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SHIPPING
The UPA Government completes one year on May 21, 2005. During this period, the Government has taken several important initiatives. Some of these are being brought out in the series ‘Major Decisions and Initiatives’.
In the light of the guiding principle - highest priority to development and expansion of physical infrastructure - enunciated in the National Common Minimum Programme, the UPA Government is fully committed to accelerated development of maritime infrastructure in the country.
The Maritime Sector in India comprises Ports, Shipping Lines, Shipbuilding and Ship-repair Industries and Inland Water Transport Systems. India has 12 major ports and 185 minor/intermediate ports. Over 95 per cent by volume and 70 per cent by value of India’s trade is carried out through maritime transport along its 7,617 km long coastline. India has the largest merchant shipping fleet among the developing countries and is ranked 17th in the world. As on April 1, 2005, India had a total of 686 ships comprising 8.01 million Gross Tonnage (GT) and 13.28 million Dead Weight Tonnage (DWT).
Maritime Policy
For the first time, a comprehensive policy for the maritime sector is being formulated. The policy seeks to combine vision and strategy for the sector through harmonious and coordinated development of maritime assets like ports, shipping lines, inland water transport systems, shipbuilding and ship-repair industries. The draft Maritime Policy will be placed before the Cabinet after Inter-Ministerial Consultation, which is currently underway.
National Maritime Development Programme
The Government has taken up preparation of the National Maritime Development Programme by identifying specific schemes/projects and other measures that are necessary to give a concrete shape to the vision and strategy laid down in the Maritime Policy document over a ten-year period. The programme will be implemented through public-private partnership and will involve investment of Rs. 60,000 crore in the ports sector and Rs. 40,000 crore in the shipping and Inland Water Transport sector. Public investment will be primarily for common user infrastructure facilities in the ports like deepening and maintenance of port channels, construction of breakwaters, rail and road connectivity from ports to hinterland, etc. Private investment will be in the areas where operations are primarily commercial in nature like construction, management and operation of berths/terminals in the various ports.
Tsunami Relief and Rehabilitation
The Tsunami tragedy that struck India on December 26, 2004 caused unprecedented damage to lives and property including port and shipping infrastructure. Organisations of the Ministry reported loss of 22 lives (1 of Andaman Lakshadweep Harbour Works and 21 from Directorate General of Lighthouses & Lightships). Maximum damage was sustained in Andaman and Nicobar Islands.
Immediate arrangements were made for coordinated movement of relief material after the Tsunami tragedy. Over 80 voyages of ships have carried 21,580 tonnes of relief and reconstruction material from the mainland (Vizag/Chennai/Kolkata) to A&N islands till the end of April 2005. In order to cope up with the situation, the Ministry took immediate steps for acquisition of: six Pontoons of 10m x 6m at an estimated cost of Rs.2.78 crore from Hindustan Shipyard Ltd., four utility launches of 12m at an estimated cost of Rs.222.5 lakh each from Hindustan Shipyard Ltd. and two LCA type crafts at an estimated cost of Rs.5.00 crore from M/s Garden Reach Shipyard Ltd. An amount of Rs. 53.49 crore was donated to the Prime Minister's Relief Fund by organisations under the Department of Shipping.
Sethusamudram Ship Channel Project put on fast track
India does not have a continuous navigable route around the peninsula within her own territorial waters. Sethusamudram Ship Channel Project envisages cutting of a ship channel to connect the Gulf of Mannar and the Bay of Bengal so that most of the ships, depending on draught required, moving between east and west coast of India can have a continuous navigable sea route around the Peninsula within India's own territorial waters. This will save up to 424 nautical miles and up to 30 hours of sailing time for ships, through Palk Bay and Palk Strait. Besides, the channel can also be used by Naval and Coast Guard ships, thereby addressing the security concerns of the country.
Several proposals for dredging the ship channel to link the Gulf of Mannar with the Palk Bay had been formulated and many Committees were set up by the Government from time to time. The recent initiative for the project was taken when National Environmental Engineering Research Institute (NEERI), Nagpur was assigned the task of undertaking two studies, namely, (i) to establish the techno-economic viability of the project; and (ii) to asses the impact on environment on the construction of ship canal in the year 2002, for which reports have already been submitted by NEERI in July, 2004.
A Special Purpose Vehicle (SPV) by name and style 'Sethusamudram Corporation Limited' to raise finance and to undertake such other activities as may be necessary to facilitate creation and operation of a navigable channel from the Gulf of Mannar to the Bay of Bengal through the Palk Bay, or, for any other project in the port sector has been formed. The participants to the SPV are the Major Ports of Tuticorin, Chennai, Paradip, Visakhapatnam and Ennore, besides Shipping Corporation of India and Dredging Corporation of India.
The Environmental Clearance to the Project has been received from Ministry of Environment and Forests on March 31, 2005. Meeting of Public Investment Board (PIB) was held on April 13, 2005, wherein the Project was recommended for consideration by the competent authority at an estimated cost of Rs. 2,427.40 crore.
International Container Transshipment Terminal at Cochin Port
The Cabinet Committee on Economic Affairs approved the revised proposal for time bound implementation of International Container Transshipment Terminal (ICTT) project at Cochin Port on January 13, 2005. The approval cleared the way for award of contract for development, management and operation of the project on Build, Operate and Transfer (BOT) basis to M/s Dubai Port International, Dubai (DPI). The Cochin Port Trust has signed a Licence Agreement with India Gateway Terminal Pvt. Ltd., a subsidiary of DPI on January 31, 2005. The agreement envisages that initially DPI will take over the Rajiv Gandhi Container Terminal (RGCT) that is already under operation, from Cochin Port Trust and thereafter will migrate to ICTT on it becoming operational. The Port Trust will provide road and rail connectivity to the ICTT project site, obtain environmental clearance for the project and get the project site declared as Special Economic Zone (SEZ). Port Trust will also have to deepen the channel so as to receive ships of large size and steps are being taken in this regard. The Ministry of Commerce and Industry has already agreed to the declaration of the ICTT site as a Special Economic Zone.
The Prime Minister laid the foundation stone for the project on February 16, 2005. A tripartite Agreement between all labour unions, Cochin Port Trust and India Gateway Terminal Pvt. Ltd. was also signed on March 20, 2005. Cochin Port Trust has already handed over RGCT to the BOT operator on April 1, 2005. On completion, the terminal will have capacity to handle three million Twenty Feet Equivalent (TEUs) of container traffic.
Third Container Terminal at Jawaharlal Nehru Port approved
The Government approved the proposal for award of contract for the redevelopment of Bulk Terminal into Container Terminal project on BOT basis on June 22, 2004. The Jawaharlal Nehru Port Trust has signed the License Agreement on August 10, 2004 with Gateway Terminals India Pvt. Ltd., a joint venture company formed by Maersk A/S-CONCOR Consortium. The container terminal is expected to be operational in 24 months. This will be the third container terminal at Jawaharlal Nehru Port. On completion, the terminal will have capacity to handle about 1.3 million TEUs of container traffic per annum, thus adding substantially to the capacity of the port.
Guidelines for regulation of tariff
The Tariff Authority of Major Ports (TAMP) constituted in April, 1997 under the Major Port Trusts Act, 1963 is an autonomous statutory body for fixing and revising port tariffs and Scale of Rates in major ports. The tariffs fixed by TAMP act as ceilings.
To determine normative level of cost and investments for different port operations, TAMP has constituted a Working Group on normative cost based tariff for container related charges. The report of the Group is awaited. The guidelines for regulation of tariff by TAMP have been revised and issued.
Second Container Terminal at Chennai and Tuticorin Ports
On March 31, 2005, the Ministry has given in-principal approval for construction of the second Container Terminal at Chennai Port on BOT basis at an estimated cost of Rs. 495 crore. The Ministry has also approved construction of the second Container Terminal at Tuticorin Port on BOT basis at an estimated cost of Rs. 150 crore.
Ennore Port
Since the new Government assumed charge, the Ennore Port has constructed additional temporary facilities to handle iron ore utilizing the existing infrastructure. License has been granted for development of a three MTPA Marine Liquid Terminal at an estimated cost of Rs.200 crore on a Build Operate Transfer basis. ‘In-principle’ approval of the government conveyed to Ennore Port Limited (EPL) for equity participation in the Ennore SEZ Co. Ltd., which is developing a special Economic Zone adjacent to the Port. ‘In-principle’ approval for the first phase of the capital dredging project mooted by EPL has been conveyed. Under this scheme EPL would provide the requisite depth for marine liquid, coal and container terminals to accommodate vessels up to a maximum draught of 13.50 m. The Port would meet this expenditure out of its internal resources and through external borrowings.
Tonnage Tax introduced
As announced by the Finance Minister in Parliament on July 8, 2004, the Government has rationalised the fiscal regime for the Indian shipping industry by introducing Tonnage Tax system from the financial year 2004-05 in order to provide a level playing field vis-à-vis international shipping companies and to facilitate the growth of Indian tonnage.
In response to introduction of Tonnage Tax regime and also due to current shipping boom, Indian Tonnage has steadily grown in the last six months. Indian tonnage as on June 1, 2004 was 7.05 million Gross Tonnage (GT), which has increased to 8.01 million GT as on April 1, 2005. The Dredgers have been also included in the Tonnage Tax regime as per the Finance Bill 2005-06.
Record Traffic handled at major Ports
The twelve major Ports in the country handled 383.77 Million Tonnes (MT) of traffic from April 2004 to March 2005, recording a growth of 11.3 per cent over 2003-04. This is the highest growth achieved by major Ports during the last decade. In fact, all major Ports have recorded positive growth during 2004-05 over previous year’s performance.
Record profit of SCI
Shipping Corporation of India (SCI), a Public Sector Undertaking, has registered a profit of Rs.809 crore in the first nine month of the financial year (2004-05). One LR-I Crude oil Tanker and One Very Large CrudeCarrier (VLCC) have been inducted in the fleet of SCI during 2004-05.
Revival of Ports
As per the National Common Minimum Programme (NCMP) of the Government, it has been decided to revive the Hindustan Shipyard Ltd., Vishakhapatnam and the Hoogly Dock & Port Engineers Ltd., Kolkata. The process of revival has since been initiated.
LNG Shipping
The Ministry is considering formulation of an independent LNG shipping policy in order to develop LNG shipping in India. In order to develop LNG Tonnage under the Indian Flag, guidelines for grant of licence to LNG vessels have been issued.
Setting up of Indian Maritime University (IMU)
In view of India's leading position as merchant navy supplier to global needs and the stiff challenge faced by India from South Eastern countries like Philippines and China, an Expert Committee including representatives of University Grants Commission has recommended formation of an Indian Maritime University (IMU) by an Act of Parliament. As a consequence to this, a draft IMU Bill has been drafted. The details regarding financial implications are being worked out to set up IMU in the near future.
Formulation of Cruise Shipping Policy in India
A High Power Steering Group under the Chairmanship of Union Minster of Shipping, Road Transport and Highways with Union Minister of State for Tourism as Co-Chairperson has been set up on Sept. 29, 2004. The first Meeting of this Group was held on December 14, 2004 in which the draft Concept and Policy Paper for Cruise Shipping in India was discussed at length. Various issues concerning this sector have been taken up for facilitating the growth of this sector. The draft policy paper has also been deliberated by the Consultative Committee of the Ministry. A Workshop was also convened in Mumbai on February 12, 2005 which was attended by Members of the Consultative Committee, various stakeholders, hospitality industry, shipping lines, cruise lines, tour operators and shipping agents.
As a sequel to these efforts, the final policy will soon come into existence. Some cruise lines like Star Cruise India and Ocean Cruise are going to start their tour packages in coming months.
Seafarers' Identity Document
The Ministry of Labour has got the ILO Convention No.108 concerning Seafarers’ Identity Document ratified on December 22, 2004. Ratification of the Convention enables Indian seafarers, holding a valid Seafarers' Identity Document, to enter or transit those countries that have ratified this convention without passport/visa.
Admirality Bill 2005
Admirality Bill, 2005 is to be introduced in the Parliament. This will replace the 145 years old existing laws on the subject. With this enactment, the powers of settlement of various maritime disputes shall be facilitated. These rules will help the Government to control and regulate the recruitment and placement service providers, thereby curbing the exploitation of seafarers during employment.
Cochin Shipyard
On April 11, 2005, the Minister of Shipping, Road Transport and Higheways, Thiru T. R. Baalu performed the steel cutting ceremony for the first indigenous aircraft carrier for the Indian Navy, to be built by the Cochin Shipyard Limited (CSL). The aircraft carrier would have a deep displacement of 37,500 T and would be the largest ship ever to be built in the country.
Besides this, the order book position of CSL at present amounts to Rs.953 crore which consists of five Tug boats, six Bulk Carriers and four Platform Supply Vessels.
Hindustan Shipyard Ltd. (HSL)
HSL took advantage of the boom in the shipbuilding industry and has entered into a contract in May, 2004 with M/s Goodearth Maritime Limited, Chennai, for construction of two Bulk Carriers at a contract price of US $ 35,028,000/-. This was the first major Shipbuilding order secured by HSL after a gap of more than a decade. The contract also had the option clause for two more vessels. This option clause has been made effective by entering into another contract in January 2005 for construction of two more Bulk Carriers. Again in April 2005, HSL has been able to sign another contract with the same company for construction of six Bulk Carriers at a total price of US$ 153,181,800/-. In addition to this, HSL has also secured an order from National Institute of Ocean Technology (NIOT) on for construction of one Buoy Tender cum Research vessel at a contract price of Rs.21.99 crore.
Hoogly Dock and Port Engineers Ltd.
Hoogly Dock and Port Engineers Ltd. has delivered 400 passenger cum 100 ton cargo vessel ‘m.v. KALIGHAT’ to Andaman and Nicobar Administration in the first week of April 2005.
Development of Inland Water Transport
Despite being an eco-friendly, cost effective and fuel-efficient mode, Inland Water Transport (IWT) carries only 0.15 per cent of the total inland cargo throughput. There are three National Waterways (NW) namely; Ganga, Brahmaputra and West Coast Canal having a total length of approximately 2,700 km.
Action has been taken to declare three new Waterways as National Waterways, namely Kakinada-Pondicherry canal system integrated wit Godavari and Krishna rivers (1095 km) in the states of Andhra Pradesh and Tamil Nadu, East Coast Canal from Paradip to Haldia (623 km) integrated with the Brahmani river and the Mahanadi river delta in the state of Orissa and West of Bengal, and the Barak river from Karimganj to Lakhipur (140 km) in the state of Assam.
Six permanent terminals have been constructed and commissioned on NW-3. The construction of a permanent terminal capable of handling containers is nearing completion at Patna at a cost of Rs.25.50 crore. This will be the first terminal of its kind. Similar terminal at a cost of Rs.30 crore is under construction at Pandu on National Waterway-2. Container handling cranes for terminals at Patna and Pandu are likely to be commissioned in 2005. Under Centrally Sponsored Scheme, seven projects of State Governments have been sanctioned during the year 2004-05 and an amount of Rs.16 crore has been released to the State Governments against the projects sanctioned during 2003-2004 and during 2004-05.
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RK:LV
PIB SF-40 (15.5.2005)
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