highly regulated global industry. With heightened public awareness of the environmental and human cost of marine accidents, and tighter legislation from governments and international bodies on ships and shipping operations, the safe and efficient operation of ships is a priority for all ship builders, owners and operators. This book is the essential guide to the safety of maritime transportation for anyone in the field. The book covers all aspects of maritime risk and safety from engineering and operational perspectives, as well as regulatory and health and safety requirements. It addresses the needs of both professionals and students working in the related fields of shipping management, ship design and naval architecture and transport management, as well as fields including safety management, insurance and accident investigation.

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9/27/2013 7:17:06 PM

RNI No.: MAHENG/2008/29159 Date of Publication: 1st of every alternate month.

ONLY Back Cover.indd 1

9/28/2013 2:57:19 PM