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PORTS INFRASTRUCTURE & DREDGING • • • • • •
SMP World Expo 2014 Special Report PPP Model in Ports CSR in Dredging Projects Naval Ship Code Electrically Powered RTGs BS 6349-3:2013: Cost-Effective Shipyard Design
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[CONTENT]
Contents
07
23
33
Interview 7 ‘ClassNK is keen to support Indian maritime industry’ - Noboru Ueda, Chairman & President, ClassNK Features 10 Towards Safe Sailing through Rough Weathers - Supriya Abhijeet Oundhakar 13 ‘Dynamic role of govt must for ports development’ - Supriya Abhijeet Oundhakar 17 PPP Model in Ports: Long Way to Go - S S Kulkarni 20 Need of the Hour: Relaxation in Cabotage Law - Vishwas Udgirkar 23 CSR in Dredging Projects - Prof Dr GYV Victor 27 Implications of NATO Naval Ship Code - R M Simpson 30 BS 6349-3:2013: Cost-Effective Shipyard Design - Adrian Arnold 34 Electrically Powered RTGs Catching on Worldwide - Claus Burger
Freight Watch 37 Freight Watch – January to February 2014 – Niteen M Jain & Nazir Ahmed Moulvi Marine Archeology 41 Discovering 152-year-old Shipwreck News 42 Indian News 46 Foreign News 48 Marine Tech 50 Book Review Cover Image Courtesy: Lloyd’s Register
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| February - March 2014 3/27/2014 6:43:37 PM
[INTERVIEW]
‘ClassNK is keen to support Indian maritime industry’ CHEMTECH Foundation bestowed SMP World Expo 2014 ‘Lifetime Achievement’ Award upon Noboru Ueda, ClassNK Chairman for his contribution to the global maritime industry. During his inaugural speech of SMP World Expo 2014 themed on Maritime Industry – Bridge to Economic Sustainability, he appreciated ChemTech Foundation’s efforts for organising such a grand event & explored this opportunity to further strengthen cooperation between the two countries for more business alliances. He talks to SMP World during the event. Excerpts: Japan government’s initiatives and technical innovations & research have evolved Japanese maritime industry by taking it to upward trajectory movement. Its prowess in shipbuilding and expertise in technology have carved a niche for the country in the global shipping industry. India needs JSMEA (Japan Ship Machinery & Equipment Association) kind of association, which binds together machinery and equipment manufacturers on one platform. Being dynamic country with well established shipping and ship building industry, India has highly educated and dedicated workforce. Japanese shipbuilders are keen to expand collaboration overseas. Investment of Japanese technology expertise can further give competitive edge to the Indian shipping industry. Mitsubishi Heavy Industries’ has joint venture with India’s L&T for providing technology license & global support for building large commercial vessels and it will continue in future also. ClassNK has respectable partners in India including Indian Register of Shipping (IRS), Indian classification society. It has formed closed bonding with IRS. These two societies represent an apt example of meaningful contribution between two countries.
Whether vessel numbers decline or not, ClassNK will continue to provide surveys and technical services as well as work in partnership with the industry for the benefit of the entire maritime industry. While overcapacity and decline in freight rates may present challenges to owners in the short term, I believe that with continuing innovation the long-term outlook for the industry is bright.
How does it feel beginning career with ClassNK & becoming the Chairman and President? ClassNK was established in Japan in 1899, and is Asia’s first classification society. ClassNK has made many contributions to the global maritime industry over its some 110 year history, and is one of the founding members of the International Association of Classification Societies.
Noboru Ueda, Chairman and President, ClassNK (Nippon Kaiji Kyokai, Japan) addressing the audience during recently concluded SMP World Expo 2014.
I began my career joining ClassNK’s Hull Department in 1969, and I have worked in almost every aspect of classification over my 45 years in the maritime industry. Since my election to Chairman and President in 2008, ClassNK increased the number of exclusive survey offices in its service network by 33 per cent to 129 offices across the world to date. In addition, our register grew by over February - March 2014 |
Ueda interview-supriya.indd 7
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[INTERVIEW]
ClassNK Chairman Noboru Ueda receiving CHEMTECH Foundation’s SMP World Expo 2014 Global Lifetime Achievement Award from Capt J C Anand, Chairman Emeritus, Indian Register of Shipping & Chairman SMP World Expo 2014, Jasu Shah, Chairman, CHEMTECH Foundation and others. .
65 million gross tons, and in 2012 we became the first classification society in history to have over 200 million gross tons under class. I believe that this growth represents the trust that we have gained from clients through our services. I am very proud to serve as Chairman and President of ClassNK. How did you steer the growth of ClassNK as Chairman and President in becoming the world’s first classification society to have more than 200 million gross tons on its register? The needs of the maritime industry have become increasingly diversified over recent years. Responding to these needs and providing our customers with the highest quality services in a timely manner have been essential to ClassNK’s growth. We established our first mid-term business plan “Global Approach 200” in 2011, where we set out a number of goals to increase ship registrations based on three main strategies: building a solid operational structure that facilitates a swift response to changes in the market environment, maintaining ClassNK’s position of dominance and market share in ship classification, and a more proactive approach to business development. The plan was very successful. By accomplishing these objectives through the collective efforts of everyone at ClassNK, we were able to increase the trust of our clients, which we believe has led to the greater increase in terms of gross tonnage in our classed fleet we are seeing today. 8 | Ueda interview-supriya.indd 8
We strive to satisfy the needs of our clients across the world through activities such as the provision of high quality survey services, the expansion of our survey network, and the support we give to our clients for new international conventions. Through this we have earned the trust of the industry, which has witnessed ClassNK’s progress as the first classification society in history to have over 200 million gross tons on register. What are the measures taken by ClassNK in energy efficiency of ships? With various new international conventions being brought in to help in protecting the environment, ship owners are facing the challenge of meeting the requirements of these conventions. That is why ClassNK develops rules, guidance, and procedures, and conducts a wide variety of research and development projects in order to help ship owners comply with these new regulations and ensure the safety of its classed fleet. ClassNK is constantly working in partnership with leaders of the industry to develop environmentally sound solutions for the benefit of the entire maritime community. ClassNK also established a research scheme to respond to the needs of the entire industry, providing both technical and financial support to various joint research projects being carried out to search for solutions to environmental issues, including projects to improve the energy efficiency of ships. ClassNK joined a Japanese national project to reduce greenhouse gas emissions over four years,
| February - March 2014 3/27/2014 4:27:46 PM
[INTERVIEW]
India’s abundance of skilled maritime professionals and high level of professionalism will ensure that it remains a vital part of the global maritime industry. ClassNK is dedicated to supporting the local maritime community and providing the highest quality services, and will continue to maintain a strong presence in India.
supporting 22 different research projects, and contributed in producing many valuable results such as the air lubrication technology, which reduces fuel consumption and emissions through reduced frictional resistance. ClassNK has also been involved in another national project; Next Generation Maritime Environmental Technology Development Program, since 2013, and has been giving both technical and financial support towards the program. ClassNK will be able to use the results gained from the R&D carried out as part of this scheme to help provide owners with a range of innovative technical solutions. The global shipping sector is showing recessionary trends due to overcapacity of vessels & decline in freight rates? How is it going to affect the margins of ClassNK? In such scenario how do you envisage the growth of the sector?
of ClassNK’s Indian clients as well as discuss the latest topics affecting the industry. In addition, we established the Indian Technical Committee in 2011, which is also held each year to provide owners in the region with an opportunity to discuss the latest technical topics. We plan to continue holding these committee meetings as well as various technical seminars to provide the opportunity for exchange with members of the Indian maritime industry as well as share the latest technical information. India’s abundance of skilled maritime professionals and high level of professionalism will ensure that it remains a vital part of the global maritime industry. ClassNK is dedicated to supporting the local maritime community and providing the highest quality services, and will continue to maintain a strong presence in India.
ClassNK is an independent third-party non-profit organization, and as such we do not have margins. Our mission is to ensure the safety of life and property at sea and protect the marine environment. Whether vessel numbers decline or not, ClassNK will continue to provide surveys and technical services as well as work in partnership with the industry for the benefit of the entire maritime industry. While overcapacity and decline in freight rates may present challenges to owners in the short term, I believe that with continuing innovation the longterm outlook for the industry is bright. Can you please apprise us about the growth prospects for ClassNK in Indian Markets? What are your future plans for the same? In the past couple of decades, India has become a major player in the maritime industry, and ClassNK’s operations in India have expanded to meet the growing needs of the Indian maritime industry. ClassNK began actively serving the Indian maritime industry after signing a cooperation agreement with the Indian Register of Shipping in 1984. Since the establishment of our Mumbai Office in 1985 we have expanded our Indian service network over the years, and now operate six exclusive survey offices throughout the country. During this time we established the Indian Committee in 1994, which is held each year to reflect the opinions February - March 2014 | Ueda interview-supriya.indd 9
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[Feature]
Towards Safe Sailing through Rough Weathers
(L to R) Mr Noboru Ueda, Chairman and President, ClassNK (Nippon Kaiji Kyokai, Japan), Mr Gautam Chatterjee, IAS, Director General of Shipping, Capt J C Anand, Chairman Emeritus, Indian Register of Shipping & Chairman SMP World Expo 2014, H E Eivind S Homme, Ambassador, Norway to India, Mr M P Pinto, IAS (Retd.), Former DG of Shipping & Secretary to Ministry of Shipping, Mr Navpreet Singh, Joint Managing Director, Dolphin Offshore Enterprises (India) Ltd.
• Mr Gautam Chatterjee, IAS, DG of Shipping, Mr Noboru Ueda, Chairman & President, ClassNK, H E Eivind S Homme, Ambassador Norway to India, Mr M P Pinto (IAS Retd.), Former Director General of Shipping & Secretary to Ministry of Shipping inaugurate SMP World Expo 2014 • Cadets of IMU give guard of honour to dignitaries • The apt platform to voice concerns of the industry, says Capt J C Anand, Chairman Emeritus, Indian Register of Shipping • Mr N N Kumar, (IRS), Chairman, JNPT inaugurates Conference on Ports
10 | World Expo Report supriya.indd 10
F
rontier in successfully executing industrial events & exhibitions, CHEMTECH Foundation has further bonded maritime professionals and leaders together on one platform by organising 4 th edition of SMP World Expo 2014 that was supported by Union Ministry of Shipping at Bombay Exhibition Centre, Mumbai from 10 th February to 12 th February. The Conference themed on Maritime Industry – Bridge to Economic Sustainability was inaugurated by maritime connoisseurs Mr Gautam Chatterjee, IAS, and Director General of Shipping, Mr M P Pinto, IAS (Retd), Former DG of Shipping and Secretary to Ministry of Shipping, Mr Noboru Ueda, Chairman and President, ClassNK (Nippon Kaiji Kyokai, Japan), H E Eivind S Homme, Ambassador Norway to India. The cadets of Indian Maritime University stole the limelight by giving the guard of honour to the dignitaries at the time of the inaugural session. Japan
| February - March 2014 3/27/2014 4:31:53 PM
[Feature] Ship and Machinery Equipment Association ( JSMEA) also extended its support to this edition of the event. Mr N N Kumar (IRS) Chairman Jawaharlal Nehru Port Trust ( JNPT) graced the inaugural session of Conference on Ports.
its further movement. He felt that the sector needs to overcome the constraints. Instead of taking benefits of subsidy, he leveraged that the industry should be vocal about weaknesses with policymakers for getting rid of the hurdles for its progress.
Shipping is an important driving factor for economic growth of any country. As compared to world maritime industry, Indian shipping sector has been showing downward trajectory since 1990s in terms of shrinking shipping tonnage, descending India’s maritime status among 25 nations and dwindling total tonnage carriage. It is currently going through one of its toughest phases due to oversupply of vessels and higher freight rates.
H E Homme shared Norwegian Government’s efforts for gaining Norway superiority in the world maritime sector. He also informed about a number of Indian seafarers working in Norway. He acknowledged that Norway has been a partner in Indian shipping industry. He pointed out that these conferences should create more avenues for international cooperation.
During his inaugural speech, while emphasising on the significance of shipping sector in growth of the country, Capt J C Anand, Chairman Emeritus, Indian Register of Shipping raised grave concerns about diminishing tonnage of the sector. Taking note of the declining trend in growth of Indian shipping industry, he brought to notice that Indian shipping which was 1.18 per cent of world shipping has slid to 0.3 per cent. He stressed upon that it is the need of the hour that government should take captains of the shipping sector into confidence before clamping anything on this level-playing field. He recommended providing a level-playing field in the shipping sector so that it can give competitive edge to the global shipping industry. He suggested that if the united shipping industry has good leadership, long-term vision and strong agenda, which the government cannot ignore, for the growth of the sector in the country, the government has to support the stakeholders for the revival of the Indian maritime sector. He firmly believed that the policymakers along with leaders of the shipping sector can steer the industry out of this difficult phase. If the sector misses the opportunity of the next shipping cycle of which the whole world is taking advantage, it will be too late to do something. He requested Mr Gautam Chatterjee to place the young eligible cadets on foreign ships to save their frustrations. While applauding CHEMTECH Foundation for organising the event, Mr Noboru Ueda explored this opportunity to seek cooperation between maritime captains of Japan and India. He summarised Japan Govt’s initiatives and Japan’s various projects and technical innovations for the growth of Japanese maritime industry along with collaboration with other countries. He also stressed on the need for growth in Indian shipping industry by joint ventures and by following the footsteps of Japan & encouraging the growth in this industry. Mr Pinto talked about the problems, which have plagued the growth of the sector need the urgent attention for
Mr Gautam Chatterjee took note of the problems faced by the Indian maritime industry. He opined that such conferences give us further opportunity to work closely for better cooperation in bilateral sector. He said that the govt is thinking of putting in place some international grading system so that such information in public domain about the performance of maritime institutes will help for recognition of the best institutes for recruitment of cadets. He further mentioned that sustainability will come from these competitive mariners who are serving the foreign flagged ships. While concluding the inaugural session, Mr Ramamurthy Chairman of Technical Committee, SMP World Expo 2014 & President (Shipping), Reliance Industries Limited, felt the need of a strategic plan for augmenting the fleet for carriage of freight in order to counter the impact from the lack of adequate inter modal transport capability and emerging challenges to energy use and economic sustainability. He further hoped that National policies are introduced to ensure that shipping and port sectors are ready to operate in rapidly challenging environment of domestic as well as international freight domain. The two-day shipping conference had in depth brainstorming deliberations and presentations on Environment Emissions and Pollution Control, Alternative & Renewable Energies, Indian Navy and Coast Guard, Shipbuilding & Ship repairs, Inland Vessels, River Sea and Coastal Vessels, Shipping Finance and Taxation, Salvage & Legal issues. The crème de la crème of maritime sector like Dinesh Lal, Peter M Swift, R C Bhavnani, Captain Sunil Thaper, Mark Darley, J K Dhar, Rear Admiral Purandare, VSM, Cmde M Jitendran, S K Shahi, M V Ramamurthy and many more nourished the SMP World Expo Conference by giving insights and food for thought to the delegates and dignitaries. Ports Capturing Sea of Opportunities for India , the theme for Ports Conference had discussions and presentations on Effectiveness of PPP, and Futuristic Ports. February - March 2014 |
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[Feature]
Mr Gautam Chatterjee, IAS, Director General of Shipping along with Capt J C Anand, Chairman Emeritus, Indian Register of Shipping & Chairman SMP World Expo 2014 taking a round of SMP World Expo Exhibition.
IMU cadets giving guard of honour to the dignitaries during inauguration ceremony of SMP World Expo 2014.
JNPT Chairman N N Kumar addressing audience at inaugural session of Ports Conference during SMP World Expo 2014.
CHEMTECH SMP World Expo 2014 Leadership and Excellence Awards 2014 Hall of Fame (Late) Senior Advocate Venkateswaran Business Leader of the Year – Logistics Shashi Kiran Shetty, Business Leader of the Year – Shipping Bharat K Sheth Global Lifetime Achievement Noboru Ueda Outstanding Achievement & Education Tolani Maritime Institute
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During his inaugural speech, N N Kumar appreciated CHEMTECH Foundation’s initiatives in creating business alliances and bridging the gap for the excellent performance of the sector. While talking about serious hindrances blocking the growth trajectory of the port sector, he commented that slowdown of global shipping industry and flattening of Indian growth story is the biggest challenge for return over the investments in Indian sector. He stressed upon the fact that lack of responsive mechanism for environment clearance or land acquisition also requires the immediate attention of the government if they want to develop the port sector. Moving forward, he emphasised that all stakeholders including the policymakers are required to play more dynamic role to make this sector further attractive for domestic and international investors. CHEMTECH Foundation honoured the dignitaries with SMP 2014 Leadership & Excellence Awards for their achievements and outstanding contributions to the growth of the sector. (Compiled by Supriya Abhijeet Oundhakar)
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[Feature]
'Dynamic role of govt must for ports development' Due to growing market size, increasing household consumption level, good GDP growth numbers promises excellent growth opportunities for Indian port sector. But, the sector is struggling hard for its survival due to various issues like poor infrastructure, government policies which require urgent attention of policymakers for further growth. “If India wants to become leader in global port sector, the government should play dynamic role for its development,” emphasises N N Kumar, Chairman, Jawaharlal Nehru Port Trust (JNPT).
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orts are catalyst for import export trade. Port infrastructure is critical for the economic growth of any country. It is the vital link in international trade. Despite having a coastline of 7,517 kms dotted with 13 major ports and 287 non-major ports, India’s share in world trade is merely one per cent. India’s total external trade is estimated to have grown to USD 793 billion in FY 13 implying a CAGR of 17.8 per cent since FY 06. Consistently rising energy demands in the country have benefitted Indian ports from increasing crude oil and coal imports.
The EXIM trade offers and provides lucrative opportunities for growth in India. In order to handle growing international trade and overcome capacity constraints, Union Ministry of Shipping‘s Maritime Agenda 2020 envisages to triple cargo handling capacity upto 3.2 billion tonne by 2020 at Indian ports. The plan envisages investments of funds worth approximately of ` 3 trillion out of which investments in major ports will be ` 1.3 trillion and non-major ports will be ` 1.7 trillion.
For the current financial year, the government has also set a target to award 30 port projects enhancing capacity by 288 million tonnes with the investment of ` 25,000 crore. Out of 30 projects, 22 port projects have already been awarded by the end of January 2014. 19 projects out of 30 will be developed through PPP route, 7 by captive or private and remaining will be developed by the ports own resources. At the end of the 12 th Five Year Plan, Indian port traffic will amount to 943 million tonnes per annum for the major ports and 815 million tonnes per annum for the minor ports.
Traffic Handled by Non-Major Ports (MMT) (Source: Rohit Chaturvedi’s presentation at SMP World Expo 2014)
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[Feature] Limited financing avenues for port projects increase the cost of debt for the investor. Cost of fundraising depends upon the Risk-Return profile of the projects. Currently due to the limited financing avenues available to port projects, the cost of debt high side and simultaneously the PPP projects are also becoming riskier. Rohit Chaturvedi proposes that international debt can be serviced through the dollarised income
Rohit Chaturvedi Director - Transport CRISIL Infrastructure Advisory
of the port. Rupee loans can be easily re-financed through the ECB (External Commercial Borrowings) borrowings, which have smaller interest rates.
Capacity & Utilisation at Major Ports (MMT) (Source: Rohit Chaturvedi’s presentation at SMP World Expo 2014)
For the current financial year, the government has also set a target to award 30 port projects enhancing capacity by 288 million tonnes with the investment of ` 25,000 crore. Out of 30 projects, 22 port projects have already been awarded by the end of January 2014. 19 projects out of 30 will be developed through PPP route, 7 by captive or private and remaining will be developed by the ports own resources. At the end of the 12 th Five Year Plan, Indian port traffic will amount to 943 million tonnes per annum for the major ports and 815 million tonnes per annum for the minor ports. N N Kumar, Chairman, Jawaharlal Nehru Port Trust (JNPT), elatedly says, “All this indicates that the port sector is going to mark great progress in near future.” Though the figures depict good scope for upward trajectory of Indian port sector, the port industry is plagued by burden of poor infrastructure, lack of transparency in decision making, financing projects, government policies and reforms & lack of level playing field for major and non-major ports. 14 | ports story for smp mag supriya.indd 14
Due to recessionary trends in economy, growth path for Indian shipping sector is not smooth ahead and this poses the biggest challenge for returns over the investments in Indian sector. Ban on iron ore mining has aggravated the concerns of the sector. Drastic reduction of throughput of Goa port aptly highlights the woes of the sector. While talking about initiative taken by policymakers to bring the sector on success curve, Kumar explains that though various government initiatives like reforms in TAMP, laws and policies in major ports are right steps, much more is needed to bring stability to this sector in the country. Rohit Chaturvedi, Director, Transport, CRISIL Infrastructure Advisory, laments that there are some loopholes in relaxations given by the government in fixing tariffs to major ports. These gaps need to be placated. He recommends shift in role of TAMP (Tariff Authority for Major Ports) to a competition regulator. TAMP can also act as an appellate authority, which can deal with dispute resolution and grievances redressal for PPP operators.
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[Feature] Bevis emphasises that policymakers need to take efforts for making the country more investor-friendly as India, being categorised as Mid Range Country on investors’ attractiveness, has huge potential due to promising economic environment, growing market size, increasing household consumption levels, and good long-term GDP
Julian Michael Bevis Senior Director, Group Relations (South Asia), AP Moller Maersk
growth rates.
Loopholes in Relaxations for Fixing Tariffs to Major Ports • New tariff guidelines are not applicable for the existing berths/terminals at Major Ports • Clarity is required with respect to the basis for evaluating the port’s performance since revision in tariff is linked to it • With the highest tariff becoming the Reference Tariff and the Base Tariff for any port to be benchmarked within 15 per cent range of it, the maximum tariff chargeable is likely go up for most projects; maximum variation of tariff at any given new berth at any major port cannot differ by more than 30 per cent. • This range fails to take into consideration port-side and marine-side attributes that may give a particular port substantially better position to charge higher tariff and vice-versa. • In case of tariff reduction due to competition, actual revenue will be derived from charged tariff while the revenue share will be derived from reference/ceiling tariff • Companies quote revenue shares aggressively; if cargo development is less than expected, it becomes difficult to service revenue share Finance in port projects is one of the key issues, which needs to be addressed quickly. Limited financing avenues for port projects increase the cost of debt for the investor. Cost of fundraising depends upon the Risk-Return profile of the projects. Currently due to the limited financing avenues available to port projects, the cost of debt high side and simultaneously the PPP projects are also becoming riskier. Chaturvedi proposes that international debt can be serviced through the dollarised income of the port. Rupee loans can be easily re-financed through the ECB (External Commercial Borrowings) borrowings, which have smaller interest rates. Last year, JNPT received poor response for tax free bonds, which they had floated for financing the projects. According to Kumar, presently there are finance institutions for development of infrastructure in general and there is no port specific financing body to take care of the development. The sector needs port specific entity or authority for finance. Port connectivity is of the utmost importance for smooth movement of cargo, which is one of the factors deciding cost of goods in the global market. Due to poor hinterland connectivity, most of Indian ports are not able to make much progress despite having world class infrastructure.
Julian Michael Bevis, Senior Director, Group Relations (South Asia), AP Moller Maersk believes that ports can’t develop in isolation. Development of ports needs supporting infrastructure like hinterland connectivity, rail & road connectivity. Lack of envisaged well planned program for port connectivity in Five Year Plan is the stumbling block in attracting investments in the sector. Kumar stresses upon that the government should develop automatic port connectivity plan embedded with Five Year Plan so that it will boost investments in the sector. The government’s initiative in facilitating basic infrastructure will also help to gain the confidence of investor. Reiterating JNPT Chairman’s opinion, Chaturvedi comments that government provided connectivity infrastructure will enhance project attractiveness from the perspective of private players and reduce uncertainty. According to an independent economic analysis, India ranks 21 st on investors list for making investments in the country. Physical infrastructure of port can not develop without legislative infrastructure which means all clearances like environment, security, acquisitions and rules for operation of port are mandatory so that the investor can get returns on his investments. February - March 2014 |
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[Feature]
(Source: Julian Michael Bevis presentation at SMP World Expo 2014)
Bevis emphasises that policymakers need to take efforts for making the country more investor-friendly as India, being categorised as Mid Range Country on investors’ attractiveness, has huge potential due to promising economic environment, growing market size, increasing household consumption levels, and good long-term GDP growth rates. While moving forward, he states that the government should support legislative infrastructure like congenial policies, rules and regulations for quick review & progress of projects in pipeline. “Ports infrastructure industry should satiate basic customer requirements like turnaround time, length of draft, productivity so that Non-corrosive Materials for Ports India loses ` 1.5 lac crore due to corrosion, which is 3 per cent of GDP. Chlorides in seawater corrode materials at ports. While suggesting solution on this issue, Yatinder Pal Singh Suri, Country Head, Outokumpu, recommends, “Use of non-corrosive materials for port infrastructure will make investments long lasting and sustainable.”
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investors should be able to incur profits on investments,” elucidates Bevis. Chaturvedi suggests that necessary clearances can be put in place through the respective port authorities as clearance delays increase the project risk and decrease investor confidence. Lack of responsive mechanism for environment clearance or land acquisition has taken a toll on many port projects. In the past, due to long delays in clearance or land acquisition, global players have relinquished projects. Requisite clearances and delays also inflate the budget of investor. “If India wants to dominate the global ports industry, the policymakers should pay immediate attention for speedy clearances to attract investments in the sector,” shares Kumar. He further adds that though Indian ports are attractive proposition and indeed attracting substantial private investments, all stakeholders including the government are required to play more dynamic role to make this sector further attractive for domestic and international investors.
(Compiled by Supriya Abhijeet Oundhakar)
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[Feature]
PPP Model in Ports: Long Way to Go World class port terminals, which develop through PPP model are testimony to the liberalisation of economy in 1990s. Due to this, the performance of ports has ramped up in terms of vessel turn around time, market exposure to Indian cargo, variety of cargo handling equipment. There are benefits of PPP as well as some loopholes which need urgent attention of the decision making body. Otherwise the sector will become unviable for private entity investments.
In order to attract private investment and demonstrate successful PPPs, it is essential that best practices are adopted in the whole process. Many such best practices are available with world financial institutions which can be adapted to suit.
S. S. Kulkarni
Secretary General, Indian Private Ports & Terminals Association E: secygen@ippta.org.in
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orts serve as vital links in the logistics chain connecting the production – consumption centres. Ports are also the ‘meeting points’ of the three major modes of transportation, viz. trucks, trains and ships. The economic development of any nation, leaving aside landlocked countries, is directly linked to its efficient network of ports. No wonder, every nation strives to develop ‘world class ports’. Such ports are those, which facilitate import and export of goods in an efficient, time-bound manner and at the same time continue to attract increased throughput. Some of the ingredients for world class ports are- infrastructure development, use of information technology and value added services and promoting competition through privatisation. The new demands of shipping and international trade are necessitating high technological expertise, as a result of which, there is a growing separation of port authority from port operator, with the port authority focusing on policy and regulatory role while a range of private port operators and port service providers taking over operations/services. With logistics gaining importance in the business processes, shippers/importers are becoming careful on the choice of gateway ports and their hinterland connectivity, leading to inter-port competition. Private Sector Participation The process of port privatisation normally does not involve pure privatisation, since land and infrastructure are generally not sold by the state. The process, instead, involves private sector participation (PSP) in operations and investment in equipment and facilities. Due to the diversity and complexity of ports and the services offered by them, the PSP process can be divided into stages, like (i) institutional reforms, (ii) divestiture of existing services and assets and (iii) investment in new facilities and services. These stages can be implemented one after the other or in combination. For each port component, there are many possible public-private partnerships. But in order to attract private investment and demonstrate successful PPPs, it is essential that the best practices are adopted in the whole process. Many such best practices are available with world financial institutions, which can be adapted to suit. The World Bank has articulated some institutional models for ports, like a) service port model, b) landlord port model, c) tool port model, d) private services port. In India the “services port” model has been traditionally followed, wherein the port trusts act as port authority as well as port operator. Since the 1990s, however, there is a gradual movement towards the “landlord port” model. Port Privatisation in India After Independence, the process of consolidating the ‘major’ ports of India began with the enactment of the February - March 2014 |
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[Feature]
Key Policy Central Government
• • • • •
100% FDI is permitted 100% income tax exemption is available for a period of 10 years GoI can provide a capital grant of up to 40% to enhance the viability of the project IIFC has been established to provide long term funding for projects Department of Shipping has already put in place guidelines for private sector participation; including Model RFQ and RFP documents, & MCA to bring in uniformity to the agreements for major ports
Major Port Trust Act of 1963. Today there are 12 Major Ports (under the control of the Central Government) in the country, six each on the east and west coast. Two more on the east coast have been recently announced. While Ennore Port (now being named as Kamrajar Port) functions under the Companies Act, the corporatisation of the rest is also on the anvil. Around 95 per cent of the EXIM traffic of the country by volume is carried through sea. Until the 90s, the Major Ports were the only gateway interface for the cargoes. Faced by the burgeoning traffic on the one hand and the chronic congestion at the ports due to inadequate capacity/ scarce funding, the Government of India then took an in-principle decision to invite private participation for developing port capacities. The PPP model seemed to be the panacea recommended by international financial agencies like IMF/WB for creating infrastructure in the developing economies like ours. To a certain extent this appears to be correct. A country like India with teeming millions under BPL, we can ill afford to invest huge public funds for commercial infrastructure like ports. Such funds should be better utilised for social infrastructure like health/education. Though the concept of private ports was conceived in the 1980s, Pipavav port in Gujarat being the first private port to come up in India, privatisation gathered momentum 18 | IPPTA-supriya.indd 18
State Government
State governments are making necessary changes: • Infrastructure Development Acts have been constituted in Andhra Pradesh and Gujarat • State maritime boards have been set up in Gujarat, Maharashtra, Tamil Nadu, Orissa and Andhra Pradesh • Some states have started using the swiss challenge method for infrastructure con Non-major ports are free to x their own tari s with approval from state governments State government sometimes o er longer concession periods of up to 50 years
only after the major economic reforms of 1991 and liberalisation policies adopted in various sectors. The first major port privatisation initiative took place in December 1995, with JNPT coming out with a global tender for a container terminal. The bidding process was completed in August 1996. Subsequently, in October 1996, the Government published the port privatisation policy named as ‘Guidelines to be followed by the Major Port Trusts for Private Sector Participation in the Major Ports’, under Section 42 of the Major Port Trusts Act 1963. The policy guidelines required that private participation should be by tender on a build, operate and transfer (BOT) basis. The successful bidder would be decided on the basis of the maximum royalty/revenue share offered on the minimum guaranteed cargo handling/turnover. Subsequently, a bill was introduced in the Parliament to replace the Port Laws Amendments Ordinance 1997 promulgated by the President of India and the Major Port Trust Act 1963 was amended in April 1996 to enable the Central Government to set up the Tariff Authority for Major Ports (TAMP). (There were various reasons for setting up the tariff regulatory authority, the most important being that it would provide a measure of transparency in determining various rates and charges for services rendered both by the Major Ports and the private operators rather than have the rates being decided by the Port Trust themselves who would be in direct competition with the private operators).
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[Feature] In the last 15 years, all the major ports have given out their berths on BOT basis and world class private terminals have come up for handling a variety of cargo. The “non-major” ports operating under the jurisdiction of state governments have shown even better success. The shining examples at Mundra, Krishnapatnam, Dhamra, Karaikal all bear testimony to the successful PPP model. 48 per cent of the EXIM trade now passes through the non-major (private) ports of the country. The port performance also has improved leaps and bounds. The trade has now ample connectivity worldwide and the waiting period at the anchorages as well as the berths has become a thing of the past. In many regions, port capacities far exceed the demand and exporters/ importers can choose a port/terminal of their choice. It is also observed that the trade is willing to pay additionally for better services at ports. This explains why private ports which at times are much pricier than the major ports, are well patronised since what matters to the cargo-owner is the end–to-end supply chain costs for moving their goods and not just the port tariff. Buoyed, by such a success, the Ministry of Shipping is already looking at doubling the Indian port capacity from the present 1300 MTPA to 3200 MTPA by 2020 all through private participation.
Until the 90s, the Major Ports were the only gateway interface for the cargoes. Faced by the burgeoning traffic on the one hand and the chronic congestion at the ports due to inadequate capacity/scarce funding, the Government of India then took an in-principle decision to invite private participation for developing port capacities. The PPP model seemed to be the panacea recommended by international financial agencies like IMF/WB for creating infrastructure.
Everything Rosy? While it is fact that the PPP model of infrastructure development has worked well in the port sector than in any other, the road ahead is not so smooth. There are quite a few hurdles, which need to be ironed out as fast as possible to achieve the desired objective. “Water-tight” MCA: While following the PPP mode for infrastructure development, most countries keep a scope for a ‘review’ in the concession agreement, since 30/50 years is too long a period to take care all of kinds of eventualities. However, in India, the MCA is very rigid and water-tight. While contractual obligations are sacrosanct, the
agreements become too one-sided and the private entity only gets penalised even of no fault of theirs. Recently, after the debacle in the road sector, the Government has revised the MCA with respect to exit norms. Same should be permitted in the port sector. Port Tariff Policy: Tariffs being central to investment decision by any private entity, it is essential that a uniform tariff-setting policy is adopted. While the nonmajor ports are not bound by any regime, there are four sets of guidelines in the major ports arena (including the one to be notified soon exclusively for landlord ports). This is bound to lead to not only unhealthy competition but also undesired discrimination. A non-administered tariff regime (competition-based/market driven) for the entire port sector, is the need of the hour. DPR and Technical Info: A quality DPR helps in getting realistic bids. Environmental clearances should be in place so that there is no delay in completion of the project and thereby not becoming unviable. Norms for security clearances should be transparent. Customs Policies: There is no clarity/uniformity by Customs with regard to certain procedures to be followed by private terminal operators at major ports and at times left for interpretation by the field formations. For e.g., bank guarantees and insurance covers to be furnished by the terminal operators, recovery of charges towards deployment of staff/officials, etc. Customs are treating terminal operations at par with CFS activities, which is incorrect. Fresh Commitments Post Award of Tenders: Surprise elements get introduced after award of the concessions. Recent cases of asking existing private terminal operators to deploy CISF for watch and ward, installation of radio-active detection equipment/scanners are few such examples. Such additional demands, which entail huge expenses, should be known to the concessionaires before-hand so that same can be taken into account at the time of bidding. There should be scope for increasing tariffs suitably to meet these eventualities. Electricity Tariff Classification for Seaports: There is no uniformity in the country with regard to the consumer category classification for seaports. Some SERC classify ports as ‘commercial’ entities instead of ‘industrial’, as a result some of the seaports have to pay electricity charges at the rate applicable to shopping malls. State Road Levies: Authorities in some states treat port equipment like RTGC/HMC as any other commercial vehicles and subject them to high taxes. There should be clarity/uniformity in such matters. February - March 2014 |
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[Feature]
Need of the Hour: Relaxation in Cabotage Law Cabotage law has been a subject of debate for quite some time. For taking a cognizant view, this article discusses cabotage law in perspective of status of coastal shipping and domestic shipping industry. While current situation of coastal shipping in India presents a compelling argument in favour of relaxation in cabotage law, current situation of Indian shipping industry cannot be overlooked.
A key reason generally cited for such underutilisation of coastal shipping is cabotage law, wherein Indian flagged ships are given preference for coastal shipping. Some users argue that there is limited capacity in the Indian shipping industry and thus relaxation on cabotage law is essential.
C
abotage law in India provides right of first refusal to Indian flagged ships for coastal shipping. Such or similar laws are there in various other countries of the world, with the intent to promote/protect interests of domestic shipping industry. Countries like USA, China, Indonesia etc. have absolute cabotage i.e. only their own flagged ships are allowed for coastal cargo movement. In India, the cabotage, which is provisioned in section 406 & 407 part XIV of Merchant Shipping Act 1958, is not absolute i.e. foreign flag ships can be used for coastal cargo movement, if Indian flagged ship is not available. In some major maritime nations, substantial cargo support is also extended to national flag ships, which is not the case with India. However, recently Government of India has announced an incentive scheme to encourage manufacturers and transporters to shift the movement of their goods From rail and road to coastal shipping, this would in turn benefit Indian flagged ships. Cabotage law has been a subject of debate for quite some time. For taking a cognizant view, this article discusses cabotage law in perspective of status of coastal shipping and domestic shipping industry. While current situation of coastal shipping in India does present a compelling argument in favour of relaxation in cabotage law, current situation of Indian shipping industry cannot be overlooked.
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Vishwas Udgirkar Senior Director Deloitte India E: vudgirkar@deloitte.com
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[Feature] Need to Promote and Leverage Coastal Shipping Benefits of coastal shipping are multi-fold. It can play a very important role in multi-modal freight transportation, leading to reduction in logistics cost as well as reducing pressure on highways and railways. It can also carry relatively larger size of parcels and in other cases options like Ro-Ro or Lo-Lo can remove hurdles of multiple handling also. There are other benefits also in form of reduction in pollution and rationalisation of demand on natural resources. Reasons for Poor Status of Coastal Shipping • Shallow draft at non-major ports • High cost structure at major ports • Evacuation and connectivity issues • Empty movement in return trips • Taxation provisions • Lack of awareness about benefits of coastal shipping • Ageing Indian Shipping Fleet • Multiple taxes • Cabotage Law allowing only coastal movement of Indian flagged ships
Another characteristic of coastal cargo movement in India is that out of the total coastal cargo movement in India, a major share is that of bulk cargo such as POL and coal. However, there is significant scope for movement of containerised cargo through coastal shipping, which has remained unutilised. There are multiple reasons for poor status of coastal shipping in India, and such reasons include shallow draft at non-major ports, high cost structure at major ports, evacuation and connectivity issues, empty movement in return trips, taxation provisions and in general lack of awareness about benefits of coastal shipping. A key reason generally cited for such under-utilisation of coastal shipping is cabotage law, wherein Indian flagged ships are given preference for coastal shipping. Some users argue that there is limited capacity in the Indian shipping industry and thus relaxation on cabotage law is essential. Foreign flagged ships can not only bring the required capacity, but also competitiveness in prices and ease of planning in case of transhipment. Coastal cargo movement has inherent issue of one directional traffic leading to ship coming back empty in return trip. If foreign flagged ships are allowed for coastal cargo movement, overseas cargo ships can carry costal cargo and this issue of empty return can get addressed. Indian Shipping Industry Globally shipping industry has been experiencing turbulent waters from 2012 onwards, because of continued economic downturn. Indian shipping companies have been no exception and they too have been facing problems of very low charter hire and freight rates in all segments of shipping and thus restricted cash inflows. Over the years the share of Indian ships in the carriage of India’s overseas trade is declining. From about 40 per cent in the late 1980s, it has declined to about 11 per cent recently. Furthermore, Indian ships are ageing, with the average age of the Indian fleet increasing from 15 years in 1999 to about 17 years in 2012.
Approximately 95 per cent of the India’s trade by volume and about 68 per cent by value are transported by sea. However, scenario of coastal shipping in India remains bleak. In India, coastal shipping accounts for about 8 per cent of the total domestic cargo movement in India, on a tonne-km basis. The same per cent in other regions/ countries is 42 per cent in Europe, 43 per cent in China and 15 per cent in USA. While the role of coastal cargo movement has been less than optimal in India, its growth also has been slower. From 1997-98 till 2012-13, the overseas trade cargo at Indian ports has increased by a CAGR of about 9.1 per cent, while the CAGR of coastal cargo in same period is only about 4.7 per cent.
Growth in capacity of Indian flagged ships has been lagging behind compared to the growth in cargo at Indian ports (i.e. with CAGR of about 8.1 per cent from 199798 to 2012-13). Currently, there are around 870 Indian flagged ships involved in coastal shipping having capacity of about 1.1 million GRT. Out of this, about 140 are cargo carriers and others are tugs, offshore supply vessels and port craft. From 1997-98 till 2012-13, capacity of Indian shipping industry (in GRT) has grown with a CAGR of about 2.7 per cent wherein CAGR of ships for coastal cargo movement is 3.4 per cent and that for overseas cargo movement is about 2.6 per cent. February - March 2014 |
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[Feature] Ageing of ships is another issue in Indian shipping industry, and is more severe in case of coastal cargo movement. From 1998 till recently, the percentage of Indian shipping capacity in GRT, above age of 20 years has largely remained in range of 20-35 per cent for overseas cargo, while the same is in range of 60 per cent for coastal cargo in last 7-8 years. Indian shipping industry argues that they have sufficient capacity to serve the coastal cargo movement requirements. However, the hindrance they face is in form of multiple taxes. Apart from the tonnage tax, which is to be paid on the basis of cargo carrying capacity of a ship, there are other taxes, which Indian ship owners are required to pay. In fact, this is also being cited as one of the reasons why international ship owners are reluctant to register their ships in India. It is to be noted that already where 100 per cent foreign direct investment (FDI) in shipping is permitted through the automatic route. Taxation is also cited as one of the reasons why foreign shipping companies can offer more competitive freight charges.
Relaxations Given on Cabotage Law in India In Nov 2013, Government issued a circular giving first right of refusal to Indian flagged Indian built ships followed by Indian flagged ships, followed by Indian built foreign flagged ships, for coastal shipping. The change aimed at encouraging shipbuilding in India. Such a policy is already followed in countries like USA, Indonesia, and Brazil etc. However, this change was withdrawn within one month owing to reservations from Indian shipping industry. The reasoning given for the same was that it would be unfavourable for Indian firms who have already invested for purchase of ships based on rules existing earlier. Earlier, in September 2012, Government of India decided to relax cabotage law for Vallarpadam International Container Trans-shipment Terminal (ICTT) in Cochin port to allow foreign flagged ships for transhipment of EXIM containers to and from ICTT. This is applicable only for foreign-owned and registered ships that move containers out or in through the Vallarpadam ICTT in Cochin port. This relaxation is 22 | Cabotage LawVU.indd 22
applicable only for three years and after such three years the decision would be reviewed by the Government. Interestingly, in last one year, while such relaxation hasn’t generated much interest in shipping lines, there has been demand for similar relaxations from various ports like Mundra and Pipavav in Gujarat, Vizag in Andhra Pradesh and Vizhinjam in Kerala. There have been cases in India when cabotage law was relaxed. Cabotage law was relaxed in 1992 for five years for the Jawaharlal Nehru Port Trust, Mumbai and was further relaxed for one year in 2006. Vallarpadam was more of a test case for relaxation of cabotage law. After September 2012, it took another six months for putting required procedures in place. However, in another one year from there, the anticipated response is yet to be seen. In general understating, cabotage law was always considered as one of the key reasons which discouraged foreign ships from Vallarpadam ICTT for trans-shipment. To Sum It Up The options relating to cabotage law have to be seen in perspective of important stakeholders, which not only include users and Indian shipping companies but also Indian shipbuilding companies. Increasingly, world is also moving towards market-driven economics by removing protectionism and allowing domestic companies and international companies to compete in open market. However, movement of coastal cargo has been an exception, with major maritime nations in the world following cabotage rules. While relaxation in cabotage laws in India might attract foreign flagged ships to coastal shipping and help the cause of coastal shipping, the current taxation regime and lack of competitiveness of Indian shipping industry, coupled with other industry issues, would have extremely unfavourable impact on the Indian shipping industry. On the other hand, mere continuation of cabotage laws in India is not sufficient enough for promoting Indian shipping industry. The industry is to be supported through various other policy initiatives like cargo support, tax rationalisation, dedicated port capacities for coastal cargo, promoting multi-modal linkages and port connectivity etc. This would require overhauling policies for port and shipping industry, while balancing the interests of various stakeholders including that of ports, users, shipping companies and shipbuilders. This also happens to be a right time for such systematic reforms as currently sectors and industries are in transient stage, requiring urgent attention from the Government.
References: Annual Report 2012-13, Ministry of Shipping, Government of India CII Publication on Coastal Shipping, Apr 2013 Freeing Coastal Shipping, The Hindu, 11th Sep 2012 Ministry of Shipping, Government of India Ministry of Shipping, Government of India Ministry of Shipping, Government of India
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[Feature]
CSR in Dredging Projects The awareness of environment, sustenance of the ecosystem and socioeconomic conditions enhanced rapid development of marine infrastructure, methodology and planning for execution of the projects successfully. The author in the present paper has highlighted in detail regarding project, socio-economic conditions and planning for successful execution of projects keeping abreast with Government legislations and ordinances involving the locals for their socio economics, rehabilitation and displacement of the habitants in terms of the corporate social responsibility of marine industries seeking for better solution. Development of the SSCP channel in the Palk Strait has abruptly ceased due to the intervention of political and judicial process, however, the dredging activities with constant shifting of the channel due to the sediment movements and hydraulics raise serious questions on its impact on ecology and environment.
Prof Dr GYV Victor
Member of Board – EADA (Asia & Pacific region), Secretary EADA (India) & Advisor – Dharti Dredging and Infrastructure Ltd E: gyv@india.com
D
evelopment of port and harbor, marine industry usually often produce bold headlines in the public debate and local media, however, if noticed at all, they are possibly only in the regional or the local media, which might cause fierce debates and unpredictable delays in execution of project. Very often, it is not the constructional development or planning of marine or ports industry, but socioeconomic issues of the project as most of public will not be aware of this industry with rapid modern developments to abide by the increasing government ordinances and legislations, perhaps the debates are due to the public interest or protest with their apprehension for their livelihood, rehabilitation, socioeconomics or uprooting for displacement and relocation of the habitants, for the unseen developmental process under the water level or sub strata to develop the port and harbor that may have direct or indirect impact on the environment, topography and bathymetry of the location that shall lead to depletion of the socio-economic conditions of these local population. Further, in many developmental projects the general negative public perception and the lack of understanding regarding the developmental activities, their relationship to the environment and the economic issues are echoed among small segment of population to obstruct such developmental activities on the coast. These situation results in more troublesome process as most of the government agencies design and establish guidelines February - March 2014 |
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[Feature] for the execution of the project amidst the echo of few concerns about the projects.
Technical Details of Sethusamudram Shipping Channel Project
With new legislations and Government ordinances being framed for implementation to adhere to various guidelines, regulations and conventions for execution and development of port and marine projects, the industry has transformed itself to keep abreast of latest development elsewhere. Further, the awareness about environment, preservation of ecology along with the human factor leading to socioeconomic conditions provides as toll for unperturbed rapid development of marine infrastructure for execution of the projects successfully. Such projects require fine tuned guidance and politically acceptable terms of referendum, which should co-exist with the project management to be well balanced between science, politics, economy and ecology (Fig 1).
Sethusamudram Shipping Channel Project (SSCP), is deemed considered to be pride of the country, if successfully implemented for being the longest sea-bed dredging project developing offshore shipping channel in Palk Bay, to reduce the navigational distance to avoid circumnavigation of south coast of Sri Lanka for ships that navigate between east and west coast of India and vice versa. In SSCP channel the ships would navigate through Gulf of Mannar and Palk Bay. SSCP channel’s total length of 167.22 km, width of 300 metre channel shall be dredged to depth of 12 metre, the total length is divided into 4 works consisting dredging in Adams Bridge and Palk Strait, since the central channel of 4 works are established to have adequate depth, these segment will not be dredged but
Science Due to the high sedimentation rate as published by the maritime surveys between 1960 and 1986, suggest that there are specific regions in the Palk Bay where the annual depth tends to reduce by
Ecology
Economy
25 to 75 times higher than the values proposed by Changramohan et al, it is interesting to note that the two of the four designed SSCP works of the ship channel coincides in zones of higher sedimentation rate.
Politics Balance of the project management
In the recent past, one of the biggest Indian marine project that was and is till widely debated and analysed is the development of the channel to avoid circumnavigation around Sri Lanka to transit between East Coast and West Coast of India and vice versa. The nation witnessed local resistance transforming into political resistance and finally the aggrieved parties knocked the doors of court to relook into the viability of the project. Nonetheless in the process Union Government have spent substantial money on the project and due to the imposition of the stay order from the apex court, the work was stopped resulting undoing of the work carried out in the substrata of Palk’s Strait. The author in the present research work shall discuss in detail the media hype followed the temporarily shelved Sethusamudram Shipping Channel Project (SSCP) in detail regarding the technical feasibility of the project, socioeconomic conditions in conjunction with corporate social responsibility and the planning for successful execution of the project keeping abreast with the Government legislation and ordinance. 24 | GYV Article.indd 24
shall need bar sweeping after the full channel is dredged and is ready for navigation. Perhaps, the Indian dredging companies are experienced in maintenance and capital dredging works of ports and harbors or waterways, watersheds within or close proximity to the shore, nonetheless SSCP dredging shall be a great challenge for the Indian companies to prove their expertise and caliber in capital dredging of the channel offshore that is located approximately 34 km away from the low water line. To meet the requirement of handling deeper draft ships and to deepen and widen the channel, dredging industry has started to boom in the last decade and further interesting to note newly incorporated companies have added to the national tonnage in terms of handling the domestic requirement. The port infrastructure is also developing at the same phase to handle the water borne cargo volume with a much reduced turn around time. Amidst all these
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[Feature] developments, SSCP is deemed considered to be pride of all the projects considering the quantum of marine construction work, dredging, the development of the port infrastructure and the development of the areas associated and adjacent to the channel. Earlier, there had been serious questions from various quarters about the feasibility and viability of the project, which was effectively and efficiently taken care by the model studies and impact assessment studies by various government agencies, perhaps scantly and contrast information of these analysis has led to review the issues in the current paper. Technical Issues for Review Development of the SSCP channel in the Palk Strait has abruptly ceased due to the intervention of political and judicial process, however, the dredging activities with constant shifting of the channel due to the sediment movements and hydraulics raise serious questions on its impact on ecology and environment. The analysis of the records indicates the quantum of sedimentation and siltation has been much higher than the earlier predicted values without increasing the depth but due to slight change in bathymetry of the sub strata. In the light of the above, SSCP project, with the longest navigational channel in India, of 167.22 km shall require to revisit the dredging methodology and schedule as the dredged channel might have been confronted with dramatic fluctuations in sedimentation movement, change of underwater conditions, atmospheric conditions and a steady rise of sea level, although there are substantial annual fluctuations, the change in dynamics, hydraulics, sedimentation movement, dunes formation due to current and etc, it seems that the frequency and intensity of storms is increasing enlarging the need to revisit the methodology and the schedule for effective and sustainable coastal defence of Sethusamudram Channel with perseverance of ecosystem of the bio-rich sphere. Nevertheless, this present short notes raise few relevant technical issues that need to be addressed effectively and revisited in order to clear all the ambiguities. The current level of data availability and the understanding on the sediment patterns and the associated dynamics existing in the Palk Bay can’t be reliable without adequate information and or work being carried out in this region. It is to be anticipated, while dredging the Adams Bridge, the flush of sediments draining into the south of Adams Bridge might result in a different sedimentation pattern and associated dynamics with change in the velocity and turbidity levels of this region. Chandramohan et al calculated the annual sediment load for Palk Bay being one of the permanent sediment sink zone as 58.8 x 106 cubic metre, however, National
Environmental Engineering Research Institute (NEERI) calculated the net annual sediment transport in these region as 2.657 x 105 cubic metre, which was in conformance of the data published by Sanil Kumar et al, nonetheless these quantum accounts only for 0.45 per cent of the sediment in the total sink region, however, there is no reliable date to account for 99.55 per cent of the total sediment in the sink region, which is the deciding factor for sustained and prolong maintenance dredging. Due to the high sedimentation rate as published by the maritime surveys between 1960 and 1986, suggest that there are specific regions in the Palk Bay where the annual depth tends to reduce by 25 to 75 times higher than the values proposed by Changramohan et al, it is interesting to note that the two of the four designed SSCP works of the ship channel coincides in zones of higher sedimentation rate. In absence of any reliable data of the sedimentation rate, once the channel is deepened there is a possibility of high sedimentation resulting in higher quantum of the maintenance dredging unlike the data published by NEERI as 5 x 105 to 1 x 106 cu-m / year. Further, numerous ecological studies indicate that the bio-rich Gulf of Manner with abundant coral growth is liable for destruction and shall result in depletion of the bio reserved area due to the high turbidity and the sediment plume by dredging activities to deepen, widen the channel and subsequently to maintain the dredged channel of 167.22 kms. In absence of adequate data regarding the nature of the dredging spoil, shall increase the commercial risk for Indian and the International competitors of repute, whereby the risks involved will be covered and included in terms of the contract cost resulting in a linear quantum of the budget cost. Union Government finds flaw in its own appointed scientific committee that was entrusted with feasibility study of Sethusamudram project, neither was the report submitted by the committee debated nor discussed by any subject experts but the Government preferred to reject the report and informed the Supreme Court that after 24 months of study of its committee, the Government shall prefer its own earlier alignment channel for the project. The successive State Government of Tamil Nadu Pollution Board didn’t issue the clearance certificate that is mandatory for the projects on the concurrent list. Sethusamudram channel designed for 12 m CD and 300 m bottom width shall accommodate less than 30,000 DWT with a navigable distance of 167 km of the long channel transiting through Adams Bridge and Palk Straight, as per the IAPH Norms, ships transiting through this proposed channel shall be the ‘sitting ducks’ as the ships can’t be on full speed ahead due to the draft and the width restrictions of the long channel resulting in economic unviability. Opening of the Adams bridge shall change the turbidity and dynamics with unpredictable maintenance February - March 2014 |
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[Feature]
Numerous ecological studies indicate that the bio-rich Gulf of Manner with abundant coral growth is liable for destruction and shall result in depletion of the bio reserved area due to the high turbidity and the sediment plume by dredging activities to deepen, widen the channel and subsequently to maintain the dredged channel of 167.22 kms.
dredging throughout the year in the longest channel, the cost analysis of the scanty number of ships transiting the channel vis-Ă -vis the maintenance dredging cost shall confirm technical, operational and economic unviability of the proposed channel apart from severe impact on the biosphere and environment. It is a myth that the dredged channel on the northern channel i.e. Palk Strait shall remain at the dredged datum after the dredging operations was discontinued three years ago. If dredging has to commence again, it will be a fresh start due to the accumulated sedimentation due to the littoral drift and the seasonal changes. Unless these ambiguities are addressed by the policy makers to the people and as well to the judicial officers, it shall be difficult to have development and the project execution. It is pertinent to mention here already huge quantum of money was invested for the execution of the project without any development. Perhaps, considering the recession in the container market and the infrastructure development in Sri Lanka, it is imperative that our policy makers should look forward for establishing coastal shipping and inland waterways that shall connect the landlocked commercial zones for sea trade, that is cheaper, environmentally safer mode of transport than developing the longest channel that shall incur annual maintenance cost, which shall be higher than the rate of return. Socio Economic Issue Until recently, little attention was given to the vision and the need of people, who are directly affected by the changes enforced by the execution of projects and it is time to turn the tables and place people at the forefront while executing marine and dredging projects. The recent survey, in implementing Sethusamudram project, indicates the need for communities to take a lead in planning their own destiny with social planning becoming a critical component. Sethusamudram Project, along the coast in the Gulf of Mannar and the Palk Bay shall affect 138 villages and towns belonging to 5 districts of south Tamil Nadu. The socio economic profile of the fishermen in these villages is very low, and more than 40 per cent of the fishermen families are indebt. Due to construction of the infrastructure, the land access now available for the local 26 | GYV Article.indd 26
fishermen for traditional fishing will be hindered unless and until there is an alternative options and or land available for carrying out their livehood. Further, the dredging schedule and the methodology should be informed to the fishermen in advance to avoid unpleasant situations, whereby an update of the schedule of the dredging and other land works should be accessible to the local village chiefs, who should be the spokesman to the village and inform fisher folks accordingly. The Government and the local Non Government Organisations should encourage and educate the local fishermen to adopt to the changing scenario and explore employment opportunities, which will be in abundance due to the involvement of international firms who believe in the local knowledge and promote the employment opportunities for the local to keep them in good books. Furthermore, considering the quantum of the project and the alternative employment possibilities, it shall also be the onus of responsibility that the Indian and international companies those are awarded the project work should adopt and device reasonable measures within their social corporate responsibility for upliftment of the local community. Conclusion In view of the above it is clear that there will always be public and political competition among different stakeholders about their potential contribution to the projects resulting in head on collision with the interest and claim of some social and economical groups. It is to be noted that the apprehension about the project and the lack of understanding has to be cleared, the most effective tool is communication, the discussion with the stakeholders when the lack of knowledge and fear of potential socio economic issues becomes a problem for a planned mega projects. The process of improving mutual understanding and acceptance of the objectives and arguments with regard to the projects may, therefore, clear all the apprehension and subsequently all the quarters will provide a common platform for an acceptable plan for the project, resulting in a win-win situation to improve the public interest in such projects. Nonetheless, keeping abreast with the developments and plans using techniques like community visioning for better management of natural hazards and physical development is necessary for successful completion of the projects. Sethu project has also witnessed that the community visioning requires full support of the Government and the private sector to ensure that the proactive measures and action to be taken in successful implementation of marine and dredging projects as well as to meet the nation’s vision to build its natural resources to enhance economic reforms and cater to all other industry utilising the waterways and waterborne transportation. Perhaps, this is the wake up call to build better and stronger industry to move inland away from danger.
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[Feature]
Implications of NATO Naval Ship Code R M Simpson
Global Lead – Naval Ships Lloyd’s Register E: robert.simpson@lr.org
Rationale behind the ‘Implication of NATO Naval Ship Code’ for Navies is to demonstrate that Ships of War and Troopships meet the requirements of this international convention on maritime safety. This article provides insights into the development of the Naval Ship Code: the principles and concepts adopted in the Code, experience of applying the code in practice; and recent developments of the code which are moving it further towards a purely Goal Based position.
I
n December 2003, the then NATO Naval Armament Group formally approved the formation of the NATO NG6 Specialist Team develop a NATO equivalent of SOLAS 1 that would allow navies to demonstrate that they meet the requirements of this international convention on maritime safety. Since then, work has progressed through various Working Groups established by the Specialist Team to adapt the requirements of SOLAS into the naval environment. Chapter 1 of SOLAS, Regulation 3, item a) defines that the convention does not apply to “Ships of war and troopships”. This clause has led many to believe that nothing contained within the convention has any relevance to a naval vessel and has therefore tended to be ignored completely. With the introduction of the principles of Classification to naval ships though, the symbiotic relationship between IMO conventions and Classification Rules have become more clearly highlighted and the need to put in place at least some of the components has been identified. In fact when SOLAS and other associated conventions such as MARPOL 2, ILO Convention 3, ColRegs 4 and the Loadline Convention 5 are considered in detail, there is much that is of value to consider and can be applied. What has been missing is a simple mechanism by which the variable operational requirements of naval ships can be allowed for, in attempting to satisfy the intention of the conventions. As an interim measure, some Class Societies had applied specific sections of SOLAS et al to naval ships, but with varying degrees of success. To allow a more flexible approach Lloyd’s Register had introduced with their Rules and Regulations for the Classification of Naval Ships January
2005, a set of Classification notations that paraphrased the requirements of SOLAS in the terms of ‘Goals’ and then demonstrated compliance through meeting specific clauses of the convention or the related codes, subject to it being appropriate within the operational requirements of the vessel. This approach using either SOLAS directly, or via a subset of Classification Rules while of value, only provided a limited degree of compliance and therefore had its limitations. Recognising this amongst other factors, navies such as the Royal Navy, the Royal Australian Navy, the Royal Netherlands Navy and others came to the conclusion that a navalised SOLAS would provide a more integrated and holistic solution as it would be based on generic naval practice from the start. Such an approach would also allow navies to better demonstrate that they did, in general, comply with statutory requirements as the overarching process would Naval
Commercial IMO
International Convention
ANEP 77 Naval Ship Code
Flag States
Regulation
Naval Authori es
SOLAS / MARPOL
Safety Case Classi ca on
Material State
Figure 1: Comparison of Commercial and Naval Safety Regulation
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Classi ca on
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[Feature] be similar to that applicable to commercial shipping. The commercial model is summarised as shown below, with International Conventions being developed by the International Maritime Organisation, ratified and adopted by Flag States by incorporation into their maritime laws and compliance demonstrated by surveys either carried out by the Flag State or more commonly by Classification Societies. The naval model using NATO as the equivalent to IMO and Naval Authorities as quasi Flag States. The similarities can be seen in the Figure 1. Apart from the navies involved with the ideas behind the Naval Ship Code, various Classification Societies were invited to be involved. Because of the implications of the Code, it was clear that interfaces with other marine industry bodies would be required and in time, there would need to be some process by which the Code could be maintained and updated. This resulted in the following organisations being involved with the development of the Code and the relationships between them are shown in Figure 2. NATO SD CG
Navies
ANEP 77: NSC
NSCA
INSA
Classi ca on Socie es
When the INSA Working Group for the redrafting of Chapters IV and V was set up, the opportunity was taken to develop the idea of a Goal Based Regulatory environment by ensuring that the requirements had no prescriptive solutions stated in the Code itself, unless it was collectively agreed that this was the only acceptable solution. Instead the guidance provided to the Code would direct designers to consider the selection of an appropriate standard that addressed the goal, but also took account of the operational culture of the navy and the geographical environment in which the vessel would operate. As this needs a degree of expertise in acceptable alternatives, this creates a need for the Naval Authority to maintain deep knowledge of alternative standards and to be willing to advise at an early stage of the project what may be appropriate. In addition, as verification would need confirmation through an independent organisation, they would need to be selected at an early stage so that they would be familiar with the issues related to integration of the various standards to be adopted. This is shown in Figure 3 which shows how these impact on the selection of standards when being used to satisfy Naval Ship Code ‘Goals’. The process of matching the solution to the goal is then termed ‘Validation’.
NSC Goals
Figure 2: Organisations involved with the Development of the Naval Ship Code
Objectives to Meet Goals
Organisations include: • NATO Maritime Capability Group 6 (was NATO MCG/6) • International Naval Safety Association (the Association established to maintain the NSC) • Naval Ship Classification Association
Validation
There has been much comment over the value of a ‘Goal Based’ approach to safety management, but in reality there is little experience in how this works in practice. Whilst it is relatively simple to identify a potentially applicable prescriptive standard to address a particular requirement, ensuring that it is fully compatible can be quite complex. For example the strength of a vessel could be assured through the application of Classification Rules, but which ones, those for Bulk Carriers, high speed ferries, or even Inland Waterway Craft. Even with a close matching some details may be inappropriate, for example even Class Rules for High Speed Craft assume that the Master will slow down in heavy weather, or at least seek a different course to minimise motions. For a naval ship this may not be appropriate. Hence a way of linking need to solution is an important facet of the Naval Ship Code. 28 | Implications of NATO Naval Ship Code.indd 28
Standards Used for Verification
Figure 3: Effect of Culture and Environment on Selection of Standards within the Naval Ship Code
This approach has been proven to work as it was applied to projects such as the UK’s Queen Elizabeth Class Aircraft Carrier; the RAN Canberra Class Landing Helicopter Dock; and the UK MARS Fleet Tanker projects amongst others. This approach can best be understood by the concept of using a library to assemble a set of documents as shown in Figure 4. The approach then is to select from the whole library a set of standards that are appropriate, integrated in a suitable regulatory process and supported by various guides and tools.
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[Feature] SUMMARY The gradual adoption by navies of the commercial classification model has exposed the need to implement a parallel safety regulation system. This has brought with it a much deeper and more thorough understanding of the dichotomy between commercial and naval safety objectives. Now that this is better understood and elucidated by the Naval Ship Code, the underlying philosophical objectives of being able to provide a place of work for our naval crews that is at least as ‘safe’ as that would be required for a merchant ship, whilst not compromising the imperative of being able to subjugate their own safety for that of others is more clearly defined. Figure 4: Standards as a Bookshelf
This development of the philosophy of using a Goal Based approach has exposed one significant learning point in that whilst one can have a Goal Based Regulatory environment this requires some prescriptive technical standard to show achievement. This would suggest that the term ‘Goal Based Standard’ is unrealistic unless it is supported with a clear concept of operations with which the standard has been applied. However, in order to deliver this, there is a significant amount of work to do as the understanding of why the Naval Ship Code is both necessary and appropriate. This now needs to be promulgated throughout naval organisations. In addition, each navy will need to establish a ‘Naval Authority’ to oversee the requirements and to provide a number of other functions. These can generally be summarised as: • Issue certification to ships confirming compliance with the Naval Ship Code • Maintain knowledge of appropriate verification standards to meet the goals of the NSC • Maintain knowledge of own navy’s specific requirements where these are not dealt with by either the NSC or other publicly available standards • Appoint Recognised Organisations to undertake verification activities on behalf of the Naval Authority • Monitor activity of the appointed RO’s through periodic audit • Facilitate the feed back of experience from certification activities to the appropriate standard ‘owner’ These aspects are covered within the Code itself, both in Chapter 1 which describes some of the inherent assumptions, plus the Annex provides more detail of the origin of the Functional Objectives and Performance Requirements (the Goals of the Code). Extensive notes are also used throughout the Code to highlight areas where more detailed consultation may be necessary.
With this understanding now comes the responsibility for Naval Safety Management systems as represented by an effective Naval Authority, to take that role on and provide a ‘safe’ place of work, without limiting operational capabilities. In discharging this responsibility, the tasks that need to be undertaken can now be defined. The need to have a deep understanding of how technical standards are used in the maritime environment to demonstrate an acceptable level of safety, mean that naval authorities will be required to develop a wide spectrum of support competences, both internally and externally if the objectives are to be fully realised. Some must be developed internally and will require changes to any policy of externalising expertise, but some can certainly be subcontracted. Where external support is adopted, then the relationships necessary will take time to develop. The mutual trust that exists between Flag States and Class Societies has been created by a very open and honest stance from both parties. This will need to be replicated such that vessel operators do not see either Naval Authority or Class Society as a barrier to be overcome, but as a facilitator for them to be able to provide and demonstrate that they are providing safe places of work. When this is in place we will then have a demonstrable naval safety management system that is properly ‘ship centric’ in its delivery.
References: 1. International 2. International 3. International 4. International 5. International
Convention for the Safety of Life at Sea Convention for the Prevention of Marine Pollution Labour Conference Conventions Regulations for Preventing Collisions at Sea Convention on Load Lines
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[Feature]
BS 6349-3:2013: Cost-Effective Shipyard Design Shipyard facilities are expensive and have to be cost-effective. Help is available for both shipyard operators and designers to achieve better investment value in the maritime facility developments of shipyards. The recently published British Standard covering shipyard design has been expanded and completely restructured to assist designers around the world deliver more cost-effective solutions. Good shipyard design should achieve both the required operational parameters incorporating the state-of-the-art technology and be
Adrian Arnold
Global Technical Director Shipyards, Royal HaskoningDHV E: adrian.arnold@rhdhv.com
T
he full title of the BSI publication is “BS 63493:2013 Maritime Works – Part 3: Code of Practice for the Design of Shipyards and Sea Locks.” Probably many shipyard engineers, both operators and designers, around the world are unaware of its existence, a design standard, which can help them reduce investment costs in shipyard facilities. First published in 1988 by BSI, this British Standard was written to help designers of some specific shipyard facilities such as dry docks. Now, 25 years later expanded to cover all key shipyard maritime facilities, the overall philosophy adopted during the drafting of this first revision has been to target a code of practice for design, which delivers good value for necessary investment. The approach adopted is to set out a process, which gives the designers the full breadth of information and background to the purpose of the design they are undertaking within the various disciplines required for complex shipyard operation facilities.
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efficient in terms of capital costs, maintenance costs and construction time. These end product focussed criteria are a common thread running through the new BS 6349-3:2013. It addresses the common problem, which designers encounter of not having sufficient information to deliver a fully cost-effective solution and good investment value.
The revision of BS 6349-3:2013 is part of a general overhaul of the whole suite of parts, which make up BS 6349 Maritime Works covering all aspects of maritime engineering design. Focus on Cost-Effective Design Good shipyard design should achieve both the required operational parameters incorporating the state-of-theart technology and be efficient in terms of capital costs, maintenance costs and construction time. These end product focussed criteria are a common thread running through the new BS 6349-3:2013. BS 6349-3:2013 addresses the common problem, which designers encounter of not having sufficient information to deliver a fully cost-effective solution and good investment value. There are two fundamental questions, which have to be answered at the overall shipyard facilities layout design level and the individual facility design level. These are:
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[Feature]
The derivation of the Basis of Design is an iterative process through which the target throughput of ships is optimised in conjunction with the cost of the facilities required to support the throughput. Maritime facilities are inherently expensive and it is important to ensure that their parameters are matched to their required purpose.
Q1 - What extent and size of facilities are actually required? Q2 - What is the real cost of developing the facilities?
• Operational equipment - eg cranes, pumps, entrance gate winch, capstans, hauling-in winches
The first question can be answered by thorough planning of the facilities to ensure that they will be operationally efficient and at the same time not over-specified incurring unnecessary development costs. Achieving the balance of these two sometimes competing requirements is addressed in the revised BS 6349-3:2013 by adopting a common structure to all eleven of the design sections within the document. This structure is intended to ensure that the operational parameters are firmly established so that the designer can add value to the design process. Through innovative thinking about the opportunities and constraints, the designer can proactively optimise the operational parameters. A parameter, such as dry dock depth, might be readily increased at little or no extra cost where the site’s ground conditions are favourable. Conversely some parameters might be financially onerous and the operator should be made aware of this to assess if a reduction in a parameter, such as specified quay loading, can be accepted without major impact on operational capability.
• Mechanical and electrical systems - eg fire mains, ballast water, 50Hz and 60 Hz electrical supplies, industrial gases
Each section of BS 6349-3:2013 has common subsections with each focussed on answering a simple question: 1. Operational Parameters - “What is it for?” 2. Siting - “Where is it best located?” 3. Structural Elements – “How should the civil works be designed?” 4. Equipment – “What equipment is needed to make it work?” The question of the real cost can only be answered by making sure that both the full list of items is identified within a cost estimate and then real project cost data is applied to each item. The revised BS 6349-3:2013 defines the facility boundaries in the shipyard layout within which all cost items are captured. The main cost item headings within each facility are: • Maritime structures - eg dry dock walls, floor and entrance works, entrance gate, pumphouse
Clear Basis of Design The Basis of Design, clearly defining and covering all aspects, which affect the design, is fundamental to achieving good investment value. The benefit of data feedback from similar projects cannot be overstated. This feedback covers both the construction costs and the subsequent operational efficiency achieved in real shipyards. The Basis of Design will help the designer in conjunction with the facilities owner to achieve economies of scale across all facilities, economies through common elements during subsequent maintenance, economy of future facility extension and the incorporation of state-ofthe-art technology. There are at least two levels of the Basis of Design. At the overall Shipyard Level the Basis of Design should capture all the site wide parameters. The derivation of the Basis of Design is an iterative process through which the target throughput of ships is optimised in conjunction with the cost of the facilities required to support the throughput. Maritime facilities are inherently expensive and it is important to ensure that their parameters are matched to their required purpose. The process of deriving the optimum high level Basis of Design is equally applicable to entirely new shipyards and upgrading or expansion of existing facilities. The following diagram summarises the Basis of Design derivation process. Sitting below the Shipyard Level Basis of Design is the Facility Level Basis of Design. At facility level the scope is specific to that particular facility and is kept in alignment with the other facility Basis of Design documents by the higher Shipyard Level Basis of Design. The scope of the facility level is all design disciplines required for February - March 2014 |
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[Feature]
Shipyard Basis of Design Derivation Process – courtesy of BSI
that facility and within the facility boundary as defined within the Shipyard Layout. The clearly defined common boundary for all disciplines within a facility helps to avoid gaps and overlaps in the design. The disciplines at facility level will include maritime structures, mechanical and electrical services, operational equipment and control systems.
As part of the overhaul of the suite of BS6349 parts, there has been a very helpful rationalisation for designers in terms of common recommendations across the various parts. The common recommendations such as geotechnical investigations are now all to be found in BS 6349-1 which in turn is subdivided into four parts for ease of use, due to its size.
Changes in BS 6349-3:2013 & New Sections
A significant change from the 1988 to the 2013 publication of BS 6349-3 is in the style of the wording. It is a requirement for all main text to be written in the style of recommendations and feedbacks getting from the previous experiment. Helpful information, which is not a direct recommendation, must be in the form of comments or notes.
The original edition, BS 6349-3:1988, was 74-page long and the scope was the design of five specific shipyard facilities: • Dry docks • Locks • Slipways and shipbuilding berths • Shiplifts • Dock and Lock gates The revised BS 6349 Part 3 has been expanded to over 120 pages and now covers all major shipyard maritime facilities. The original five sections have been joined by six new sections. The full list of sections is: • Shipyard layout – NEW • Dry docks - updated • Shipyard piers and quays – NEW • Slipways and shipbuilding berths - updated • Shiplift facilities - updated • Floating docks – NEW • Sea locks - updated • Hydrolifts – NEW • Dock and lock gates - updated • Piped services and electrical distribution systems – NEW • Control systems – NEW 32 | Cost-Effective Shipyard Design.indd 32
The new sections of the revised BS 6349-3:2013 are in brief as follows: Shipyard Layouts Written to deliver state-of-the-art shipyard facilities based on: • Researched optimum position in the market • Defined ship product mix throughput • Latest available technology • Appropriate level of applied state-of-the-art technology commensurate with available labour skills • Throughput capacity benchmarked against competitors Regional International Shipyard Piers and Quays The structural design of piers and quays is covered by BS 6349 Part 2 2010. This section of BS 6349-3:2013
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[Feature]
Mechanical Piped and Electrical Services – courtesy of BSI
focusses on the particular functional requirements for shipyards, principally: • Broad range of ship types and sizes • Mechanical and electrical services • Personnel access to ships • Cranage Floating Docks Floating docks are generally proprietary designs, which were covered in the now out of date BS 6349-6. This section covers the whole subject of floating docks facilities: • Floating dock types and their implications for the shipyard designer • Moorings • Dock pit • Pedestrian and vehicular access • Support services Hydrolifts The Hydrolift concept is rarely adopted, possibly due its absence from main-stream design guides. This has now been rectified for improving the shipyard design. Due to its relatively simple in principle and easy mode of using, it can prove to be a ver y flexible and efficient method of launching and retrieving ships in a effective manner. This section covers: • Principles of operation • Key considerations which differ from locks and dry dock structures • Entrance gate • Entrance works • Impounding basin • Landward gate
Piped Services and Electrical Distribution Systems Mechanical and electrical services in shipyards are fundamental to all operations. This section covers the design considerations of the distribution of these services between the facility boundaries and their spatial requirements, which impact the maritime structures. The following diagram shows the scope of the distribution being between the facility boundaries and the source/destination. Control Systems Technological advances in instrumented control of shipyard equipment affects the design of each facility: • Benefits are: – Reducing health and safety risks during operation of the facilities – Increasing operational reliability and speed up operations – Reducing consumption of power and other utilities improving the environmental performance of the shipyard • Scope of system levels to be determined: – Automation – Redundancy – Reliability – Availability – Safety Conclusion BS 6349-3:2013 fills a void in cost-effective shipyard planning and delivers a process. For many years to come, it will help shipyard operators and designers to optimise the investment in the expensive facilities required in modern efficient shipyards. February - March 2014 |
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| 33 3/27/2014 4:53:13 PM
[Feature]
Electrically Powered RTGs Catching on Worldwide Several thousands of tons of CO2 have been saved in ports worldwide in recent years. This has been achieved primarily by the conversion of the indispensable rubber-tired gantry cranes (RTGs) from diesel to electric power. For years, cranes have been a major cost driver and a burden on the CO2 balance for port operators. They often represent half of the total fuel consumption of a port and have a significant environmental impact. New RTGs are, therefore, often fully electrically powered and equipped with the associated technologies during manufacturing. Conductix-Wampfler has several solution variants for RTG electrification both for the conversion of diesel-powered RTGs as well as for installation in new E-RTGs on the market. “Drive-In L” technology even comes entirely without pneumatic or hydraulic components.
The current-collector trolley automatically connects into the guide rails of the steel structure and the current collectors are securely guided into the conductor rails when the RTG crane drives into a lane. This drive-in solution saves time and energy, thus increasing the efficiency of a terminal while also reducing the environmental impact.
A
ccording to Claus Burger, Global Market Manager Container Handling, Conductix-Wampfler, the conversion of RTGs from diesel to electric power results in savings of up to 95 per cent of diesel consumption. During normal operation, E-RTGs no longer need the diesel engine, only using it when driving from one container lane to the next or into the maintenance area. This pays off, says Burger: “If you compare diesel costs to the projected electricity costs for RTGs opposite, the savings that can be achieved by conversion become obvious. The conversion costs pay for themselves after a short time.” In addition, avoiding diesel operations reduces maintenance and operating costs by up to 70 per cent and the CO 2 emissions and noise pollution in the port area decrease. There have been enough arguments to have caused a reevaluation. Today, not only older RTGs are being converted worldwide, but also new cranes are also being designed from the outset with the appropriate components for an E-RTG system. But which technologies are the most appropriate for which requirements? Different Solutions for Each Individual Application Area
Claus Burger
Global Market Manager Container Handling Conductix-Wampfler
34 | E-RTG_Editorial.indd 34
Conductix-Wampfler offers various systems for the electrification of RTGs for terminal operators. For example, electrification can be done using motor driven cable reels or via conductor rails with plug-in or drive-in systems. With drive-in systems the connection between the RTG and the conductor rail is established automatically, doing away with the manual plugging and unplugging of plug-in systems. The Drive-In L (linear) system is a fully electrically powered system without any pneumatic or hydraulic components.
| February - March 2014 3/27/2014 4:56:36 PM
[Feature] interchangeable electrical and mechanical components. On the other hand, terminal operators can take advantage of a permanently controlled motor driven cable-reel system with several control units, either in the form of hardware with pre-programmed sequences or a software program that can be integrated into existing PLC controls. In such cases, built-in video cameras and optical sensors control the movements of the RTG.
The compact “Drive-In L” system is the lightest on the market and suitable for any RTG range.
“Conductix-Wampfler systems cover both low- and medium-voltage applications,” says Burger. A glass-fiber core and transmitter can be integrated into the drum or cable. “One or more container blocks in the same lane can be supplied with the same motor driven cable-reel system,” adds Burger. Conductor Rail Systems The conductor rails are attached to a steel structure set on a concrete base. Depending on the port operator, this can be floor-mounted or embedded in the terminal floor. The conductor rail can be installed at different heights, which increases flexibility. The electrical energy is taken from the conductor rails by a current-collector trolley that moves back and forth along the steel structure. A cable with a plug connector provides a direct connection between the current-collector trolley and the RTG. “As safety aspects play a crucial role in ports, we use guided contacts that ensure that the power supply at the plug is interrupted when the connection is not activated,” says Burger. Two connectors are mounted on the RTG, one on each side, to guarantee the required flexibility of the RTG. Limit switches are installed on the current-collector trolley to prevent the crane from leaving the block in electric mode. Drive-In System Extension for Container Cranes
The electrification of rubber-tired gantry cranes (RTGs) is an environmentally friendly approach that could save millions of dollars and tons of CO2 worldwide.
Electrification with Motor Driven Cable Reels A motor-driven cable reel is installed to provide an RTG with electrical power. “Since each RTG is a different system and acts independently, Conductix-Wampfler offers basically two technical solutions,” says Burger. Both applications are precisely tailored to the individual processes in the ports where they are used. On one hand, Conductix-Wampfler provides modular motor driven cable reels with a permanent magnetic coupler, which are plug-&-play systems consisting of
In the case of the plug-in solution with conductor rails, the RTG has to be unplugged and then plugged in when moving between container lanes. Conversion to an E-RTG with the drive-in system makes this manual step obsolete, because the Conductix-Wampfler system extension dispenses with the manual plugging-in of the RTG to the currentcollector trolley of the conductor-rail system. Instead, the current-collector trolley automatically connects into the guide rails of the steel structure and the current collectors are securely guided into the conductor rails when the RTG crane drives into a lane. This drive-in solution saves time and energy, thus increasing the efficiency of a terminal while also reducing the environmental impact. The drive-in system is already tried and tested in use: since 2009, E-RTGs fitted with drive-in equipment have been plying the 32 container aisles of the Shekou Container Terminal in China. “With the electrification of RTGs we wanted to fulfill our responsibility to the environment,” stresses David Wan, Deputy General Manager & COO February - March 2014 |
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| 35 3/27/2014 4:56:37 PM
[Feature]
The advantages of electrically powered RTGs are obvious. We therefore assume that in the future diesel-powered cranes will only be used in the future where an electrical power supply is not technically feasible,” says Burger with states convincingly. With the innovative Drive-In
L
system,
Conductix-Wampfler
has paved the way and emphasized its own pioneering role in this future market.
of the Shekou Container Terminal. But that’s not all: the port facility regularly experiences high wind speeds. “It is not unusual for us to have eight typhoons in a year,” says Wan. This is why the Chinese were looking for a solution that not only saves fuel and CO 2, but that also reduces the number of hazardous tasks for employees, such as those related to energized cables.
guarantees the compensation of tolerances caused by driving the RTG into the container block, or by raising and lowering it. The sequence with “Drive-In L” is fully automatic and is controlled exclusively from the cabin of the RTG. This means that ground personnel are no longer required when moving between blocks, which has the advantage of making work in the terminal safer.
The new Drive-In L Solution
Potential for Future
Conductix-Wampfler has further optimised the drive-in solution in the meantime since its first installation in 2009. The new Drive-In L system has an extremely compact design, requiring absolutely no pneumatic or hydraulic components and is currently the lightest on the market. This means it can be used with any RTG type, even with those, which have where there is little room for additional components. The first RTGs equipped with Drive-In L are being used in the United States, among other places. In Savannah, Georgia, this technology feeds four RTGs at the Garden City Terminal over lengths of 165 meters each.
Conductix-Wampfler recently undertook several major orders for the electrification of RTGs in China, Turkey, USA, India, Columbia, Togo and Ecuador. There are now more than 1200 Conductix-Wampfler E-RTG systems in use worldwide. The demand for drive-in conversion kits has also increased significantly in Europe. As the demand for E-RTG technologies increases, the costs for terminal operators and the overall environmental impact are both decreasing. Thanks to E-RTG technology, there have been worldwide savings of more than 71 million Euros, and more than 51 million kg of CO 2 emissions have been prevented.
With its compact design, the Drive-In L solution can easily be fitted to both sides of the RTG, regardless of the position of a diesel engine or generator, which currently makes it the most flexible solution of its kind on the market. The time it takes for the RTG to drive in or out of the Drive-In L system is less than 20 seconds. A short entry zone also makes it possible to operate the RTG electrically right from the first row. In addition, it 36 | E-RTG_Editorial.indd 36
“The advantages of electrically powered RTGs are obvious. We therefore assume that in the future diesel-powered cranes will only be used in the future where an electrical power supply is not technically feasible,” says Burger with states convincingly. With the innovative Drive-In L system, Conductix-Wampfler has paved the way and emphasized its own pioneering role in this future market.
| February - March 2014 3/27/2014 4:56:38 PM
[Feature]
Freight Watch – January to February 2014
Note: *Market in “oversupply” mode when reading is excceds 1, vice-a-versa when below 1. Source: Bloomberg
The VLCC rates over the past two months moved in both directions driven by a mixture of fundamental and seasonal factors. On one hand, an oversupplied vessels market created downward pressure on the freight rates; on the other hand, an increase in oil production in Middle East region created expectation of an increase in vessels requirement. However, concern of an oversupplied vessels market prevailed pushing the freight rates lower on route TD3 in January to February 2014.
C Authors: Nazir Ahmed Moulvi
Senior Analyst, Department of Research & Strategy, Multi-commodity exchange of India Ltd E: nazir.moulvi@mcxindia.com
Niteen M Jain
Senior Analyst, Department of Research & Strategy, Multi-commodity exchange of India Ltd E: niteen.jain@mcxindia.com
ontinuing the uptrend momentum of past two months, daily charter index for VLCCs on route TD3 (from Ras Tanura, Saudi Arabia, the world’s biggest oil-export site to Chiba, Japan), opened the month of January 2014 at 60 Worldscale (WS), up by 4.3 per cent from previous month’s close. The strong opening was on reports that 80 VLCCs were sailing towards Asian country’s ports — the most since Bloomberg started compiling weekly snapshots from IHS Maritime data in October 2011. The increased sailings to Asia was also coincided with drop in oversupply of the vessels to just 10 per cent compared with 18 per cent in the mid of December last year. (Route TD3 is one of the world’s busiest oil route and industry benchmark. Worldscale points are a percentage of a nominal rate, or the flat rate, for more than 3,20,000 specific routes. Flat rates for every voyage, quoted in US dollars a 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.) The tide soon turned negative for freight market, as vessel owners who had purposefully idled their vessels due to February - March 2014 |
Freight Watch.indd 37
| 37 3/27/2014 4:58:50 PM
[Feature] Shipping Capacity Statistics Particular
Feb-14
Jan-14
MoM % Change
Feb-13
YoY % Change
No of Ships in service
2,296
2,302
-0.3%
2,300.00
-0.2%
DWT Weight in ‘000 tonnes’
372,920
373,457
-0.1%
371,123
0.5%
No of new ship orders
191
182
4.9%
128.00
49.2%
No of ships under construction
40
36
11.1%
42.00
-4.8%
Order book as DWT %
12.48
11.56
8.0%
10.75
16.1%
No of Ships broken
1
12
-91.7%
8
-87.5%
No. of VLCCs sailing with cargo
445
445
0.0%
423.00
5.2%
No. of VLCCs anchored
124
141
-12.1%
141.00
-12.1%
Avg. speed of VLCCs in knots (Excl. Anchored) 8.88
9.58
-7.3%
9.4
-5.5%
Persian Gulf VLCCs Supply vs. Demand
1.17
1.21
-3.3%
1.20
-2.5%
Global
93,543
78,563
19.1%
108,262
-13.6%
Middle East Gulf
31,053
19,826
56.6%
35,888
-13.5%
India
1,014
748
35.6%
631
60.6%
Oil - floating storage (1000 barrels)
Source: Bloomberg
low freight rates, re-entered the market to lock the higher prices. As the oversupply began to increase, the charter rates began their southwards journey. The steady decline of freight rates on route TD3 was arrested on the news that the European Union (EU) was working on suspending a ban on reinsuring tankers hauling Iranian oil. This embargo led to around 60 per cent decline in country’s exports (from 2.5 million barrels per day (bpd) to around 1 million bpd). The measure affects most of the world fleet, because 90 per cent of all merchant vessels are covered by members of the London-based International Group of P&I Clubs, according to Bloomberg. EU’s ban hindered shipments to countries including India, as the country was finding difficult to obtain reinsurance for shipments. Additionally, the uptrend in freight rates was also supported by news of increase in crude oil production in the Middle East region from Saudi Arabia to Libya, which necessarily increases the demand for transportation. Increase in production increased the ton-mile demand for vessels. As a result, the freight rates on route TD3 touched the period’s high of 70WS points on January 22, 2014. An increase in the freight rates was greeted with increase in vessels supply, in turn pushing the freight rates lower. Further, downtrend in the VLCC shipping rates were also seen after McQuilling — a private ship broker mentioned in its report that “our quantitative analysis shows that fundamentals are unbalanced as overcapacity remains present and crude tanker demand to rise 0.8 per cent a year vs 2 per cent fleet growth in 2014-2018”. Additionally, slowing demand from China, the world’s largest importer of crude oil in view of their markets closing for a week long 38 | Freight Watch.indd 38
holiday to celebrate Lunar New Year pushed the VLCC rates to a period low of 37.5 WS points on February 3, 2014. The same day the daily earnings by the VLCCs also declined to period’s low of USD 16,171.83 per day. Once the Chinese buyers returned to the market the demand for booking cargoes resurfaced, reviving the charter market. Projections by IEA of an increase in World crude oil consumption by 1.4 per cent or by 1.3 million bpd to 92.5 million bpd also helped in improving the overall sentiment. In the backdrop of benign improvement in global economic growth prospects and an increase in oil consumption, many shipping analysts revised their expected average freight rates upwards for 2014, providing psychological support to the fragile VLCCs market. The uptrend in the VLCC market again paused and began to falter by the end of February amidst concerns of slowing growth in China and its impact of petroleum consumption. China’s demand for diesel grew at the slowest pace in more than four years, amidst contraction in manufacturing and increasing share of services sector. “If contribution from tertiary industries to GDP rises by 1 percentage point while secondary industries drops by 1 percentage point, diesel demand will be cut by around 10 million tons a year,” according to Dai Jiaquan, a Director at China National Petroleum Corp.’s Economic and Technology Research Institute, quoted in Bloomberg, depicted the demand concerns from China. Overall during January-February 2014, freight rates declined by 13.04 per cent to close the two-month period at 50 WS points.
| February - March 2014 3/27/2014 4:58:51 PM
[MARKETING INITIATIVE]
Best Maritime Institute in Asia
B P Marine Academy, Belapur Campus
S
tarting in 1998, B P Marine Academy has, today, put its indelible mark on the world of shipping industry. Started by R C Singh and some other likeminded people, the Academy today boasts of state-of –the-art teaching aids like DPLP projectors, smart interactive boards, biometric attendance systems, Wi-Fi campus, Computer lab and practical demonstration equipment. CBD Belapur Campus: B P Marine Academy (BPMA) Belapur Campus (Head office) is located in the Central Business District of Belapur, Navi Mumbai spread over an area of 1, 15,000 square feet of its own. It is two minute walking distance from Belapur Railway Station, bus and hovercraft terminals. The Panvel Campus is cradled in the arms of Mother Nature characterised by scenic beauty mountains in the backdrop and 1000 meter waterfront with stunning view of the ocean. The Academy resembles a cruise liner on a land. The academic block, hostel block are designed keeping in mind that each room resembles a cabin. There are more than 300 murals, which depict
the history of merchant navy thus motivating students. B P Marine Academy has received award for ‘Best Infrastructure among Marine Institution in India’ for the year 2011-2012 by big Brands Academy. B P Marine Academy has also received ‘Education Excellence Awards 2013’ for being the ‘Asia’s Best Marine Institute’ by ET NOW. In March 2014 the maritime institute has received Certificate of International Accreditation by International Accreditation Organisation (IAO) for Lifetime for achieving the highest standards in organisational management, business management and business performance through a commitment to quality and continuous improvement. Badal Singh is the elder son of R C Singh. He has joined the new world of shipping industry with the values enshrined by his father. In BP Marine Academy, B Stands for Badal and now he is already a captain taking over the command February - March 2014 |
BP marine.indd 39
| 39 3/27/2014 5:00:42 PM
[MARKETING INITIATIVE]
B P Marine Academy, Panvel Campus
from his father. As a part of corporate social responsibility, the management of the academy, since its inception has contributed an amount of ` 15 crore annually towards the education and training at various levels to the needy students. The academy is proud to be located in Mumbai, the financial capital of the country. It has reserved 50 per cent seats for students of Maharashtra to promote the shipping careers in the region. The institute not only boasts of excellent infrastructure but also excellent faculty of qualified and devoted marine engineers, navigators, academy and staff. It has Quality System Certification ISO 900:2008 from American Bureau of shipping Industrial Verification Inc and has also been rated as an ‘Outstanding Institute’ by CRISIL. The Academy was started with the compensation money which Singh received with an objective of providing the best training to seafarers especially related to safety. Singh is very passionate about it and tries to imbibe in students the motto of ‘Safety First’ and always tells students to avoid mistakes and errors he had made during his active shipping career. 40 | BP marine.indd 40
The academy is entering into a high growth zone by launching the Phase-II at Panvel Campus and Singh wishes to offer courses from K.G. to P.G. in the same campus. There are many projects in 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 for the above activities In short span of 15 year 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 Singh’s commitment towards the shipping industry and under his vision and able guidance the second generation of the family, Capt. Badal Singh has taken the mantle and onus to enhance the academy by taking over management of both the campuses. R C Singh has received Sant Tulsidas Krit ‘Ram Charitra Manas Award’ from All India Port Labour Association by the hands of P A Sangma.
| February - March 2014 3/27/2014 5:00:43 PM
Discovering 152-year-old Shipwreck
[MARINE ARCHAEOLOGY]
152 year old shipwreck
T
he wreckage of a wooden steamship that sank 152 years ago in a storm on Lake Huron with no survivors has been found, a Michigan explorer said. What exactly happened to the Keystone State and its 33 occupants in a November 1861 voyage to Milwaukee from Detroit remains a mystery, said David Trotter, who found the wreck with his crew of explorers in the recent past. The 288-foot side-wheel steam ship hit rough weather and was last seen in a disabled condition off Port Austin on November 8 or 9 in 1861, Trotter said. “She literally sailed into oblivion. Nobody heard anything from her,” Trotter said in a telephone interview. The wreck was found in 175 feet of water 30 miles northeast of Harrisville, a small city north of Lansing. The location put the wreck about 50 miles off course. Trotter, 72, who lives in the Detroit suburb of Canton, Michigan, has found more than 100 shipwrecks on the Great Lakes over the last four decades. In 2012, Trotter
and his crew discovered the New York, a 283-foot steamer that also sank in Lake Huron in 1910.“It’s a great chance to touch history to swim back into time,” Trotter said of why he searches for shipwrecks. The Keystone State is one of more than 5,000 shipwrecks on the Great Lakes. The ship typically moved immigrants to the west and cargo east, according to Trotter. But on its last voyage, it was reported that the ship was carrying farm equipment, odd cargo given the time of the year, he said. The ship left in hurry with no lifeboats aboard, he added. “That adds to the mystery of her leaving,” Trotter said. Trotter said legend has it that the ship may instead have been carrying equipment for the Civil War or gold bullion - though he said he has not found military equipment or gold on the wreck. (Source: Reuters)
February - March 2014 | 152-year-old shipwreck found supriya.indd 41
| 41 4/2/2014 3:17:13 PM
[NEWS: INDIA]
Rakesh Mohan Panel Recommends Port Reforms New Delhi: The trusts that run the dozen ports that are owned by the Union Government should be transformed into landlord port authorities and their terminal operations converted into public sector corporations, the National Transport Development Policy Committee has recommended in its report submitted to Prime Minister Manmohan Singh. The 21-member panel, headed by former Reserve Bank Deputy Governor Rakesh Mohan, also recommended market pricing of port services at these ports besides the setting up of 4-6 mega ports—2-3 on each coast—over the next 20 years as part of a national strategy for the ports sector. The report’s recommendations are by far the strongest endorsement of free pricing of port services at Union Government ports. “Incremental improvements, while retaining the essence of the current centralised structure, will not yield the desired benefits. The path recommended for major ports is of corporatisation and decentralisation,” the report said. To implement a strategic institutional shift to a landlord port model, the panel recommended a threestep approach. First, transform the current port trusts into publicly-owned statutory landlord port authorities through a new law to impart functional and financial autonomy. Second, unbundle all major ports owned by the Union Government and corporatise terminal operations of these port trusts as public sector corporations. Third, these corporatised public sector terminal operators could potentially be disinvested,
listed and possibly privatised at a later stage. The port authorities could be corporatised as a statutory authority by a separate act and not through the Companies Act, the panel said. The maritime states should be encouraged to have substantial shareholding in them to ensure their participation in the development of the ports. The direct participation of the maritime states would need to be facilitated through corporatisation, it said. The Major Port Trusts Act should be replaced by a new Major Ports Authority Act that would allow the trusts to become landlord port authorities and enable them to function on the basis of commercial principles—subject to the rigour and discipline of financial and capital markets—pushing them to be more efficient. The Indian Ports Act can be modernised to introduce the creation of a Maritime Authority for Ports vested with powers to regulate intra-port and inter-port competition as well as port conservancy across in India. Based on the assessed levels of competition between ports and between similar cargo handling terminals in a region, tariff determination should be left to market forces, the panel said. Tariff regulation by exception rather than by rule should be the operating principle and the role of the Tariff Authority for Major Ports (TAMP) should be transformed to limiting abuses of competition and (made) applicable to all commercial ports in the country. At the state level, a regulatory agency should also be set up to exercise oversight on non-major ports in that state.
P C Parida, New Chairman of New Mangalore Port Trust Mangalore: P C Parida has been appointed as the Chairman of New Mangalore Port Trust (NMPT) by the Ministry of Shipping. He took charge on March 15. Prior to his present assignment he was working as Deputy Chairman, Chennai Port Trust from P C Parida, January, 2011. He also worked as Deputy Chairman, Chairman, NMPT Mormugao Port Trust from November, 2008 to December, 2010, FA & CAO of Chennai Port from September, 2001 to October 2008, and FA & CAO of V O Chidambaranar Port Trust from August 1996 to September 2001. During his tenure in different Ports, he was associated with many projects such as privatisation of first container terminal at VO Chidambaranar Port, first and second container terminal at Chennai Port, privatization of coal terminal at Mormugao Port etc. He was also associated in merger of cargo handling pool at Tuticorin with VOC Port and Chennai Dock Labour Board with Chennai Port.
42 | India News 44-50 supriya.indd 42
George is Deputy Chairman of Mormugao Port Kochi: Cyril C George, Secretary, Cochin Port Trust has been appointed as the Deputy Chairman of the Mormugao Port Trust. George started his career in the shipping sector as a Labour Officer with Kandla Port Trust in 1987. He also served as the Deputy Chairman of Kandla Dock Labour Board. He became the Deputy Secretary of Kandla Port Trust in 2001 and was transferred to Cochin Port Trust as Secretary in 2003.
| February - March 2014 3/27/2014 5:10:03 PM
[NEWS: INDIA]
N N Kumar appointed as JNPT Chairman Mumbai: N N Kumar, IRS, who was posted as Deputy Chairman, Jawaharlal Nehru Port Trust, has been appointed Chairman, Jawaharlal Nehru Port Trust from February 27, 2014. Kumar joined JNPT on February 22, 2010 as Deputy Chairman & was N N Kumar, IRS Chairman-In-Charge during the period March 30, Chairman, JNPT 2010 to September 29, 2010, and also from May 16, 2013 to February 26, 2014. Kumar is a Post Graduate in Science from Patna University and has been awarded Fellowship of CSIR, Delhi. After joining Indian Revenue Service in 1984, he worked in various capacities at Kolkatta, Mumbai, Delhi, Nagpur, Agra and Aurangabad. He has headed Special Investigation Units for Tax Enforcement. He has vast experiment of Tax Administration as well as General Administration. At JN Port, under his guidance, various important projects like Fourth Container Terminal, 330 meter Container Berth, widening of roads and CSR initiatives got implemented. An additional Liquid Cargo Terminal is also at an advanced stage of tendering and Phase-I of the Channel Dredging Project is nearing completion well ahead of the completion period.
Merge Chennai, Kamarajar Ports: ChPT Chennai: The Chennai Port Trust (ChPT) has asked the Shipping Ministry to merge the Kamarajar Port at Ennore with it or bring it under ChPT’s control. This is to offset the loss of cargo to Kamarajar port and avoid unhealthy competition between the two ports. ChPT, which is a stakeholder in Kamarajar port, has also urged the Ministry to continue the business incentive for the diversion of cargo, as Kamarajar Port has not absorbed the surplus labour according to the directions of the Madras High Court. These issues were taken up at the last board meeting while discussing the financial performance of ChPT for the current fiscal, said a port trust source. An analyst said such a proposal is not possible as the Kamarajar port is a corporate entity, while the Chennai Port is under a trust. The only common thing is that both are major ports and controlled by the Shipping Ministry, he said.
Vizhinjam Port Clearance Under Scanner Chennai: The environmental clearance given to the ` 5,000-crore Vizhinjam sea port has come under the scanner of the National Green Tribunal (NGT), Southern Bench. Admitting an appeal that challenged the clearances given to the project, the Tribunal Bench directed the Union Government, the Kerala Government, the Kerala State Pollution Control Board, and Vizhinjam International Seaport Ltd to file their replies on April 25. The appeal seeks to know if there is any procedural lapse on the part of the authorities in giving clearance for the project. The Bench, comprising its judicial member Justice M Chockalingam and expert member R Nagendran, said, “The appeal raised an important question concerned with environment.” They challenged the environmental clearance and coastal regulation zone clearance for the port, to be developed in open sea by reclaiming coastal waters. The appellants said the Union Ministry of Environment and Forests had granted the environmental clearance to the project proponent without considering the deleterious effects of the proposed port.
Record Investment in Port Projects in FY 2013 New Delhi: India has secured a record ` 20,700 crore (USD3.4 billion) of investment in port projects after it deregulated tariffs. The nation has awarded bids for 30 ports in the year-ending March 31, Shipping Secretary Vishwapati Trivedi said. The value is more than three times greater than projects awarded in fiscal 2013, he said. The projects will add 217.6 million tonnes
of annual cargo-handling capacity, according to the Ministry of Shipping. The bids will ease congestion at Indian ports. “Indian port capacity woefully falls short of demand in some sectors,” said Nripesh Kumar, director at PricewaterhouseCoopers India. “Considering its growth potential, there is a great scope to expand port capacities in India,” he further added.
February - March 2014 | India News 44-50 supriya.indd 43
| 43 3/27/2014 5:10:03 PM
[NEWS: INDIA]
Allcargo’s JV with Scania
SCI Adds Hazira to SMILE Service
Mumbai: Allcargo Logistics Ltd, a part of the global conglomerate Avvashya Group, announced that they have signed an agreement with world’s leading manufacturer of heavy transport vehicles, Scania headquartered in Sweden. In this first of its kind arrangement in India’s transport and logistics space, Allcargo will be utilising the world class trailers on operating lease from Scania. With Allcargo’s leadership in integrated logistics especially Project Logistics and Equipment hiring, these state of the art trailers will result in more productivity, time savings and efficient transportation services for customers within the hinterlands of India. Allcargo is already engaged with Scania for clearing and port services and with this agreement the association has further strengthened to create a new benchmark across India’s logistics space. Allcargo presently owns and operates one of the largest owned fleet of over 1,000 equipment.
Mumbai: The SMILE service is a dedicated Shipping Corporation of India (SCI) Service having 3 x 1600 TEU Indian Flag vessels catering to Gulf Markets from Indian sub continent and coastal trade on the west coast of India.
Commenting on the occasion Umesh Shetty, Executive Director of Allcargo Logistics Ltd, said: “Allcargo has always endeavored to provide best in class services to customers and will always strive for innovating efficient and productive ways to make a difference to customer’s transportation requirements. This is our step to add value to our customers in making their business more efficient”.
SCI in its continuous efforts to facilitate shipping solutions to the Indian trade has now upgraded the coastal port call on the SMILE Service. The SMILE service, which already has an established Coastal market from Mundra and Pipavav to Cochin/ Tuticorin will now have a direct coastal service from Hazira to Cochin and Tuticorin. In addition to coastal trade, the service will cater to the Export Import Trade from Gulf to Hazira and from Hazira to Far East and Europe with T/P at Colombo. The call at Hazira is in the interest of SCI’s valued customers in terms of providing an efficient and reliable service for Coastal as well as Export Import Cargo. SCI also will have a double dip in Cochin to cater to the Coastal trade from Cochin to Mundra. The weekly Hazira call will commence from the mv Rajiv Gandhi SM 233E, ETA2nd April 2014 and the new port rotation will be: Colombo- CochinMundra- Jebel Ali- Mundra- Pipavav- HaziraCochin- Tuticorin- Colombo.
PSA Wins Kolkata Port Container Concession Kolkata: PSA International, through its wholly-owned subsidiary PSA Bharat Investments Pte Ltd, has won a ten-year container-handling contract at India’s Government-owned Port of Kolkata that can handle some 450,000 standard containers a year. PSA will have to invest ` 450 crore to install cranes and other container handling equipment in Kolkata Port. PSA was one of the first to enter India when the country opened its ports to private investments in the late 1990s. The firm runs a 1.5 million standard container capacity a year terminal at Chennai port and a 450,000 standard container capacity a year terminal at VO Chidambaranar port, both located on India’s eastern seaboard. The port contracts that PSA won in Kolkata and Jawaharlal Nehru Port Trust (JNPT) helped India’s shipping ministry achieve the target for awarding port contracts for the year at a time when it was struggling to attract private funds due to adverse market conditions and unfavourable Government policy framework. It also showed the confidence and belief of PSA in the potential of India’s container market despite facing many problems. PSA had for long nursed ambitions to enter JN port, which handles more than half of India’s containers shipped through its ports.
44 | India News 44-50 supriya.indd 44
NMPT Handles Largest Crude Parcel Mangalore: New Mangalore Port has handled a largest parcel size of crude oil from a very large crude carrier (VLCC) at its single point mooring (SPM) facility. A press statement by New Mangalore Port Trust (NMPT) said that the port successfully handled one VLCC at the SPM installed by Mangalore Refinery and Petrochemicals Ltd (MRPL). The VLCC, m.t. Humanity, carrying 1.63 lakh tonnes of Iranian mix crude oil called at the SPM, which is located 17 km away from shore. This is the largest parcel size of crude oil ever handled at NMPT, the statement said. The vessel has the capacity to carry up to 3 lakh tonnes of crude oil, it added.
| February - March 2014 3/27/2014 5:10:03 PM
[NEWS: INDIA]
Rise in Kochi Port’s Bunkering Sale Kochi: Kochi Port has registered a bunkering sale of about 11,000 tonnes of fuel to ships this month. This is a major increase from the average sale of 6,000 tonnes to 8,000 tonnes in the previous month, a press release said. This was an indication that shipping line now prefer Kochi more and more as a bunkering destination in comparison with competing South Asian Ports such as Colombo as the rates and quality here were lesser, the release said. HPCL, BPCL-Matrix and IOCL are the major bunker suppliers at Kochi port. The state government had earlier reduced the VAT on bunkers being sold to foreign-going vessels. This had given a big boost to bunker sales, it said. In the recent budget proposals, the state government has further proposed reduction in rate of tax of domestic bunker from 15 per cent to 4.5 per cent from this year. This will further increase the sale of bunkers to coastal vessels and promote coastal carriages of cargo. The Cochin Port Trust Board has offered rebates in vessel related charges for international vessels calling at the Cochin Port for only for taking bunkers. The Board has also offered rebates for barges employed for carrying bunkers to vessels passing through outer roads. Two oil companies viz HPCL and BPCL-Matrix have already deployed high end barges which has certification to proceed to outer roads to supply bunkers even during the monsoon period. The port was proposing to provide land at Puthuvypeen for tank farms for investors in the bunker business to promote the activity on a larger dimension.
Longest Quay Length at Dighi Port
‘Ennore Port Capacity to be Enhanced’ Chennai: Union Shipping Minister G K Vasan said the capacity of Tamil Nadu’s Ennore Port will be more than doubled with the provision of various new facilities during the 12 th Plan period (2012-2017). Inaugurating the `.51.60 crore railway siding infrastructure at the port near here, Vasan said the central government’s efforts in the port sector are largely to increase the efficiency, augment the capacity and improve connectivity. During the 12 th Plan period, Ennore Port would be taking up various projects like five million tonne per annum (MTPA) liquefied natural gas (LNG) terminal, a 16 MTPA container terminal, 2 MTPA multi-cargo terminal-2 and a MTPA additional coal berth, he said. The completion of these projects would more than double Ennore Port’s capacity from the current 30 MTPA.
Anup Nair is Director Projects, DB Schenker
Dighi Port Mumbai: Dighi Port commissioned the longest quay length by a nonmajor port in Maharashtra. Dighi Port the largest greenfield investment in the port sector in Maharashtra has commissioned the longest quay length in Maharashtra and will be further commissioning another 1100 mtrs of quay length shortly to make it the largest greenfield Port in Maharashtra with an overall capacity of 30 million tonnes with an investment of Rs 2500 crores. More importantly, the company shall be further investing approximately Rs 1500 crore in the road & rail connectivity projects thereby facilitating speedy turnaround and much better connectivity to the hinterland. Further, the recent signing of the State Support Agreement between the Maharashtra Government and the Central Government for the development of ‘Delhi Mumbai Industrial Corridor’ (DMIC) has given a necessary boost and impetus to the overall development of the port.
New Delhi: Schenker India Pvt Ltd, part of DB Schenker transport and logistics division of 39 billion Euros Deutsche Bahn Group has appointed Anup Nair as Director Projects, Schenker India Pvt Ltd. Anup will be heading the project department for Schenker India Pvt Ltd and will be reporting to Chief Operating Officer Shubhendu Das. He has got an overall experience of 19 years in Project Management in C&F/Heavy Transport and Erection Industry, Sales/Marketing, Operations and Logistics. He had completed his MBA in Marketing in 1996 and also holds Diploma in Shipping .
February - March 2014 | India News 44-50 supriya.indd 45
| 45 3/27/2014 5:10:04 PM
[NEWS: FOREIGN]
China Shipping has 2.3 bn Yuan Loss in 2013 Beijing: China Shipping Development Co Ltd saw a loss of 2.3 billion yuan (USD 371.3 million) in 2013, according to its financial report. This comes at a time when experts see the shipping industry as still facing dim prospects. China Shipping, a State-owned enterprise under China Shipping Group Co, earned revenue of 11.39 billion yuan in 2013, a 2.1 per cent year-on-year increase, but still made a loss of 2.3 billion yuan in 2013 after gaining 73.74 million yuan in 2012, according to its financial report. China Shipping attributed the loss to weak demand from major economies and oversupply in the shipping industry, according to the report. China Shipping’s major business contains oil tanker shipping and dry bulk cargo shipping. The weak oil tanker shipping demand led to lower prices, the report said, noting oil shipping price index Baltic Dirty Tanker Index (BDTI) in 2013 dropped 10.7 per cent year-on-year. But the global dry bulk cargo shipping market is better than 2012, with a 32 per cent year-on-year increase of price index Baltic Dry Index (BDI), according to the report. The global economy, which is still in the middle of a recovery, had a negative impact on the shipping industry, Qian Xinnan, Deputy Director of the China Association of the National Shipbuilding Industry, said. Wu Minghua, an independent analyst of the shipping industry, agreed with Qian, and said more than 60 per cent of shipping companies in the world are facing deficits now. China Shipping Container Lines Co Ltd, another subsidiary of China Shipping Group, filed a forecast report on January 28, predicting a 2.63 billion yuan deficit in 2013.
KR Donates Award Winning Software to WMU Korea: The Korean Register (KR) - an IACS member classification society – has announced that it has again donated its award winning KR-CON software to students at the World Maritime University (WMU). KR-CON is an international database program, which contains the full up-to-date texts of all IMO Conventions, Codes, Resolutions and Circulars in a single USB memory stick. It enables users to identify regulations relevant to a specific task and helps ensure all IMO requirements are applied correctly. KR-CON is currently being used by surveyors, port state control inspectors, shipping companies, shipyards and design houses in more than 30 countries across the world. It is available in USB format and from the KR website where all new regulations are immediately updated. The value of software donated is approximately USD 250,000 KR has been donating its software to WMU since 2012 and, this year, students and the faculty were given access to the very latest version of KR-CON from USB devices and the new mobile app which is due to be released in April. Commenting on the donation, Dr Chon Young-kee, Chairman & CEO of Korean Register said: “We are very happy to support the World Maritime University again this year and we hope that our software will be useful to the students as they continue their studies.” Neil Bellefontaine, WMU Vice President Academic, replied: “We sincerely appreciate the generosity of KR for donating its prestigious KRCON software for the third consecutive year. It will contribute greatly to the studies of our students and our faculty.” KR also donates its software to a number of other international and domestic maritime universities.
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‘Shipping Industry is Recovering from Slowdown’ London: Financing for shipping is returning following the earlier exit of several banks, especially European banks, since the post-Lehman crisis and loans to shipowners are expected to increase beyond the USD 56 billion seen in 2013, according to Standard Chartered Bank. Shipowners are seeing loan options being made available not just from the usual international banks, but also from regional banks, export credit agencies (ECAs) and even private equity funds, noted Nigel Anton, global head of shipping finance at Standard Chartered. “What we have seen in the last three years is a whole range of new financial players, very much led by Chinese banks, and on their tails you see leasing companies and ECAs in particular China and South Korea coming into the market to fill the (financing) gap. There is also a growing number of regional banks especially in Singapore, Malaysia, Abu Dhabi and Qatar, that are financing the local players,” Anton said. “And the last that we have seen over the past six to 12 months is the rise of private equity,” he pointed out. In 2007, a total of USD 94 billion was lent to shipping. After the global financial crisis, that amount fell to just USD 38 billion in 2010. By 2013, lending to shipping rebounded to USD 56 billion. “I predict that this year’s amount will be even higher,” Anton said. He added that private equity was on “no one’s radar” back in 2007. Last year, shipping received about USD 9 billion from private equity and the amount is similarly expected to increase this year.
| February - March 2014 3/27/2014 5:14:35 PM
[NEWS: FOREIGN]
Port of Antwerp to Develop Oman Port Antwerp: With the signing of the concession agreement between Consortium Antwerp Port (CAP) and the Sultanate of Oman to operate, develop and manage the Port of Duqm and its industrial land for the next 28 years, the Porf of Duqm Company reaches its second milestone. The agreement was signed in the presence of HRH Princess Astrid of Belgium. The agreement was the outcome of a granting procedure organised by the Oman Government. CAP, a joint venture between Rent A Port (RAP) and Port of Antwerp International (PAI), was granted the contract due to its track record in port development, its engineering capacity, its willingness to co-invest in Duqm port’s industrial land development and the excellent management expertise. Back in 2009, the development of the Port of Duqm was not completed and CAP controlled and supervised the final infrastructure works done by the consortium. These were finalised in 2012 and are an example of top engineering. This was the basis for the establishment of the Port of Duqm Company (PDC), a 50-50 Belgian-
Omani joint venture between CAP and the Sultanate of Oman. With this agreement PDC has the overall responsibility for the further development, management and commercialisation of the Duqm Port facilities, including the industrial land zone. As an active landlord PDC will also provide training and coaching of port employees develop global marketing initiatives and establish Duqm as a petrochemical key hub in the region with a focus on the Middle-East, Indian and West African market. CAP’s goal is to develop general port activities with special emphasis on oil and gas. The involvement of Antwerp based companies in the development of the port of Duqm will also improve the position of Antwerp as the main gateway for petrochemicals from the Middle East. The last decade Antwerp/Belgium became the leading hub for the fast growing GCC chemicals export in Europe (from 2.8 million tons in 2002 to 7.8 million tons in 2012). The market share of Antwerp increased from 10 per cent to 24 per cent.)
FORM IV Statement about ownership and other particulars about newspaper SHIPPING MARINE & PORTS WORLD to be published in the first issue every year after the last day of February 1.
Place of Publication
Mumbai
2.
Periodicity of its Publication
BI-MONTHLY
3.
Printer’s Name Nationality 1[(a) Whether a citizen of India? (b)If foreigner, the country of origin] Address
MAULIK JASUBHAI SHAH INDIAN YES NOT APPLICABLE 1100, Shanudeep, 10, Altamount Road, Mumbai 400 026
4.
Publisher’s Name Nationality 1[(a) Whether a citizen of India? (b)If foreigner, the country of origin] Address
MAULIK JASUBHAI SHAH INDIAN YES NOT APPLICABLE 1100, Shanudeep, 10, Altamount Road, Mumbai 400 026
5.
Editor’s Name Nationality 1[(a) Whether a citizen of India? (b)If foreigner, the country of origin] Address
MAULIK JASUBHAI SHAH INDIAN YES NOT APPLICABLE 1100, Shanudeep, 10, Altamount Road, Mumbai 400 026
6.
Names and Addresses of individuals who own the newspaper and partners or shareholders holding more than one per cent of the total capital
JASUBHAI MEDIA PVT LTD., 26, MAKER CHAMBERS VI, NARIMAN POINT, MUMBAI 400 021 Jasu Ramniklal Shah, Maulik Jasubhai Shah, Maulik Business Services Pvt. Ltd, (1100, Shanudeep, 10, Altamount Road, Mumbai 400 026), Jasubhai Business Services P Ltd., (26, Maker Chamber VI, Nariman Point, Mumbai 400 021
I Maulik Jasubhai Shah, hereby declare that the particulars given above are true to the best of my knowledge and belief. Date: 15th February 2014
February - March 2014 | International News.indd 47
Signature of Publisher
| 47 3/27/2014 5:14:35 PM
[MARINE TECH]
Tritech StarFish for Z-Boat 1800
T
he Oceanscience Group has unveiled the first Z-Boat 1800 remotelyoperated survey boat with integrated side scan sonar, from Tritech International. The new boat provides a shore operator with real-time high definition side scan imagery from Tritech’s StarFish 990F side scan on a portable 1.8 m surface vessel. The StarFish side scan is attached to a special skeg (keel fin) under the Z-Boat, eliminating the need for a dedicated hull mounted transducer. In addition, the compact size of the StarFish topside box means that a single or dual frequency single beam echosounder can still be accommodated on the Z-Boat.
First of its kind, the Z-Boat 1800 remotely-operated survey boat with integrated side scan sonar, provides a shore operator with real-time high definition side scan imagery from Tritech’s StarFish 990F side scan on a portable 1.8 m surface vessel.
Adrian McDonald, Oceanscience Group, Z-boat commented, “Adding side scan capability was a natural progression for our development of the Z-boat and the Tritech side scan sonar was selected owing to its small size and good shallow-water performance.”
DeepOcean Acquires Second Sea Owl ROV The new Sea Owl XTi includes the iCON intelligent control architecture, has double the payload, is powered by seven thrusters, and is depth rated to 2000 meters from the earlier 500.
O
ffshore service provider, DeepOcean, has taken its option to buy a second of the new concept Sea Owl ROVs for work in the Norwegian fields. Meanwhile the first system is undergoing sea trials. The newly conceived Sea Owl XTi, re-launched by Saab Seaeye, was originally the first 360° ROV to work in any orientation – even upside down. That earlier Sea Owl concept, successfully introduced by Saab in the 1980s, has been completely re-engineered. The new Sea Owl XTi includes the iCON intelligent control architecture, has double the payload, is powered by seven thrusters, and is depth rated to 2000 meters from the earlier 500.
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| February - March 2014 3/27/2014 5:18:51 PM
[MARINE TECH]
Kongsberg EM2040D. A 0.4 x 0.7 degree dual head multibeam system is developed multibeam echo sounder that combines all of the advanced features of deepwater echo sounders to the shallower water or ROV/AUV environment. Such features include dual swath per ping to maintain a high survey speed at maintained resolution.
MMT Installs Kongsberg Multibeam System
M
MT Group has announced that its new ownership of a Kongsberg EM2040D. A 0.4 x 0.7 degree dual head multibeam system has recently been installed on MMT’s long term charted multipurpose support vessel Stril Explorer. This is a highly developed multibeam echo sounder that combines all of the advanced features of deepwater echo sounders to the shallower water or ROV/AUV environment. Such features include dual swath per ping to maintain a high survey speed at maintained resolution; FM chirp to achieve a much longer range capability; complete roll, pitch and yaw stabilization and near-field focusing both when transmitting and receiving. By owning and operating an EM2040 dual head on Stril Explorer, MMT said it is further prepared to perform surveys that meet the IHO-S44 special order and fulfills the requirement for high resolution pipeline inspection.
Caley Delivers A-Frame for Boskalis’ CS Ndurance Caley Ocean Systems has supplied a high performance, A-frame handling system to Boskalis Offshore for launching trenching vehicles and ploughs from the company’s first ‘N Class’ cable-laying vessel Ndurance.Mounted on the stern of the Ndurance, the Caley A-frame is capable of handling loads of 70 tonne with a maximum lift and reach of 21m up to Seastate-5. The A Frame structure is manufactured in three sections, two leg sections and a top crossbeam. The crossbeam includes the pivot mountings for A-frame’s telescopic swinging beam assembly mounted on a dampening frame, allowing the lifting system to handle a wide range of equipment.
The Caley A-frame is capable of handling loads of 70 tonne with a maximum lift and reach of 21m up to Seastate-5. The A Frame structure is manufactured in three sections, two leg sections and a top crossbeam.
The A-frame includes an anti-pitch system incorporating two double acting hydraulic cylinders trunnion mounted to the crossbeam, together with hydraulic power unit (HPU) and winch, for maximum operational flexibility. In addition to cable-laying, the Ndurance’s A-frame will be used for a range of other tasks, including launch and recovery of tools and equipment associated with offshore construction projects. The Caley A-frame is widely used in offshore and ocean science applications where several systems have been in continuous service for over 30 years with many thousands of successful deployments.
February - March 2014 | Marine tech.indd 49
| 49 3/27/2014 5:18:52 PM
[BOOK REVIEW]
Port Infrastructure Finance [Hardcover] Editors Pages Price Publisher
: : : :
Hilde Meersman, Eddy Van de Voorde & Thierry Vanelslander 299 USD 250.40 Informa Law from Routledge Book Description: This book provides an expert analysis of alternative investments routes and the investment strategies available to the major port players, and is a much-needed guide to expanding the investor base for private debt funding of projects from loan providers to bond investors.This book provides expert insight into areas of port infrastructure finance across the main regions of Europe, Asia, Africa and the USA. Topics include how to estimate future demand by way of forecasting; Public-Private Partnerships; corporatisation; the pricing mechanisms for syndicated loans; European port privatisation; finance strategies for ports in Asia, the USA and Africa; and a discussion of the investment strategies available to the major port players.
Dredging in Coastal Waters (Balkema: Proceedings and Monographs in Engineering, Water and Earth Sciences) [Hardcover] Author Pages Price Publisher
: : : :
D Eisma 258 USD 185.51 Taylor & Francis
Book Description: The varied use of dredgers has led to the development of a variety of dredger types, from small ones appropriate to modest inshore projects, to very large sea-going dredgers for large-scale projects calling for the storage of dredged material within the ship. This book contains chapters on dredging operations in the Netherlands, Belgium, the UK, Spain, the US, China and Singapore. Additional chapters discuss more general aspects such as dredging techniques, monitoring of dredging operations, and the prospects of dredging in a changing environment. As well as providing information on dredging activities in different areas, it gives an insight into the activities and problems (environmental or other) involved in modern dredging. It will be of interest to professionals and students alike.
Economics of Shipping Practice and Management [Paperback] Author Pages Price Publisher
: : : :
A E Branch 256 USD 82.96 Springers Book Description: The subject of this book is treated in a practical way, providing the reader with an overall understanding of the economics of shipping practice. The increasingly important role of management is given more emphasis, especially in the area of budgets, finance, personnel and marketing. The book should appeal to college and university students preparing for shipping, export, international trade and transport examinations, and to practising managers. Its practical approach, explanations and comprehensive coverage make it particularly appropriate for shipping personnel wanting to broaden their horizons through self-study.
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| February - March 2014 3/27/2014 5:22:15 PM
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RNI No.: MAHENG/2008/29159 Date of Publication: 1st of every alternate month.
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