Shipping

Hambantota Port strategically important to Sri Lanka

SANJEEVI Jayasuriya

The construction of the Hambantota Port is strategically important to Sri Lanka as the country would be in a position to handle general cargo and the repair work speedily and concentrate on container handling at the Colombo Port, Chairman, Ceylon Association for Ships' Agents (CASA) Capt. Ajith Peiris said.

The ship repair facility between Singapore and Dubai is insufficient and we could give priority for this at the Hambantota Port. This will also avoid unnecessary delays for ships calling at the Colombo Port for repairs. We are confident that the construction of the Hambantota Port could be completed by the last quarter of 2010, he said.

The global downturn affected economies and shipping lines too were affected. However, we are hopeful that the traffic will increase in the near future as certain segments are already showing an improvement. We need to be geared to face this volume and consolidate our position, he said.

It is time to look for other avenues to generate revenue. One possible solution is to branch out. This will compensate the losses. We need to look for business opportunities to venture out. This sort of strategy is better than waiting for things to happen. Diversity is the best way to cover losses, he said.

We hope that the downward trend will not be further affected and will improve in time to come. Asia will prosper after the recession much faster than the West, but we need the West also to do well as we need them for commercial dealings. If there is a no-taker our products and services could not be sold, he said.

The shipping industry will remain one of the dominant industries in our country as it plays a vital role in cargo transportation. We are quite impressed with the progress of construction work of the Hambantota Port and with its completion the country is poised to handle an increased volume of cargo and containers, he said.

NMDP aims at holistic growth in shipping industry

The Government has taken steps for the growth of Indian tonnage.

The Government of India has formulated the National Maritime Development Program (NMDP). It is a comprehensive program aimed at various issues that need to be addressed to bring a holistic growth in the Indian shipping industry. Under the NMDP, the Shipping Corporation of India, the only public sector shipping company is in the process of acquiring 76 new vessels with an outlay of Rs. 15,000 crores, to be completed in phases till the end 2011-12. Of these, six ships have already been delivered, orders have been placed to construct 30 vessels and the remaining 40 vessels are planned for acquisition during the remaining 11th plan period.

The Government has introduced a tonnage tax regime in India since 2004 by which the tax outgo for Indian Shipping companies has been brought in the line with the international standard. The liberalized policy on ship acquisition has been introduced and the acquisition of all types of ships has been brought under the Open General Licence (OGL). Besides, 100 percent FDI has been permitted in ship acquisition and registration formalities of newly acquired ships have been simplified.

The Government is not committed to providing a soft loan for acquisition of ships in the liberalization era, on account of the current financial meltdown at the request of Ministry of Shipping and at the behest of the Finance Ministry, the Indian Banks' Association had constituted a Working Group to examine the proposed extension of credit facilities to shipping companies in India to purchase ships.

The Indian Banks' Association has however, recently advised that they have no role to play in the matter and

the Shipping Company should take up the matter with the individual banks. PBI

LPG Carrier 'Oriental Oki' for drydock repairs

The LPG Carrier Oriental Oki managed by Kyowa Sansho Co. Ltd Japan called for routine drydock repairs during early July at the Colombo Dockyard PLC.

The 2006 built gas tanker called for first drydocking. The repair scope consisted surface preparation and coating, overhauling of generators, main engine inspection, shaft seal vulcanising, steel renewal/strengthening of touch area and repairs to both hose handling cranes.

The entire repair was completed successfully in seven days and the repairs were carried out in keeping with the requirements of Nippon Kaiji Kyokai. (NKK).

The attending superintendent T. Nishibayashi looked after the owner's interests during this call.

Colombo's faster turn around time and her strategic location and high service quality are some of the major aspects that attract many international ship owners to Sri Lanka. Husbanding work for this operation was handled by the local agents McLarens Shipping Ltd.

Shell charters new ship to carry Asian gasoil

The number of newly built tankers hired to ship Asian gasoil to Europe continues to swell, with Royal Dutch Shell PLC (RDSB) being the latest to take advantage of cheaper freight rates for maiden voyages.

Shell chartered the newly built Seamusic to carry 90,000 metric tons of ultra-low-sulfur gasoil from South Korea - with destination options that include Europe - around the end of July at a freight rate of about $1.7 million, shipbrokers said.

The trip is a spot voyage with no options for floating storage, a Singapore-based shipbroker said.

Shell declined to confirm the information, but a spokesman said the company charters vessels frequently.

Rising demand for off shore storage in tankers has limited the availability of vessels, lifting freight rates slightly and lowering margins for traders.

Freight rates for LR-2 tankers sailing from Singapore to the UK continental shelf were pegged at $1.8 million in the week to July 17, a 24 percent increase from early May, when the floating storage craze began, according to an analyst at shipbroker Simpson Spence and Young Ltd. LR-2's carry between 80,000 and 160,000 tons of products.

New builds are less expensive to hire because they have not been approved yet by oil majors to carry their products or dock at their terminals, the Singapore-based shipbroker said.

Also, new tankers destined to carry dirty products may offer a discount to transport clean products to initially get out west, a Europe-based shipbroker said.

Dirty products such as crude and fuel oil typically move west to east, making it difficult for a vessel built in Asia to find its first job, the shipbroker said. New tanks, however, haven't been contaminated and can store clean products without the need for a special coating.

At least four new builds have been heard fixed in July to carry Asian gasoil to Europe.

This includes the Valcona, which is being time chartered around August 1 by an unknown company to store 80,000 tons of South Korean gasoil off European shores at a freight rate of $16,000 a day, according to five shipbrokers.

Meanwhile, Shell is one of the more active companies shipping middle distillates to Europe from Asia in July, sending 195,000 tons of South Korean jet fuel to Europe this month

Dow Jones