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Ports & Shipping

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

August 22, 2011 August 28, 2011

Ports The Ministry of Shipping(MoS) is planningto formspecial purpose vehicles (SPVs) to executeseven big-size portswhich are likely to be allowedto raise money from the market. The governmenthas envisaged setting up of seven major corporatised ports by 2017 at an estimated investment of Rs350 billion. The states of Orissa, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Maharashtra andGujarat are expected to get one port project each, which would be executed by the SPVs. Meanwhile, MoS has drawn up a Rs 1.55-trillion investment plan for modernisation andexpansionof ports over the Twelfth Five Year Plan period (2012-17). The agenda is to iron out therough edges of port infrastructure in the country. According to reports, the focus will be on improvingefficiency parameters of Indian ports, including upgrading outdated machinery, scaling up the work inroad and rail linkages, expansion to boost containerisation, deepening the draft at major ports and

awarding projects under the public-private partnership (PPP) mode with 52 per cent of plannedinvestment coming from the private sector. The remaining 48 per cent is expected to come from internalresources and extra budgetary resources. Further, MoS has expedited the process for corporatising the Jawaharlal Nehru Port Trust(JNPT) that was to be taken up along with unification of all the port statutes. The ministry hasasserted that this was being done to improve efficiency of the port. The move is expected to improveasset utilisation at JNPT and reduce the turnaround time. Meanwhile, MoShas stepped up the processto set up the fifth container terminal at JNPTwithan investment of over $2 billion on a build, operate and transfer (BOT) basis. The terminal isexpected to be awarded via a competitive bidding process. Some of the operators that have showninterest in the project include the Port of Singapore Authority (PSA) and Dubai Ports World (DP World).Both these operators already have container facilities in JNPT.

The Gangavaram port in Andhra Pradeshhas invited bids for its capital dredging work. Thescope of the proposed dredging work involves removal of about 3.5 million cubic metre of silt and thework order is likely to be issued within the next two to three months. The cost estimate will be finaliseddepending on the bids. According to reports, major international dredging contractors and a few Indianfirms, including the state-owned Dredging Corporation of India have expressed their interest in theproject. The bulk of the work will be undertaken to facilitate the construction of four new berths threemultipurpose berths and one fully-mechanised coal berth proposed to be built within 24 months fromthe day the contract is awarded. JNPTwill raise Rs 15 billion through a tax-free bond issuebefore March 2012for undertakingdredging works. According to reports, the amount will fund the first phase of the Rs 55-billion dredgingproject to increase the draft of the Mumbai port harbours channel. The Government of Kerala has initiated steps for the formationof the Kerala Maritime Board asa priority, which will resultin quicker decisions on ports and shipping, in additionto facilitating thedevelopmentof coastal shipping in the state. The states Port Directorate plans to undertake remedialmeasures such as creation of basic minimum port and related infrastructure at select port locations,devising an incentive framework, government's support, awareness creation, amongst others. The VO Chidambaranar(VOC) Porthas embarkedupon a massive inner harbour developmentproject toenhancethe present capacity from23.72 million tonne (mt)to 62 mt over the next two tothree years. According to reports, the second container terminal will be constructed at an estimated costof Rs 3.35 billion. Ascent Capital , a Bangalore-based private equity firm, has committed$30 million in KaraikalPort Private Limited, which is situated in the Union Territory of Pondicherry, owned and operatedbyMargLimited. The Karaikal port is envisaged to have a total of nine berths, capable of handling over 50

million tonne per annum (mtpa) by 2016. The port will be developed in three phases, with the final phasebecoming operational in 2016. Chettinad International Coal Terminal Limited(CICTL), the private terminalat the Ennore port,is targetingto handlenearly five mt of coal/cokeby the end of 2011-12. The buoyancy in handling is

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Ports & Shipping

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

August 22, 2011 August 28, 2011

based on expected shifting of coal from Chennai port to Ennore from October 2011 on the directions ofthe Madras High Court. DP World Limited has registered a total income of Rs 1.51 billion in the first six months(January-June) of the calendar year 2011, as againstRs 1.54 billionin the correspondingperiodofthe previous calendar year. The net profit during the period increased to Rs 740.87 million from Rs219.22 million in 2010, a growth of about 238 per cent. However, the total expenditure for the periodincreased to Rs 1.29 billion from Rs 1.27 billion. The consolidated throughput also increased to 13.47million twentyfoot equivalent units (TEUs) during the same period (January-June 2011) from 13.16 TEUsin the corresponding period of 2010, recording a growth of about 2 per cent. International Finance Corporation is planning to providea $11.5-million loan to Sparkle PortServices Limited (SPSL), a100-per cent subsidiaryof Hyderabad-basedport management service

provider Ocean Sparkle Limited, for a tenorof 12 years. SPSL recently received a 17-year contractfrom Petronet LNG Limited to provide services at its upcoming liquefied natural gas (LNG) terminal atKochi. The total project cost for the contract, entailing purchases of tugboats and marine craft, is $31.5million. The loan amount will be used to part-fund the capital expenditure for this project only.

Shipping TheParliamentary CommitteeonTransport,TourismandCulturehasrecommended relaxingthe cabotage law to allow foreign-flagged vessels to deliver cargo between Indian ports. Cargodelivery by foreign-flagged ships is being considered as a major boost to the international containertransshipment terminal (ICTT) at Vallarpadom and a similar facility proposed at Vizhinjam inThiruvananthapuram. In the recent past, the Parliamentary Standing Committee had also recommendedamendments to the cabotage law.

The Shipping Corporation of India Limited (SCI) has accepted delivery of m v SCI Panna,a2,001-deadweight tonnage (DWT) anchor handling tug-cum-supply vessel (AHTSV) of 80 tonnebollard pull (tbp)capacity.The company had signed contracts for acquisition of four newly built 80 tbpAHTSVs with Bharati Shipyard Limited. The remaining three vessels are scheduled for delivery by theend of 2011. Meanwhile, SCIis planningto investaround $114 millionto acquire six offshore vessels. Eachof the anchor-handling vessels would cost around $19 million. According to reports, SCI is keen onramping up its offshore presence and plans to spend up to $250 million to acquire 10 offshore vessels inthe near future. The Cochin Port Trusthas decidedto float a global tenderto selecta partnerfor its proposedship repair yard. The project is part of a plan to redevelop its water front and other facilities, whichbecame idle following the commissioning of the Vallarpadam ICTT. Dolphin Offshore Enterprises (India) Limited has posted a decline of 13.58 per cent in itsconsolidated incomeat Rs 695.29 millionduring the first quarter(April-June) of the financial year2011-12 asagainst Rs 804.62 million in the corresponding quarter of the previous year. However, netprofit for the quarter increased to Rs 65.17 million as against a net loss of Rs 123.09 million in thecorresponding quarter of 2010-11. According to a new vessel sharing arrangement, the Hong Kong-based Orient OverseasContainerLine (OOCL) has jo inedChina-IndiaNCXservice now being runby Samudera Shippingand Japan's Mitsui OSK Lines. The service links Shenzhen-Da Chan Bay (Central China) with JNPT.As per the agreement, OOCL will offer one vessel, the recently chartered 2732-TEU Antje Wulff, thusbringing the total number of vessels deployed on the route to five of the capacity ranging between 2,000and 2,700 TEUs. The new port rotation will be Ningbo-Shanghai-Shenzhen Da Chan Bay-Hong Kong-

Singapore-JN Port-Colombo- Port Kelang- Singapore- Shanghai-Ningbo.Note: Rs 1 crore = Rs 0.01 billion; Rs 1 lakh = Rs 0.1 million; Rs 1,000 million = Rs 1 billion