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 : info@amtoi.org

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