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Indian ship owners, seafarers up in arms against new cabotage rules
Indian ship owners and seafarers working on different ships, are up in arms against Union Shipping Ministry's new regulation to allow foreign ships to operate in Indian waters without any pre-condition.
The National Union of Seafarers of India (NUSI) has already decided to launch an agitation, which would include steps like blockade of foreign ships in Indian waters, if this decision is not withdrawn by the Government.
NUSI and Maritime Union of India, in the memorandums, have urged Prime Minister Narendra Modi to save Indian flag ships from being wiped out and have also appealed to all Indian seafarers to send long entreaties to PMO, urging Modi and the Union Shipping Minister Nitin Gadkari to "re-consider" the decision and to desist from scrapping the Right of First Refusal (ROFR) given to Indian ships. Indian National Shipowners Association (INSA) has also opposed the move arguing that it would potentially undermine the position of the domestic shipping industry in coastal trading.
Shipping goods from one Indian port to another is known as "cabotage." It is governed by the Merchant Shipping Act 1958 (MSA). As per the earlier Indian Cabotage rules contained in sections 406 and 407 of the MSA, only Indian flagged vessels or vessels chartered by an Indian citizen or company, operating under a licence granted by the Director General of Shipping (DG, shipping), were allowed to carry cargo from one Indian port to another.
Earlier the foreign flagged vessels were permitted to carry cargo only if Indian flagged vessels were not available. That too if DG, shipping, received a no-objection certificate (NoC) from the Indian National Ship owners Association (INSA), a Mumbai-based trade association. However now this restriction has been relaxed and ships with foreign flags are required to only obtain a licence under Section 407 of the MSA to operate in Indian waters.
"This decision is likely to result in major gains for companies which own and operate private ports in India, which import coal and agricultural products. This is the latest move in a policy tussle going for many years and appears to tilt the balance in the shipping industry and the ports sector, hugely in favour of major multinational shipping lines and private port operators to the detriment of Indian shipping companies and government-run ports," a spokesman for NUSI said and added that due to this move, Indian ships will lose business and eventually "thousands of seafarers, who include officers, petty officers and ratings, will be rendered jobless".
"Indian companies borrow at 12-14% and the debt has a tenure of about seven years while foreign companies borrow from 0 to 2% for a period of 10-12 years. As such the per day repayment cost for Indian companies is much higher. Such a skewed borrowing cost makes services of foreign ships in coastal waters much more competitive than Indian-registered ships", sources said and added that in terms of fuel too, there is a cost advantage for the foreign ships. Foreign ships get fuel at cheaper prices in overseas ports while Indian ships pay 17-20% higher cost for fuel in Indian waters".
Most of the ports are also opposed to the change and JNPT has also expressed apprehension about the change. The main point of contention in the new rules relates to a stipulation that once cabotage relaxation is granted to an existing container handling port, it should be able to tranship at least 50% or more of the total containers handled during the first year. The new port would have to achieve this level in the second year after a gestation period of one year. Otherwise, the relaxation granted would be revoked and the port/s will not be considered again for such relaxation for the next three years.
But according to official sources in Union Shipping Ministry, the decision is part of India's plan to promote coastal shipping on major scale. At present only 100 million MT of cargo is moved along the Indian coast in India and 80% of it comprises petroleum products, coal and iron ore. A study by the Shipping Ministry has shown that coastal shipping could carry about 230-280 million tonnes per annum (MTPA) of coal, cement, iron and steel, food grains, fertilisers, petroleum, oil and lubricants, which could save Rs.21,000-27,000 crore by 2025. Besides, by easing cabotage regulations, India could attract more containerised cargo by reducing time and cost for mainline vessels that now trans-ship containers at neighbouring hub ports. It would eventually help India in building a successful trans-shipment hub.
There are over 1200 Indian merchant ships with about 10300 million MT total gross registered tonnage (GRT) and 14.500 million MT dead weight tonnage (DWT). India ranks 15th in the world in terms of total DWT. At present India supplies around 12.8% of officers and around 14.5% of ratings to the world seafaring community.
Nitin Gadkari to launch development projects at Vizag port today
Union Minister for Road Transport, Highways and Shipping Nitin Gadkari will launch various development projects under the Sagarmala and Bharatmala projects worth Rs 3,685.35 crore here today. The minister, who is here on a two-day visit for the annual review of the country's port sector as well as the Sagarmala and Bharatmala projects, will inaugurate two new post Panamax Rail-Mounted Quay Cranes and allied equipment at the Visakhapatnam Container Terminal Private Limited.
They have been installed at a cost of Rs 150 crore, according to Visakhapatnam Port Trust chairman M T Krishna Babu. Gadkari would also inaugurate the upgraded and modernised iron ore handling complex at VPT, built at a cost of Rs 580 crore under the public-private partnership model, the chairman said.
He would inaugurate a new fire station complex at VPT and a high-rise wall (to prevent pollution) and launch a 2,000 sapling plantation programme. This Rs 10.35-crore project is a part of the VPT's measures to curb air pollution.
The minister would later drive to Beach Road in Visakhapatnam city to lay the foundation stone for a Rs 549-crore four-lane road connectivity project to the Visakhapatnam Port. He would also lay the foundation stone for six-laning of Anandapuram-Anakapalle section of NH-16 that would cost Rs 2,013 crore.
Krishna Babu said Gadkari would inaugurate WQ 7 and 8 berths constructed at a cost of Rs 243 crore and inaugurate the expanded (two to four lane) stretch of port connectivity road (Rs 80 crore). He would also lay the foundation for a grade separator on the road that would cost Rs 60 crore. These three projects were being taken up by the VPT in a joint venture with the National Highways Authority of India, Krishna Babu added.
Shreyas Begins SSL Kolkata Counter Pollution, Salvage Ops
The counter pollution and salvage works for the fire-stricken merchant vessel SSL Kolkata have started, according to the ship s operator Shreyas Shipping and Logistics Limited.
The company said that a team from Oil Spill Response Limited (OSRL) has arrived on site and launched the process of managing the counter pollution response.
Additionally, salvage company SMIT Salvage mobilised its SMIT Borneo platform, which is currently en route to the casualty site to assist with remaining bunker, cargo, and debris removal operations.
MSC Cruises, Miami to Build New Cruise Terminal
Cruise liner MSC Cruises and Miami-Dade county reached a Memorandum of Understanding (MOU) for the construction of a new Cruise Terminal AAA at PortMiami.
The new terminal, which is expected to be completed by October 2022, will be able to accommodate MSC Cruises next-generation, still under construction MSC World Class cruise ships carrying up to 7,000 guests.
Hyundai Heavy Workers Strike amid Job Loss Fears
Around 300 of 12,000 unionized workers of Hyundai Heavy Industries Co. staged a partial strike on Friday in Ulsan to voice their dissatisfaction with the closing of the shipbuilder s offshore yard resulting in job loss. Union spokesman Kim Hyung-gyun, cited by Yonhap, explained that the strike was focused on job security.
Ocean Yield Secures USD 330 Mn of New Loans
Norwegian shipowner Ocean Yield signed several new loan agreements with a number of banks, totaling around 330 million, during the second quarter of 2018.
The company said that the new loans were signed for the long-term financing of recent investments, including two dry-bulk vessels, three Suezmaxes and two VLCC crude tankers.
As of quarter end some USD 265 million of this is undrawn, Ocean Yield said, adding that the loan facilities have maturities between five and seven years and are priced at attractive terms.
Wartsila Wins Scrubber Deal from European Boxship Owner
Finland-based technology group Wartsila received an EUR 170 million (USD 197.5 million) deal to provide hybrid exhaust gas cleaning equipment and retrofit services to a European container shipping company.
Wartsila Services will deliver 50 MW, 60 MW and 70 MW Wartsila hybrid scrubber systems which will be retrofitted to the company s container vessels. These are solutions which have the flexibility to operate in both open and closed loop.
Tanker disabled, anchored on St. Lawrence river
Product tanker EMANUELE S encountered mechanical problem on Jul 6, while proceeding upstream St. Lawrence river, according to AIS. The ship was brought to anchor and as of Jul 12 she was still at anchor in Beauharnois Canal below Larocque Bridge, Salaberry-de-Valleyfield. Reportedly, she s awaiting spare parts and technicians.
Cargo ship disabled, towed to port, Greece
General cargo ship TAXIARCHIS S reported engine failure in the morning Jul 11 north of Heraklion, Crete, Greece, and asked for assistance. The ship was towed to Heraklion, from where she started her journey. She was detained to fix engine and undergo inspection. On Jul 12 the ship was still at Heraklion.
Container ship aground?
Container ship ANGELES reportedly ran aground in Pierto Cortes harbor anchorage area, Honduras, Caribbean coast, at around 0800 UTC Jul 12, after being anchored for some 2-3 hours, without any recorded movement. Probably she drifted aground, or grounded while moving around at anchor, but there are no shallows in ship s vicinity, with depths varying from 25 to 35 meters. ANGELES arrived to Puerto Cortes from Puerto Barrios, Guatemala. Position doesn t change and as of 0330 UTC Jul 13 she still seems to be aground.
d Amico Sheds Its Oldest Product Tanker
Italy-based shipping company d Amico International Shipping has reached an agreement to sell its oldest handy product tanker vessel, the 2003-built MT Cielo di Milano.
Namely, the company s operating subsidiary d Amico Tankers (Ireland) signed a memorandum of agreement for the sale of the 40,081 dwt vessel for a consideration of USD 8.025 million.
The transaction allows d Amico Tankers to generate around USD 2.4 million in cash, net of commissions and reimbursement of the vessel s existing loan, contributing to its liquidity.
Giant LNG Carrier Handed Over to Flex LNG
Oslo-listed gas carrier owner Flex LNG has taken delivery of its 174,000 cbm newbuilding LNG carrier Flex Rainbow from Samsung Heavy Industries (SHI).
The newbuilding has secured employment with an unnamed European energy company for a fixed period of six months that can be extended for additional three months.
The large LNG carrier is fitted with fifth generation ME-GI machinery giving considerable fuel savings compared to traditional LNG carriers, according to its owner.
SHI Cuts Steel for Teekay Offshore s New Shuttle Tanker
First steel has been cut for Teekay Offshore s first of four shuttle tankers intended for operations in the North Sea. The steel cutting ceremony took place at the Samsung Heavy Industries (SHI) shipyard in Geoje, Korea on July 2.
The 130,000 dwt vessels will operate on both liquefied natural gas (LNG) as the primary fuel, and a mixture of LNG and recovered volatile organic compounds (VOCs) as a secondary fuel.
Norwegian Cruise Line Decides to Build Two More Leonardo Ships
Norwegian Cruise Line Holdings has confirmed its options for the fifth and sixth Project Leonardo Class ships to be built by Italian shipbuilder Fincantieri for Norwegian Cruise Line.
Scheduled for delivery in 2026 and 2027, the 140,000 gross ton newbuildings will be able to accommodate 3,300 passengers. The ships are part of a contract Norwegian Cruise Line signed with Fincantieri in 2017 for the construction of 4+2 cruise vessels.
PPA earmarks P7.1-billion this year for port development
State-run Philippine Ports Authority is spending P7.1 billion this year for the development of 46 ports nationwide.
PPA general manager Jay Daniel Santiago said the government was pouring in billions of pesos in the next five years to improve and modernize ports in the country.
"We have been injecting so much investment in our ports," Santiago said.
Eastern ports got 39% of dry cargoes in Q1 - Peterside
The Director-General, Nigerian Maritime Administration and Safety Agency, Dr Dakuku Peterside, has said that the eastern ports accounted for 39 per cent of dry cargo vessels in the first quarter of 2018.
He disclosed this in Calabar, Cross River State during the second stakeholders interactive session of the agency. He said over 5,000 vessels (both wet and dry cargo) called at the country s seven functional seaports annually.
British Ports Association welcomes trade facilitation focus of Brexit White Paper
The British Ports Association has welcomed the Government s Brexit White Paper which outlines the UK s aims for a future economic relationship with the EU. Included in the White Paper is the much publicised Facilitated Customs Arrangement which essentially enables the continued frictionless trade between the UK and the EU. Commenting on the developments the British Ports Association s Chief Executive, Richard Ballantyne said:
"It is clear that the Government has listened to businesses and ports as the revised Facilitated Customs Arrangement proposal will preserve the present free flowing of trade between the UK and the EU. If agreed, this concept would avoid the need for customs and other frontier checks and would ensure that borders remain fluid."