Wednesday, October 28, 2015

Port Wings Editorial: Apple Import Restrictions Put India in the Dock in WTO


Port Wings, October 28, 2015

As anticipated, members in the World Trade Organization put Government of India in the dock on the latter’s decision to restrict import of apples to only one port against a dozen located on West Coast as well as in East Coast of the sprawling country.

Even though the Indian representative successfully defended the move by banking on the very statute meant for global trade, where there is no ban on restricting movement of any goods to only one port of the WTO member country, the defence may be satisfying to the others at WTO but relatively failed to bring cheer among the importers back home.

India also defended the move by saying that the measure does not fall within the definition of an import licensing measure under the Agreement on Import Licensing Procedures and thus is not fit for discussion under the WTO Committee.

However, the Directorate General of Foreign Trade under the Ministry of Commerce is duty bound to explain to the consumers of imported apples, if not for the importers, on what grounds the decision of restriction on apple import has been arrived.

Despite defending it hollowly at the WTO on the issue, continuing delay from the government on categorically revealing the real reasons behind the sudden restriction leaves options for different interpretation of its intention.

While a section of trade feels it was an act of protectionism by the Modi-led Government to secure local market access for home-grown apples, another group feels it was done in a hastily manner to help a particular player who wants to control the country’s apple market.

Whatever said and done, it is in crystal clear terms that the apple production in home is able to fulfill only 50 % of consumption and the remaining are managed by imports from various countries including the USA, Australia and New Zealand.

And that’s why, these countries vociferously objected to the DGFT’s latest decision to restrict apple imports by terming that the measure has had an impact on trade.

Moreover, after the restriction of import of apples, the cost of Indian apples are likely to increase on par with the imported ones in the areas like Southern India, where the logistics cost to move apples from growing states that are in North India is almost same as importing them from other countries.

So, the government, which has been so far keeping mum on the issue despite demands to disclose the real reasons from different quarters, has to make it clear what it wants. It is time to understand the Newton’s third law which says --For every action, there is an equal and opposite reaction. India has already acted and this time, reactions may be from USA, Australia and EU nations, where India is exporting various goods.

Colachel Port Project Takes Wings

Port Wings News Network:
With the Tamil Nadu State Government giving its nod to develop the Colachel minor harbour in Kanyakumari district into a Major Transshipment Port few weeks ago, the Ministry of Shipping has accelerated its process to convert the mammoth project into a reality in a shortest possible time.
Dr. Alok Srivastava, Additional Secretary, Ministry of Shipping
Dr. Alok Srivastava, Additional Secretary, Ministry of Shipping
In an exclusive chat with Port Wings on the sidelines of an event in Chennai recently, Dr. Alok Srivastava, Additional Secretary, Ministry of Shipping, said that the (Shipping) Ministry is moving ahead in an unprecedented pace to make the port project a reality.
“We have already called for Consultants for Preparation of Detailed Project Report for Development of Colachel Port. Once the DPR is in our hands, which is expected in about six months time, we will move ahead with the next stage of the project, where we would be finalizing the financial parameters,” Dr Srivastava told Port Wings.
It may be noted that the Ministry of Shipping has already completed the pre-feasibility study of the mammoth port project and said to be convinced with the projections underscored in the report on its potential.
Dr Srivastava stated: “As for as the investment ratio for the project is concerned, Union Government (Shipping Ministry) would hold 76 % share and the rest will be for the State government of Tamil Nadu. In that 76 %, we would pool in funds from the profit making major ports to contribute towards the project.”
Colachel minor harbour in Southern Tamil Nadu is strategically located in southwest coast of Peninsular India along the world’s busiest shipping route that pass from Europe, Gulf Countries, North Africa etc. through Suez Canal to China, Japan and Pacific Ocean countries.
It may be noted that the harbour is the deepest natural Port in the country with sufficient draft to host the latest 18,000-TEU vessels.
Moreover, Colachel Harbour’s geographical location is ideal to become a major transshipment port for the country as it is located in the right place to cater major ports like Cochin, New Mangalore, Mormugoa , Mumbai, JNPT in the West coast and V O Chidambaranar (Tuticorin), Chennai, Visakhapatnam , Paradip and Kolkata in Eastern side.
In 1995, the Tamil State Government engaged the Tamil Nadu Corporation for Industrial Infrastructure Development (TACID) to conduct feasibility study on Colachel Harbour and the agency submitted a favourable report to Government.
Again, in the instructions of Tamil Nadu Government a Malaysian Port construction Company in 2001 conducted an exhaustive feasibility study on development of Colachel as major transit port for the country and also proposed development of railway and road network around Colachel Port. Besides, the agency also submitted report indicating high economic potential for development of Colachel as Major Port in the interest of the country.

For all these years, containers originating from the country and bound for far away ports in USA, Europe and Australia are using Colombo, Singapore and Jebel Ali (Dubai) ports for transshipment in the absence of direct services as well as draft limitations for hosting larger vessels.


According to maritime experts, if the Colachel Port is developed as envisaged as the country’s major transshipment terminal, it will not only reduce the cost for the EXIM trade, but also help the country to save millions of dollars of foreign exchange now doled out as transshipment costs in those ports. Furthermore, the port may play a vital role in promoting coastal movement of containers meant to be transshipped via Colachel thus reducing pressure on road mode. 

Friday, October 23, 2015

Chennai Port’s proposed World-class Coal Handling Facility hangs in balance


Port Wings News Network:

Chennai Port’s proposal to have a world-class Coal Handling Facility before the Supreme Court hangs in balance as the next hearing is slated to begin in November.
According to sources, the proposal, submitted by the port management, is fully backed by the Government of Tamil Nadu and Indian Railways for the business opportunity as well as long-term energy security to the state.

Chennai Port was handling about 10 Million Tonnes of coal per annum at JD(East) Berths until the High Court of Madras vide Its Order in May, 2011, imposed a ban on handling dusty cargoes including coal at Chennai Port from October 2011. The Port has suffered a loss of cargo of about 18 Million Tonnes comprising Iron Ore and Coal.
With the ban in Chennai Port, other ports in the vicinity including the private ports located in Andhra Pradesh and Puducherry have garnered the share of the port. 
As the port’s revenue was dwindling away, the port management decided to move the higher court with a proposal to restart the coal movement via Chennai with modern and globally accepted non-polluting methods.
Thereafter, the Port filed an affidavit in the Supreme Court in response to the Order of the High Court of Madras. While considering the plea of the Port, the Supreme Court constituted the Empowered Committee in April 2012 and directed the Committee to examine the stand of the Chennai Port as per their affidavit. The Empowered Committee then directed the Technical Sub-Committee to look into the issues raised by the ChPT in the affidavit and submit a factual report.
In the report, it was pointed out that there is no scope for retaining the operation of dusty cargo in Chennai Port. However, during the hearing of Special Leave Petition in March this year, the Supreme Court heard the Appeal and asked the port to submit a fresh proposal to handle coal within the stringent environmental conditions.

According to sources, if the Supreme Court is impressed with the proposal of the Chennai Port to handle coal in unique as well as non-polluting way, the Court may give its nod to restart coal operations in Chennai that was stopped more than four years ago.
According to sources in the port, the proposed system is envisaged in line with the best practices across globe in city ports such as Rotterdam, Hamburg and Hamburg. Besides, the port also imbibed Indian best practices from JSW Jaigarh Port and new Adani Terminal at Mormugao Port. It may be noted that Rotterdam manages 42 MT coal, close to the residential colonies and operating under more stringent environmental norms.
Speaking to Port Wings, a senior official from the port said, “Under the new proposal, coal would be handled strictly through closed conveyor system. For evacuation of coal, Railway wagons would be utilized fully and there won’t be any trucking.
The port also proposes to have a strong monitoring and feedback system. In line with the best practices in the world and said to be the first of its kind in the country, the port proposes to have “auto-cut feature,”  real-time monitoring at 12 locations with results displayed at key locations and E-nose system.
It may be noted that if the Supreme Court allows the coal handling at the Chennai Port, the Tamil Nadu Pollution Control Board (TNPCB) has committed to appoint an Assistant Environmental Engineer for monitoring environmental parameters exclusively at the port.
According to official sources, the port, which is suffering decline in throughput and reduced asset utilization, with coal operations will be able to meet long term pension commitments.
According to industry sources, the chances of restarting coal handling at Chennai Port is bright as the port management seems to presented a new proposal based on global best practices. Now it remains to see, whether the Apex Court is impressed with the Port’s proposal and gives its nod to restart coal handling soon.
On the other hand, the port management is gearing up to meet any condition may be put forward by the Supreme Court as a rider for the proposal.

Wednesday, October 21, 2015

Port Wings Editorial: Bleeding Exports Send Warning Signals

Port Wings, Oct 21, 2015:

For the tenth month in a row, India’s merchandise exports and imports have recorded its steepest downward trend.

Though the message is clear and loud, and situation in exim sector is turning from bad to worse, the government machinery is still in deep slumber.

In other words, the promising words of the Prime Minister Narendra Modi, Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman on different podiums both in the country as well as in overseas on ensuring better trade atmosphere, seems to be just words without corroborating actions.

More specifically, in the past six months, our exports are declining on a rate that never been expected by the market analysts and trade pundits. The latest one in September – about 25 % -- is not only shocking to the entire trade community, but also bares the promises of government is aware of the fact and taking actions.

The trade community feels let off by the Modi-led government and there has been a sense of outrage against the Government for its vision-less as well as crooked economic policies that has landed them in a pool of uncertainties.

Every other organizations, be it FIEO or other trade associations, were appealing to the authorities concerned for the past 10 months to take corrective measures and bring the confidence back among the trade. However, nothing seems to be working in favour of the Indian exporters and they are now left to fight for their own for survival in the unknown territory.

With the trade data descending into negative trajectory for the past 10 months, the Modi-led NDA Government have an onerous task of bringing back the exports in positive trajectory to make the MAKE IN INDIA project a reality.
Though the season of festival in the country has just began, the condition of exporters is worse than  traders now and the expectation is high among them that the government will take some corrective measure soon on war-footing to stop the negative trend.
If the government fails again and the same trend continues for some more months, not only the exim trade will be in doldrums but the whole country.
Moreover, the election festival will begin in April next year and the Union Government will be in a delicate position to talk on any economic reforms without performing on this front. The trade community in the country likes to see a government of action than just words at the Centre.

Wednesday, October 14, 2015

Editorial: Modi Ji, Concentrate on Economy, other issues can wait


Port Wings, Oct 14, 2015:
Prime Minister Narendra Modi during his aggressive election campaign in 2014 often repeated before the crowd that his experience in governance in State of Gujarat would help to ensure good governance in Union Government as well as to ensure India is back on its feet as a global economic power.
However, 16 months have passed by now and there is not a single sign of utilization of Gujarat experience has seen anywhere from the Modi-led Government as for as the economic affairs are concerned, as EXIM figures falling continuously without any support from the government.
On the other hand, Modi’s Gujarat experience seems to be got its way into New Delhi’s policies as a few pointers like cow-slaughter issues, beef ban, Hindification of India and saffronisation of education system are clearly indicating what is the Modi-Government’s priorities at the Centre now.
Well, these planks are the well-known facets of the organization, which gave birth to BJP and fed the party until now to accomplish its unfinished agendas in the country. But the voters, who selected the party and elected Mr Narendra Modi lead the nation last year, has had their hopes pinned on him as his speeches inspired them a lot.
But to their dismay, the economy is running on its own and the Modi government is still unable to identify the black holes in the system and rectify it before they attain a monstrous proportion thus bringing down the entire financial system of the country.
Even though the reports on EXIM merchandise month after month has been clearly indicating the need for urgent response from the government, nothing as concrete as actions moved beyond the board rooms of the government offices.
At this critical juncture, where the government’s priority has to be on bringing back the economy on track, Modi-led government is busy playing to the gallery.
Furthermore, the Modi government’s general image of being pro-corporate and pro-capitalist has also suffered very badly of late as the very corporate world, except a few, seems disappointed with him and his way of treating the elite herd.
Corporate honchos, who were among his team of cheerleaders in his initial months, are now openly speaking about how the Modi government lost its sheen over the period.
They openly blame the government is not helping the corporate world with tax reliefs neither is it making good on its promise of delivering.
Furthermore, the disappointment, which runs deep within the corporate world as well as among the start-ups too, has a cascading effect on the already fragile economy.
So, the time has come for the Modi-led government to turn its full focus towards bringing back economy on track than spending more time to non-issues like beef-ban and so on. 

Saturday, October 3, 2015



Port Wings News Network:

Signaling the arrival in Chennai’s EXIM trade map, Adani Group, headed by Mr Gautam Adani, has taken over the Kattupalli International Container Terminal (KICT), promoted by engineering major Larsen & Toubro at Kattupalli Port in Tamil Nadu.
According to highly placed sources, a team from Adani Ports and Special Economic Zone (APSEZ) taken over the day-to-day management of KICT  under “Operations and Maintenance”  concept with effect from Oct 01 from L&T team at the port.

According to a BSE filing on Oct 1, Adani Ports (Adani) announced that it has entered into a non-binding Memorandum of Understanding with L&T Shipbuilding (L&T) for evaluating the operations of the Port at Kattupalli, Tamil Nadu, with effect from October 2015 for one month.

It’s worth mentioning here that Port Wings in July had published the news of possible taking over of KICT management from L&T in next few months.
According to details available, Mr G J Rao, Director at Adani Ports and SEZ Ltd is most likely to be appointed as head of KICT.
It may be noted that Mr G J Rao had held top positions in Union-Govt’s major ports like, Chennai, Tuticorin and Paradip before joining the Adani Group.

Furthermore, sources added that the existing L&T Ports staff are most likely to be retained in their same positions until the new set up comes in place in coming weeks.
Eventhough rumours were flying thick for last six months, the news of Adani’s possible taking over of Kattupalli Terminal gained ground only in July when the officials of Adani Group and L&T had jointly organized a reefer trade meet  in Chennai and sought the trade’s “support.”

Kattupalli Port is promoted by L&T Ports, a division of L&T Shipbuilding Limited, a joint venture company formed by Larsen & Toubro Limited and Government of Tamil Nadu’s trade arm Tamil Nadu Industrial Development Corporation Limited (TIDCO).  While the L&T holds 97 % in the shipyard cum port complex project, Tamil Nadu Government (through TIDCO) holds 3 % share.

For Adani Group, which wants to strengthen its presence in the East Coast, the taking over of L&T’s container terminal, located within a few kilometers distance from its own project, a container terminal (now in construction phase) at Kamarajar Port (erstwhile Ennore Port), could help to secure calling of vessels (mainline, feeder and coastal) from the day one of its operation.
According to sources, Adani Group, with KICT in its kitty, could project both the terminals as a largest hub for containers in East Coast. Sources say that Adani Group plans to project both the terminals as “Mundra of East Coast.”
It may be noted that Adani Group recently got the Vizhinjam port project in Kerala and in 2014, Adani acquired Dhamra Port in Odisha from Tata Steel and L&T for an estimated Rs 5,500 crore.