Logistics

JN port terminal plans yet to dock

OUR BUREAUS | Updated on August 21, 2011

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It must be at least five years since the proposal was first mooted for a 4.8 million teu fourth container terminal at Jawaharlal Nehru port. But the project is yet to see the light of the day. First, the decision-making process has been tardy, and then there were court cases. A Danish shipping giant, already active in one of the terminals in the same port in partnership with Container Corporation of India, had gone to court protesting against its exclusion from bidding.

The matter went up to the Supreme Court and the company won the case after fighting for two years. Interestingly, it decided not to bid after winning the case. Adani Enterprises, another bidder, also went to court as it was denied security clearance. But the company subsequently withdrew the case. PSA International, in partnership with ABG Ports, won the bid after offering 51 per cent by way of revenue-sharing, the highest in the country.

Yet it is not clear when the contract will be awarded. A senior bureaucrat in the Shipping Ministry was quoted as saying about a month ago that the contract would be awarded shortly. Nothing has happened. Reports have it that Jawaharlal Nehru Port Trust has constituted a committee to evaluate the performance of the consortium partners in other ports before signing the concession agreement. May be the stage is being set for further delay?

‘Crisis will not box in freight'

A recent analysis in Transport Intelligence gives 10 reasons why the financial crisis won't impact the global freight industry. First, the underlying global economy is not as bad as is being made out. Second, the falling share prices of major listed transport and logistics companies do not reflect the firms' strengths. The top 10 logistics firms are in good health. Third, there is a slowdown in air and sea traffic volumes but not a dip. Fourth, the impact of the tsunami in Japan is petering out. Supply chain, affected after the tsunami hit auto production all over the world, is returning to normal. Fifth, semiconductor production, a traditional bellwether of air cargo growth, remains strong. Sixth, stable or falling oil prices. Seventh, low interest rates look set to remain the norm, stimulating not only borrowing, capital investment and growth but also helping out the more leveraged transportation companies. Eighth, ocean shipping rates have stabilised. Although nobody expects a stellar peak shipping season, it looks like volumes have been robust enough to allow shipping lines to pass on rate rises. Ninth, more mergers and acquisitions. The low share prices of many listed companies may make them vulnerable to takeovers with private equity companies and trade buyers waiting in the wings. Finally, freight forwarding gross margins are up. The falling sea and air rates have helped push up forwarders' gross margins. These look likely to remain high with significant new shipping capacity set to enter the market.

Court reprieve for Bangla ship-breakers

Ship-breakers in Bangladesh are believed to have got a reprieve following a Court order allowing them to operate until at least October 12. The country's apex court has upheld the High Court's ruling which extended the deadline for compliance with safety and environmental rules. The Bangladesh Environmental Lawyers Association had challenged the lower Court's earlier ruling that the breakers could continue operating after July 7, when an earlier two-month extension expired. The association had sought a year-long ban on breaking, pointing out that the yards were too dangerous for workers and it would be too costly for the environment until safety changes are in place. The ban was lifted after the industry agreed to protect workers by complying with a minimum age limit (18), training and proper safety gear.

Published on August 21, 2011

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