port & dock workers oppose major ports implementing...
TRANSCRIPT
ASSOCIATION OF MULTIMODAL TRANSPORT OPERATORS OF INDIA
Weekly News 28.06.2013—04.07.2013 Volume 1, Issue 15 Inside this issue:
Port & dock workers oppose
Major Ports 1 Cabinet approves ratification of
Maritime Labour Convention 1
APSEZ & MSC form JV 2
No tax on services provided to
SEZs for authorized operations 2
AIAI for reduction in Excise,
Customs and State Taxes duty 2
17 containers slip from ship in
Gujarat waters 2 Kerala leads in PPP-based Port
projects 3 Bangladesh hopes to attract
investments from India 3 Suez Canal Remains Open
Amid Turmoil in Egypt 3 Asia-Europe Container Shipping
Rates Skyrocket 4 Drewry: P3 Network to Chal-
lenge Ports Worldwide 4 Chennai Port scraps third con-
tainer terminal project 5 Anand Sharma meets export
bodies 5 China gains technology ad-
vantage 5
Jamaica urges seafarers to pay
keen attention to MLC 6 Pvt. player can take call on
project development at Ennore 6 ADPC & Abu Dhabi Customs
sign strategic partnership 6 Railways to relaunch scheme :
operators run pvt. freight trains 6 Humor
7
The All India Port & Dock Workers' Federation has expressed its opposition to the
Ministry of Shipping wanting Major Ports to implement all projects under the PPP
model, where port labourers have no say.
This was among the many views put forward and deliberated at a meeting of the
federation held at New Mangalore Port last week, which was presided over by Mr.
S. R. Kulkarni, President of the body. Participants stressed that there was no need to
implement projects at Major Ports through PPP as the Ports had sufficient reserves
to undertake such developmental works on their own.
It was pointed out that the number of regular workers at Major Ports had fallen below 50,000 while
the casual and contract workers were increasing. The federation demanded that all those workers
employed directly or through contractors on casual or contract basis, and involved in similar port-
related jobs, be paid equal wages and get the same benefits as regular workers.
The Working Committee of the federation also wanted the speedy implementation of wage revision
and other service conditions, as well as execution of the Afzulpurkar Committee report on classifica-
tion and categorization.
The MoU signed between the Port managements and the recognized federations on new PLR schemes
should be expeditiously approved by the Ministry, the Committee demanded.
It also strongly opposed the recent government decision to direct Port Trusts not to fill any Class-IV
(Group-D) and Class-III (Group-C) posts and outsource the work.
Prominent union leaders who attended the meeting were Mr. P. M. Mohd. Haneef, General Secretary,
Mr. D. K. Sharma, Addl General Secretary (Vizag), Mr. M. L. Bellani, Secretary (Kandla), Mr. G. M.
Krishnamurthy (Chennai) and Mr. Suresh Shetty, Vice-President (New Mangalore).
Port & dock workers oppose Major Ports implementing projects through PPP
THE Union Cabinet recently approved the Shipping Ministry’s proposal to amend the Merchant Shipping
Act, 1958 and ratify the Maritime Labour Convention, 2006 of the International Labour Organization
(ILO). The Convention, which is coming into force in August, seeks to provide a safe and secure work
environment on a ship, fair terms of employment, decent working and living conditions onboard, medical
care and other social protections. It is expected to significantly improve the working conditions for sea-
farers. There are no financial implications.
Ships would have to comply with the Convention by having a Maritime Labour Certificate and Declara-
tion of Maritime Labour Compliance issued by the flag state. These must be available on board for any
port state inspection, it is learnt.
Cabinet approves ratification of Maritime Labour
Adani Ports & SEZ Ltd (APSEZ), part of the Adani Group, a global integrated infrastructure
player, has announced that it has formed a joint venture (JV) with Geneva-based Mediterranean
Shipping Company (MSC), the world's second largest container shipping line, to operate the
Adani International Container Terminal Private Ltd (AICTPL), at South Basin. This is the third
container terminal at Mundra Port.
Mundra Port, India's largest private port, set up this new facility, which has capacity of 1.5 million TEUs, deploys the largest cranes, has the
deepest draught and the longest berths, heralding a new era in Indian maritime history, stressed a release. The terminal has state-of-the-art
technology and an environment-friendly footprint.
APSEZ & MSC form JV to operate Adani International Container
Page 2
The government has said that special economic zone (SEZ) develop-
ers and units will not be required to pay tax on certain services for
which they had to seek refunds. According to Finance Ministry
sources, exemption shall be provided by way of refund of service tax
paid on the specified services received by the SEZ unit or the devel-
oper and used exclusively for authorized operations.
Therefore, the person liable for service tax has the option not to
pay the tax ab initio, sources close to the Revenue Department said.
"The SEZ unit or the developer shall
get an approval by the Approval
Committee of the list of services as
are required for the authorized
operations (referred to as the
‘specified services’ elsewhere in the
notification), on which the SEZ unit or developer wish to claim ex-
emption from service tax," said a Finance Ministry statement.
No tax on services provided to SEZs for authorized operations
In recent months there has been 3 increases in
Petroleum prices due to the weakening of rupee
although the prices in international are not in-
creasing. This could have been avoided by reduc-
tion in excise, custom duty and state taxes which
account for more than 50% addition to cost of
these products, said Mr. Vijay Kalantri, Presi-
dent, All India Association of Industries (AIAI).
AIAI feels that there is need to provide thrust to infra projects such
as Roads, Power, Ports and Railways which will help spur economic
growth and make exports more competitive. Today, the transaction
cost in regard with movement of goods add to the cost of goods by
as much as 40% due to lack of proper infrastructure.
AIAI further feels that there is need to streamline the procedures
and simplify regulations and irritants coming in the way of growth at
all levels. There is need for special sessions of Parliament not only to
clear the pending economic bills but also to do away with regulations
which are old and archaic going back to 1885 and 19th century to
create a more conducive environment to give impetus to growth,
employment and exports. Today, the cost of Railway freight is higher
than the cost of freight by Road, despite the frequent hikes in diesel
prices. Also, the burden of subsidized passenger fares is being passed
on to goods freight. This anomaly should be removed as soon as pos-
sible to make exports internationally competitive and ensure
the domestic goods get level playing field.
AIAI also feels that inflationary trend especially in regard with essen-
tial commodities and common mans day-to-day needs is on the rise.
This is due to poor transportation which should be improved since
over 60% of goods such as fruits and vegetables perish even before
these reach the markets. The need of the hour is rationalization and
simplification of existing structure which should not only remain on
paper but should be implemented in earnest and effectively with ac-
countability. The various schemes of the Government such as
NREGA need to be reviewed to avoid increase in State deficit and
taxes. Our country cannot afford to pay without work or some
scheme to be evolved where payment is made against work to the
employed.
AIAI for reduction in Excise, Customs and State Taxes duty on Petro projects
Seventeen containers on board a merchant vessel slipped off Okha
West and began floating in sea prompting the Gujarat Maritime
Board (GMB) to sound an alert for ships approaching Gulf of Kutch,
a major corridor for crude oil imports.
“About 17 containers slipped from MV Rajiv Gandhi, a container
vessel of Shipping Corporation of India (SCI), off Okha West coast
on June 27 when it was on way to Mundra port,” Chief Nautical
Officer (CNO), GMB, Mr. S C Mathur said. “The containers are
floating in the sea posing danger to vessel traffic movement,” he said.
Mr. Mathur said all the authorities concerned like Indian Coast Guard
(ICG), Director General of Shipping and SCI have been informed
about the incident, and GMB’s Vessel Traffic Management System
(VTMS) in Gulf of Kutch is issuing alerts.
The ICG is keeping a constant vigil on the container movement in the
sea, he added.
17 containers slip from ship in Gujarat waters
Page 3
Kerala leads in PPP-based Port projects under bid: Assocham
With two projects worth over Rs 5,500
crore, Kerala is the frontrunner among
states that have projects under bidding in
the public-private-partnership (PPP) model
in the ports sector, said a study conducted
by the Associated Chambers of Com-
merce and Industry of India (Assocham).
As per the report titled 'Port Developments in India', the Kerala
projects represent a share of 40% in value terms. While two projects
worth over Rs 6,200 crore are under construction in the state, one
completed project, worth over Rs 700 crore, has been put to ser-
vice delivery, the study said.
"Out of the total 881 PPP projects worth over Rs 5.4 lakh crore
taken up across India, 62 projects in the port sector worth over Rs
82,000 crore are in different stages of implementation," said D S
Rawat, Secretary General of Assocham.
"While there are 31 completed port projects worth over Rs 24,700
crore, about 21 PPP projects in the port sector with a share of 52%
worth over Rs 43,000 crore are under construction, eight projects
worth about Rs 14,000 crore with a share of about 17% are under
bidding," said Mr. Rawat.
In the under construction category, Kerala, Maharashtra, Odisha and
the Union territory of Pondicherry are the regions with maximum
share, ranging from 7% to 16% of the PPP projects, worth over Rs
2,900 crore -Rs 6,700 crore.
"There is an urgent need to modernize India's ports as the existing
ports are plagued with a plethora of problems like congestion, poor
connectivity, accessibility and lack of adequate facilities," said Rawat.
Considering that India's port infrastructure is not at par with the global
standards, it poses severe challenges to the country's trade in terms of
higher costs and turnaround time at ports, he added.
Bangladesh hopes to attract investments worth $5 b from India in 3 years
Bangladesh expects investment from India to double to $5 billion in
the next three years. India’s neighbour signed agreements worth
around $23 million, in Mumbai . “Now, with greater trade ties with
India, we want to attract more foreign direct Investment (FDI),”
Matlub Ahmad, President, India-Bangladesh Chamber of Commerce
and Industry, said.
“While garments and agricultural products are exported from Bang-
ladesh, Indian exports include automotives and pharmaceuticals. We
feel that Indian investment in Bangladesh, with the possibilities of re-
export to India, would help in diversifying the exports of Bangladesh
and thereby reduce the trade gap between India and Bangladesh,”
Kris Gopalakrishnan, President, Con-
federation of Indian Industry (CII) and
Co-Founder and Executive Vice-
Chairman, Infosys said.
A high-level trade delegation from
Bangladesh is visiting India and the
country is seeking partnerships across 13 important sectors.
Bangladesh is targeting a 7.2 per cent growth in GDP this year, com-
pared with 6 per cent last year, and is banking mainly on India for the
investments.
Suez Canal Remains Open Amid Turmoil in Egypt
The Suez Canal remains
open amid unrest in Egypt,
but some transport opera-
tions around the country
are closed.
Both sides in the turmoil
that has led to the ouster
of Mohammed Morsi from
the presidency recognize the importance of the canal to Egypt’s
economy, CNBC reports. It cited the Egypt Independent for a state-
ment by Mohab Mohamed Hussein Mameesh, head of the Suez Canal
Authority, that navigation was normal on July 3.
A total of 45 vessels passed through the canal on July 4, according to
figures on the canal authority’s Web site. The container ship Eugen
Maersk was the largest northbound vessel, and an LNG ship, UMM
SLAL, was the largest southbound.
Concerns over a threat to shipping via the Suez Canal had sent oil
prices higher this week, but they have retreated from those earlier
highs. Much oil tanker traffic uses the canal, and container lines have
been shifting more of their all-water services from Asia to the east
coast of the United States to the route as well.
The Suez Canal Authority is, however, warning customers not to
respond to e-mails sent from “@suezcanalauthority.com,” as the
official e-mail extension is “@suezcanal.gov.eg.”
Disruptions have occurred elsewhere, however. According to BDP
International, its Global Network partner in Egypt, Sea & Air Inter-
national Shipping and Forwarding, has reported a curtailment of in-
ternational cargo activity since June 30, and cargo operations at sea-
ports and airports, as well as transportation authorities and govern-
ment ministries, have been closed since July 3.
Industry sources in the country are said to expect operations to
return to normal by July 7.
Asia-Europe Container Shipping Rates Skyrocket
Page 4
The planned alliance between
Maersk Line, Mediterranean
Shipping Co. and CMA CGM
poses a major challenge for
ports and container terminals in
Europe, the U.S. and Asia serv-
ing the carriers’ pooled network
of 255 ships on 29 service loops,
according to shipping consultant Drewry.
“The ramifications of the consolidation for the port industry are enor-
mous,” London-based Drewry said. Each of the three carriers, the
world’s largest, already operates more very large container ships than
any other lines, “so catering for their combined cargo-handling require-
ments will be on a scale never seen before.”
The carriers, which plan to launch the P3 Network in the second half of
2014, have “family connections” with terminal operators, “so choosing
the best port and terminal will not only come down to the best for
each job.” Maersk is linked to APM Terminals, CMA CGM part
owns Terminal Link, and MSC has a stake in Terminal Investment
Ltd.
APM Terminals has a presence in Bremerhaven, where Maersk calls
more than 10 times a week, but not in Hamburg, and MSC prefers
Antwerp over Rotterdam. Drewry questions whether the carriers
will consolidate or rationalize their port calls. “While economies of
scale are there for the taking, it will result in tampering with the
well-established berthing windows of each schedule, and the feeder/
intermodal connections of each carrier, which will, presumably,
remain separate,” it said in the latest container weekly insight.
The carriers will offer better coordinated schedules and improved
turnaround times, but rationalization of ports and terminals within
the P3 Network “may be a bridge too far, at least initially.”
Drewry: P3 Network to Challenge Ports Worldwide
Infographic: How the P3 Network Stacks Up
Spot container shipping rates in the Asia-Europe
trade soared 165 percent in the week of July 4
as general rate increases carriers implemented
on July 1 took hold, according to the World
Container Index.
As of Thursday, rates in the benchmark Shanghai
-Rotterdam trade were $2,622 per 40-foot con-
tainer, up from $990 a week earlier.
Carriers in May and June announced plans to
raise rates by $1,000 per 20-foot-equivalent
container unit on July 1. “Over three-quarters of
the planned $1,000-per-TEU rate increases was
implemented, based on our assessments in China
and Europe,” WCI Director Richard Heath
said.
The spike brings a volatile year for the Asia-
Europe trade full-circle for the year. Rates at
the end of June fell to a 19-month low, to
within $46 per FEU of the December 2011
trough, industry analyst Drewry noted. This
week’s increase brings Asia-Europe rates
back to levels at the beginning of the year.
Whether they have staying power, however,
is uncertain, as demand struggles to keep up
with growth in capacity. “We expect the rate
increase to be partly reversed in the next
f e w
weeks,”
s a i d
M a r t i n
D ixon ,
Drewry’s research manager for freight rate
benchmarking. “However, the price correc-
tion will also serve to forestall any further
erosion in contract rates that were original-
ly agreed at the start of year when the
market was stronger.”
A f t e r
severa l
f a i l e d
a t -
tempts to obtain bids for the ambitious Rs 3,686
-crore third mega container terminal at Chennai
Port, the Board of Trustees has reportedly de-
cided to scrap the proposed project. The Trus-
tees felt that any further extension may not
bring forth the desired response, it is learnt.
The terminal, to be built as per the 'build,
own and transfer' model, was part of the
Shipping Ministry's plan to seek bids for 30
port projects worth Rs 24,633 crore by
March 2014 in order to add 288.48 million
tonnes of cargo-handling capacity at the coun-
try's 12 Major Ports.
The Essar Group was the only company
which showed interest in the project, but it
quoted 5.15 per cent as revenue share when
the bid was first opened in December last
year. The Board rejected it saying that it
was too low for such a large project.
The plan was to have two new breakwa-
ters (total length 4.5 km) and a continu-
ous quay of 2 km, which would ultimately
have had 22-metre 'alongside depth' to
handle ultra-large containerships of over
15,000 TEUs capacity and 400 m in length.
Chennai Port scraps third container terminal project
Page 5
The Government held discussions with Industry Chambers and Export
Promotion Councils on ways to boost the country's shipments.
“Commerce and Industry Minister Anand Sharma reviewed the export
scenario. Chambers and export promotion councils (EPCs) suggested
ways to boost exports," an official said.
Apex industry body FICCI has said that India's exports are facing several
challenges which include fragile global economy, rise in protectionist
tendencies and ballooning current account deficit. India’s exports entered
the negative zone after a gap of four months, recording a contraction of
1.1 per cent in May and leading to a trade deficit of USD 20.1 billion, high-
est in the last seven months. Ficci said that India's exports are facing sev-
eral challenges which include fragile global economy, rise in protectionist
tendencies and ballooning current account deficit. Current Account Defi-
cit (CAD) touched a record high of 4.8 per cent of GDP in 2012-13 on
rising gold and oil imports.
President of Federation of
Indian Export Organiza-
tions (FIEO) Rafeeq Ah-
med said the main reason
for decline in exports is
global demand slowdown.
"This is a serious cause of
concern. Unless manufacturing picks up in India, it will be difficult
to push exports. Our focus should be to make manufacturing
competitive and facilitate flow of investment in manufacturing," he
said.
He asked the government to devise a planned Export Develop-
ment Scheme for 5 years with sufficient corpus to put focus on
marketing.
Anand Sharma meets export bodies to suggest ways to boost exports
C H I N A ' s
shipbuilders,
licensed to
use technol-
ogy from
Hambur g ' s
T e chn o l o g
Gmb, stand to lead global production of LNG-
fuelled containerships, according to a report.
Licenses were purchased by China's state-owned
SUMEC Marine Company to build LNG-fuelled
containerships in the 3,500-5,000-TEU range.
The company is expected to promote the new
design to 10 shipbuilders in Jiangsu province.
Named STREAM—Sustainable Transport, Relia-
ble, Economic and Ambitious—the containership
has been developed by Hamburg engineering
association IPP, said the report.
STREAM ships are reportedly entirely compli-
ant with the International Maritime Organiza-
tion's (IMO) rules on carbon emissions, re-
ducing it by 30 per cent compared to new
same-sized non-LNG-fuelled vessels. In addi-
tion to reduced carbon dioxide emissions,
STREAM ships also have much reduced out-
put of nitric oxide (NO2) and sulphur oxide
(SO2) gases.
The design's hatchless container storage sys-
tem has a stopper element that absorbs the
weight of the upper container layers, so that
the pressure on the lower containers does
not become excessive and cause container
collapse.
According to Technolog, this means that
container tiers can be piled twice as high as in
the past, even without the help of cell guides.
The system makes it possible for TEUs
and FEUs to be loaded or unloaded one
stack at a time, as well as handling differ-
ent 45-, 48- and 49-footers with equal
ease. This avoids the expense of cargo
relocation when in harbour, and shortens
turnaround times. A special ventilation
system enables nearly all FEU slots in the
hold and up to three layers on deck to be
used to stow refrigerated containers.
With its dual fuel main engine, the ship
can run either on traditional bunker or on
LNG. When LNG is used exclusively,
sulphur oxide emissions can be almost
completely eliminated.
China gains technology advantage in race to build LNG-fuelled boxships
The Mari-
time Au-
thority of
Jamaica (MAJ) has urged seafarers to pay keen
attention to the provisions of the Maritime La-
bour Convention (MLC) 2006.
With just a few weeks to go before the Interna-
tional Labour Organization's "Bill of Rights" for
seafarers comes into effect, Jamaica is encourag-
ing seafarers to take its provisions seriously,
pointing out that their diligence is also critical to
the successful implementation and enforce-
ment of the provisions of the Convention.
Rear Admiral Peter Brady, Director-General
of the MAJ, said: "Jamaica recognizes the tre-
mendous contribution seafarers make to the
world economy and commerce. We should…
recall that the provisions of the Convention
were developed as a tripartite instrument
with the input of governments, shipowners
and seafarers' representatives. The implemen-
tation and enforcement also need this three-
party commitment to achieve its over-
arching aim—decent working conditions
and social protection for seafarers as well
as secure economic interests in fair com-
petition for quality shipowners."
Jamaica has communicated its guidance
notes and declaration of maritime labour
compliance to all owners, managers and
operators of Jamaican ships, while it final-
izes measures to sign the Convention
Jamaica urges seafarers to pay keen attention to MLC
Page 6
The Ennore Port Ltd has allowed the private
sector to decide on how to go about developing
a new container terminal project. In what could
be a trendsetter for all government-controlled
ports, the country’s only corporate port has left
it to the successful bidder to either build the
entire terminal in one go or in phases, it is
learnt.
Generally, in such projects, directions are given
by the Port Trust and the private player would
have to follow them. "They will take a call de-
pending on the market conditions," said a
Port official. Revival of the ambitious contain-
er terminal project, to be developed at an
estimated cost of Rs 1,270 crore, has attract-
ed many companies, among them reportedly
being Larsen & Toubro, Gammon, Sical, APM
Terminals, DP World, Port of Singapore Au-
thority, ULA, Samsung C&T, John Keels Hold-
ings Plc, etc. The project would come under
the design, build, finance, operate and transfer
model instead of build, operate and transfer
mode l .
T h e
pr ivate
p l a y e r
w o u l d
also be
g i v e n
the option of building the terminal in two
phases, as against the earlier direction of
building one single block having a 1,000-
metre long berth.
Pvt. player can take call on mode of project development at Ennore
Abu Dhabi Ports
Company (ADPC), a
master developer
and regulator of
ports and industrial
zones in Abu Dhabi, has announced the signing
of a strategic partnership agreement with Abu
Dhabi Customs to simplify procedures at Khalifa
Port and Khalifa Industrial Zone Abu Dhabi
(Kizad).
The agreement lays the foundation for future
operations for the import and export of
goods and movement of final products in and
out of Khalifa Port and Kizad—a wholly-
owned subsidiary of ADPC—as well as across
the UAE.
As part of the partnership agreement, a plot
of land has been allocated for a permanent
documentation service centre in Kizad, close
to Khalifa Port. The new centre will offer
customers a dedicated resource for effi-
cient and quicker processing of all import/
export paperwork.
For both Abu Dhabi Customs and ADPC,
it is of the utmost importance to provide
customers with efficient delivery of ser-
vices and promote the Emirates' 'ease of
doing business' motto.
ADPC & Abu Dhabi Customs sign strategic partnership agreement
The Railways is all set to relaunch its special
freight train operator (SFTO) scheme, thereby
allowing operators to run private freight trains
to transport special commodities.
The move should boost privatization in freight
movement as the scheme is perceived as more
investor-friendly than the previous version
launched in 2010. The scheme had failed to draw
any interest from the industry at that time. As
per the new SFTO, private train operators
would be allowed to load commodities like black
oil, which was previously barred. The period
of rebate that was earlier 12 per cent for 8-
10 years has now been increased to 20 years
and the registration cost has also been re-
duced," said a Railway Board statement. Un-
der the scheme, an operator can privately
own a freight train that would be used for
transportation of identified commodities using
the rail infrastructure.
The policy gives manufacturers and logistics
service providers a chance to invest in wag-
ons and
take ad-
vantage of
the rail
transport
s y s t e m ,
connect-
ing end-
users and markets with train services
owned by them.
Railways to relaunch scheme letting operators run pvt. freight trains
Page 7
Humor
C/o. CKB, 1st Floor,
20, Raja Bahadur Mansion,
Ambalal Doshi Marg., Fort,
Mumbai - 400 023.
Tel. : +9122 6637 0021.
Fax : (91-22) 6637 0022
Email : [email protected]
Editorial Team:
Mr. Xerxes P. Master
Mr. Vivek Kele
Following the enactment of the Multimodal Transportation of Goods Act, 1993, AMTOI Associa-
tion of Multimodal Operators of India) was established in the year 1998.
The main objects of the Association are to
To organize Multimodal Transport Operators at national level
To study the issues faced by MTOs and seek resolution with appropriate authorities
To promote multimodal transport services in foreign trade
To improve the quality of such services and reduce transaction costs
AMTOI is registered as a non-profit making body under the Indian Companies Act and its core
managing committee consists of seven members. The committee is assisted by a Board of Advi-
sors consisting of the representatives of Government and public sector organizations.
We at AMTOI have always endeavored to have a harmonious maritime community to bring con-
sensus amongst all segments of our community, whilst making representations to various authori-
ties. AMTOI has always tried to bring together all the segments of the maritime community under
one common platform to promote Multimodalism in India. Our members are shipping lines, ship-
ping agents, freight forwarders, transporters, CFS operators and custom house agents.
ASSOCIATION OF MULTIMODAL TRANSPORT
OPERATORS OF INDIA
Catalysing Multimodalism
www.amtoi.org