Ports & Shipping News

July 04, 2011 July 10, 2011

India Infrastructure Publishing B-17, Qutab Institutional Area New Delhi 110016 Tel: 91-11-4103 4600 / 4601 Fax: 91-11-2653 1196 E-mail: info@indiainfrastructure.com

Ports According to reports, the Ministry of Shipping (MoS) is not keen on firms from West Asia and China bidding for domestic port projects citing security concerns, a move which may affect the plans of companies such as Dubai Ports World, Hutchison and Ningbo Port Group Limited. According to sources, the government is of the view that port development provides access to the country's vital coastal regions and entry of developers from these two regions could raise security issues. The cargo traffic at the 12 major ports in the country has increased by 5.22 per cent to 146.56 million tonne (mt) during the first quarter (April-June) of 2011-12 over the corresponding quarter of the previous fiscal. Among ports, the Kandla port handled the highest traffic at 21.14 mt (6.21 per cent growth), followed by Visakhapatnam port at 18.64 mt (18.57 per cent growth) and Jawaharlal Nehru Port Trust at 16.44 mt (2.33 per cent growth). Amongst commodities, petroleum-oil-lubricants (POL) accounted for the highest share of 32 per cent (46.59 mt), followed by containers with 20.4 per cent share (29.89 mt). Krishnapatnam Port Company Limited (KPCL) has signed an agreement with governmentowned Container Corporation of India (Concor) to provide seamless movement of container traffic from the port to the hinterland. KPCL and Concor will jointly develop the required rail infrastructure to cater to the growing container movement after the container terminal at Krishnapatnam Port goes operational in a month. The deal is expected to generate revenues to the tune of Rs 20 billion by 201516. Currently, Krishnapatnam Port, located on the east coast of the country, handles only bulk cargo like iron-ore and coal. The port will provide adequate facilities and infrastructure for storage and operation of railway rakes and containers at its premises. The company has set up two berths that can handle up to one million twentyfeet equivalent unit (TEU) containers annually. Meanwhile, the Anil Dhirubhai Ambani Group (ADAG)-promoted Reliance Power has entered into a port services agreement with KPCL for handling coal imports for the 4,000-MW Krishnapatnam Power project. Funds for the power project have already been tied up through a special purpose vehicle (SPV), Coastal Andhra Power. Coal for the ultra mega power project (UMPP) will be shipped from the Reliance Power acquired mines in Indonesia till the port site and evacuated by conveyor belts to the power plant. According to reports, Reliance Port and Terminals, a part of the Mukesh Ambani-led Reliance Industries, will raise Rs 14 billion through a private placement of bonds. The company will offer bonds with a 10-year tenure at 10.4 per cent. Yes Bank is the sole lead manager for the bond issue. Jindal Steel and Power Limited (JSPL) has evinced interest on setting up a captive port at Bahuda Muhan in Ganjam district of Orissa. The port will be located 30 km south of the existing Gopalpur port and 18 km from Berhampur. While the capital cost of the project is Rs 14.24 billion, the operational cost of running the port will be Rs 1.52 billion per annum. The first phase is scheduled to be operational by 2017. The port will not require acquisition of farm land and there are no issues involved with nesting of the endangered Olive Ridley turtles in the area. The captive port will handle Capesize vessels of 150,000 deadweight tonnage (DWT) for coal and coke and Handymax vessels (50,000 DWT) for general cargo. During the first phase, the port will have two dedicated berths for handling coal and limestone and one berth for general cargo. The port is expected to handle about 33 million tonne per annum of coal and other import items. Work on the second phase is set to begin after 2017, when the port will have three more general berths. Essar Ports Limited, the demerged entity of erstwhile Essar Shipping, Ports and Logistics Limited, has posted a consolidated net profit of Rs 701.5 million during 2010-11. The total operating income of the company in 2010-11 stood at Rs 19.41 billion. Of this, earnings from fleet operations and chartering contributed about Rs 6.36 billion while the contribution of its port and terminal services was Rs 6.98 billion. Pursuant to the demerger scheme, which became effective from May 9, 2011, the authorised share capital of the Essar Ports stands reduced to Rs 10.10 billion from Rs 15.10 billion prior to the scheme. Besides, Essar Bulk Terminal Paradip Limited has become a subsidiary of the company from March 31, 2011. Meanwhile, the board of Essar Ports Limited has approved issuance of foreign currency convertible bonds, global depository receipts, American depository receipts, optionally compulsorily convertible bonds and any other instruments convertible into shares of the company up to $500 million.

Ports & Shipping News

July 04, 2011 July 10, 2011

India Infrastructure Publishing B-17, Qutab Institutional Area New Delhi 110016 Tel: 91-11-4103 4600 / 4601 Fax: 91-11-2653 1196 E-mail: info@indiainfrastructure.com

Gujarat Pipavav Port Limited has entered into an agreement with IMC Limited wherein they
intend to take on lease 100,000 sq metre of land to develop the tankage facility at the Pipavav port. The work on coal and iron-ore berths at the Paradip port, which has already been delayed by two years, is expected to start in September 2011. It is expected that the forest clearance from the Orissa government will be obtained by July-end, 2011 and final clearance from the Ministry of Environment and Forests by August 31, 2011. The two berths, each with the capacity of 10 million tonne (mt), are estimated to cost about Rs 9 billion. The projects will be implemented through public-private partnership (PPP) route. The two concessional agreements were signed in July 2009 and November 2009 with Blue Water Iron Ore Terminal Private Limited, an SPV of the Nobel Group, for the iron-ore berth and with Essar Paradip Terminals, the SPV floated by the Essar Group, for the coal berth respectively. Meanwhile, the public hearing for environmental clearance for multipurpose berth and oil jetty was held recently. It is expected that various statutory clearances will be obtained in another six months. According to reports, all bottlenecks which have hindered the Kulpi port projects movement will be cleared within the next two weeks. The Rs 24-billion project, which has been stuck for 16 years due to clearance issues, is being developed by Bengal Port Limited, a joint venture with DP World and Keventer Agro holding equal stake. The third part of the stake lies with the state government. The project was conceived jointly by Keventer and Mukand in 1994, and was later joined by P&O in 1997. P&O joined in as an equity partner. The deal got transferred to DP World when it acquired P&O in 2006. For the first seven years, the project was stuck on issues of denotification of the Kulpi area where the state government was supposed to take over from the Kolkata port. Subsequently, issues arose with respect to dredging and subsidies. Considering Kochi's close proximity to the international shipping routes, the Kochi port has drawn up an ambitious plan to scale up its international bunkering prospects, in order to overtake the neighbouring Colombo port in volumes in the near future. The plan, however, involves improving infrastructure for bunkering in view of the fact that the factors that influence bunker trade included the ability of the suppliers to provide bunkers at internationally competitive prices, sound bunkering facilities at load/discharge ports, simultaneous bunkering with cargo operations, avoidance of diversions for bunkering and lower port tariffs for bunkering calls. According to reports, the Orissa government wants an amicable settlement to its dispute with the Kolkata Port Trust (KoPT) over extension of the ports limits. The state government has said that it will share the transloading facilities that KoPT proposes to offer at the Kanika Sandheads between Haldia and the Dhamra ports. Meanwhile, the Rs 5.8-billion transloading project at KoPT, which includes a berth at Haldia, has reportedly already received expression of interest (EoI) from four parties. These include a consortium of Shipping Corporation of India, Bocium, Seabulk-Canada, IL&FS and IFHPL, Mundra Port, Gammon India and Transtroy India. Since there are only four parties, the shortlisting may be dropped before inviting the technical bids. It is expected that KoPT will award the project by 2011-end and complete the project by October 2012. Shipping MSPL Maritime and Diamond Private Limited, the newly-formed shipping company of the Karnataka-based iron-ore exporter MSPL, has taken delivery of Panamax ship Indus Fortune from a China-based shipyard Taizhou Sanfu Ship Engineering Company. This is second in the series of four post-Panamax bulk carriers of 93,000 DWT capacity ordered by the company. MSPL has chartered the ship to the Kolkata-based Gujarat NRE for transporting coking coal from Australia to India. The company is investing Rs 12 billion to procure the four vessels. The first vessel Indus Prosperity was delivered on April 22, 2011 while the remaining two vessels are scheduled to be delivered in the next 18 months.
Note: Rs 1 crore = Rs 0.01 billion; Rs 1 lakh = Rs 0.1 million; Rs 1,000 million = Rs 1 billion