S O U T H A S I A M A R I T I M E & L O G I S T I C S S P E C I A L PAKISTAN BANGLADESH NEPAL PORTSCAN BHUTAN High
Hopes
on
CPEC Gearing
up
to
Ease
Unlocking Karaikal
Port
Land
of
Opportunities Congestion Inland
Waterways Reloded South Asia’s premier maritime business magazine `100

SEPTEMBER 2017 WWW.MARITIMEGATEWAY.COM

RNI NO: TELENG/2009/30633 POSTAL REGISTRATION NO: LII/RNP/HD/1137/2016-18 HARDWARE
IMPORTS: DATE OF PUBLICATION: 04/09/2017 DATE OF POSTING: 06/09/2017 Not
a
Soft
Issue

South Asian economies need to put a concerted effort to resolve logistics issues that could have interrelated angles rather than implementing isolated measures 02 MARITIME GATEWAY / SEPTEMBER 2017 Automate, connect and control with Cavotec’s inspired engineering.

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South Asia’s dominance in maritime trade

he Chinese flotilla skirting Bangladesh are gearing themselves up along the Indian Ocean Region to be windows to the Middle East and (IOR) intermittently and the East Asia. For these countries to grow US Navy’s presence in the in economic superiority, it is imperative For these countries T that they work together. This will lead Malacca Straits tells us this: the centre of gravity in world affairs has shifted to better regional stability and security. to grow in economic to Asia. And the IOR is the heart of all Each can play to its strengths and fall superiority, it is maritime trade and security. Geopolitics back on another for help in weaker is perhaps the biggest driver of sea and segments of trade. imperative that they land transportation sometimes uniting That many shipping lines have nations and sometimes leading them deepened their inland services work together. This adrift. investment in these countries is itself will lead to better The fight for dominance has led the reason to function as one big enterprise countries to develop new terminals, sharing the seas and the opportunity regional stability and expand existing ones and improve their to be regional superpowers. But India inland transportation. The importance and Sri Lanka have to tick a few boxes security. of the IOR in governing the high seas off before they can make a mark on has even led China and Japan to invest the world stage. Slashing logistics cost many infrastructure projects in three to a single digit and investing a few main maritime nations – India, Sri hundred million in improving its first Lanka and Pakistan. China’s interests and last-mile connectivity will improve in the Gwadar Port, the One Belt One efficiency and cost effectiveness of Road in Pakistan and its keenness in delivering cargo to and from the ports. developing the Hambantota port states Two challenges, however, stare at the the obvious. Bangladesh has made a face of these reforms. Funding and surprising entry developing new ports speed of execution. Ensuring local along its shores. 2017 has been an populations and governments are interesting year and so the next year will open to the major economic and social be something to look forward too. change will be key to the speed with If the past years have been an which the program moves towards its opportunity for each country to work objectives. in silos, the coming years present an opportunity to grow as a region. If India’s dominance is in the success of the Sagarmala programme, Sri Lanka’s R Ramprasad is in being the biggest transhipment Editor and Publisher hub of the region. Pakistan and [email protected] Editor and Publisher R Ramprasad [email protected]

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Maritime Gateway is printed by R Ramprasad Published at Gateway Media published by R Ramprasad on behalf of Pvt Ltd #407, 5th Floor, Pavani Plaza follow us on @maritimegateway Gateway Media Pvt Ltd, #407, Khairatabad, Hyderabad – 500 004 5th Floor, Pavani Plaza, Telangana, India Khairatabad, Hyderabad – 500 004, Telangana, India Regd. Office: H.No. 8-2-293/82/A/379 & 379/A, 2nd Floor, Plot No. 379, Road No. 10, Printed at M/s Kala Jyothi Process Pvt Ltd, Jubilee Hills, Hyderabad – 500 033. 1-1-60/5, RTC Cross Roads, Musheerabad, Hyderabad – 500 020. CIN: U74900TG2007PTC054344 Editor: R Ramprasad EDITORIAL ADVISORY BOARD Views expressed in the articles are those of the writer(s) and may not be shared by the Sabyasachi Hajara Anil Yendluri Manish Saigal editor or members of the editorial board. Former Chairman, SCI Director & CEO, Krishnapatnam Port MD, Alvarez & Marsal Unsolicited material will not be returned. Chairman Editorial Advisory Board Company Ltd Jasjit Sethi Joachim von der Heydt Adarsh Hegde CEO, TCI Supply Chain Solution Copyright Chairman, Bengal Tiger Line, Singapore Joint Managing Director, Allcargo Logistics Capt Dinesh Gautama No material published here should be re- Julian Michael Bevis President Senior Director, Group Relations, South Asia P Jairaj Kumar Navkar Corporation Limited produced in any form without prior written Chairman & MD, Ocean Sparkle Limited A.P.Moller-Maersk Capt Sanjeev Rishi permission from Gateway Media. Shardul Thacker Advisor Capt Deepak Tewari Partner Worlds Window Infrastructure & Logistics Pvt Ltd Feedback Chairman, Container Shipping Lines Association (CSLA) Mulla & Mulla & Craigie Blunt & Caroe Navin Passey Readers are advised to send all feedback and Anil Singh Dhruv Kotak Managing Director Sr VP & MD, DP World Subcontinent Director, JM Baxi Group Wallem Shipmanagement (India) Pvt Ltd comments to [email protected] CONTENTS VOLUME 9 | ISSUE 12 | SEPTEMBER 2017

28 40 INDIA NEPAL Focus on infrastructure Vying for the Nepal cargo Port infrastructure is being While Visakhapatnam Port is improved to support the growth attracting the Nepal cargo with in trade and promote coastal its efficient infrastructure, the shipping. Highways across Kolkata and Haldia Ports are also the length and breadth of the pulling up their socks to gain back country will strengthen last-mile the lost business. Meanwhile, connectivity. China through its One Belt, One Road initiative is trying to shift 29 the Nepal transit trade to itself. DATELINE SRI LANKA 42 Island in the ocean of MALDIVES INFRASTRUCTURE opportunity Expanding port capacity The challenge and the Imports are growing and the opportunity to the country is to primary port in Male’ has reached become a world class marine and its maximum capacity. Thus logistics centre for Asia. the focus is on expanding port needs to capacity, developing warehousing 30 and SEZs. SRI LANKA By investing in Sri Lanka’s 43 catch up maritime infrastructure and BHUTAN regional connectivity, India can Land of opportunities have a stake in the development FDI and PPP in infrastructure of South Asian maritime trade. projects are welcome in Bhutan. 32 44 BANGLADESH PORT OF ANTWERP Gearing up to ease Services customised for congestion pharma The Chittagong Port Authority The pharmaceutical industry is along with the Customs and steadily expanding its sea freight off-dock workers are putting in volume owing to lower fares and a concerted effort to ease out availability of reliable control of movement of cargo. temperature. The Port of Antwerp is ideally positioned to leverage on this air to ocean trend. Container traffic in South Asia 34 has increased fourfold since the past decade, but logistics PAKISTAN 24 infrastructure has not geared High hopes on CPEC 46 COVER STORY PORTS up to support the rise in flow of The China-Pakistan Economic cargo. South Asian economies Corridor that has the Gwadar Dragon on an acquisition need to put a concerted effort Port at its centre aims to spree to resolve logistics issues that transform the infrastructure in Chinese operators take advantage could have interrelated angles Pakistan. of improved global container port rather than implementing demand growth prospects. isolated measures. 36 AFGHANISTAN 47 Improving connectivity, HARDWARE IMPORTS boosting trade Not a 'soft' issue The focus of Afghan regime is to MG spoke to the Software improve connectivity and trade Technology Parks of India to with neighbours in Central Asia understand the pain points. Read and Europe. on to know more…

48 OTHERS 38 PORTS INLAND WATERWAYS IN NEPAL Karaikal Port Reloaded 8 News in Brief Unlocking inland waterways The young port in the last two Unlocking the potential in inland years has scripted a turnaround 10 Point Blank waterways of Nepal can bring story registering healthy cargo 12 Numbers & Graphs a paradigm shift to the exim growth and putting a point that it logistics of the country. is too early to write it off. 14 News

BRIEF NEWS

DP World Ecoship Cruise Liner Design Completed Cochin housing 2,000 passengers. It handles 2.5 will be 250 meters long with a draft of 8 meters. It will million teu have a maximum speed of 21 since inception knots and a cruising speed of 17 knots. The Ecoship cruiser India Gateway Termi- includes 10 large retractable nal Pvt Ltd (IGTPL) elements made up of solar has successfully panels, which can operate as handled 2.5 million large sails in suitable wind teu since inception conditions. The sails can be in February 2011, used for propulsion and also with a 12 per cent Ecoship, a revolutionary and architecture firm Oliver to generate power. The Eco- increase in volume new cruise liner that uses Design in Spain. This ocean ship is designed to include a at the terminal in renewable energy has been liner with a GRT of 60,000 total of 6,000 square meters 2017. The terminal designed by naval design metric tonnes is capable of of solar panels. has handled over 3,500 vessels since operations began, and currently hosts 54 ves- Shreyas sels a month. In 2016, HMM vessel makes maiden call under China IGTPL handled 282 ventures into mainline vessels, and dry bulk space West India Express service achieved a volume Hyundai Voyager Voy-061, the growth of 22.5 per Shreyas Shipping first Hyundai vessel under the cent. IGTPL has and Logistics Ltd is China West India Express ser- maintained a gross venturing into the vice, called at the GTI terminal, crane rate of 30+ dry bulk segment by Nhava Sheva (JN Port). During moves per hour, and winning a deal from its stay, it handled a total of 942 truck turnaround of Rashtriya Ispat Nigam moves/1,183 teus of imports 26 minutes. Ltd for transporting and 465 moves/631 teus of products from its plant exports, adding up to 1,407 moves/1,814 teus. at Visakhapatnam to Costa Cruises stockyards in Ahmed- A partnership of five lines, the service has the following port rota- abad, Mumbai and tion: Tianjin, Qingdao, Ningbo, Singapore, Port Klang, Nhava to start short Kochi. Sheva, Mundra, Hazira, Colombo, Port Klang, Singapore, Tianjin. sailings in It operates with 6 x 4,600-TEU vessels, with HMM deploying two Shreyas has purchased vessels, the Hyundai Voyager and the Hyundai Goodwill. India a foreign-flagged multi-purpose vessel to Costa Crociere S.p.A of haul 2,25,000 tonnes Italy will start three a year to the three and four nights cruise destinations on an line sailings from annual contract worth BW LPG and Global United Shipping to form Mumbai to Kochi via about `75 crore. The JV in India Mangaluru and Kochi ship will be converted to Maldives respec- into an Indian flag. Of BW LPG and Global tively from November the total quantity to be United Shipping India have to March. Costa Cro- shipped, 60,000 tonnes agreed to set up a 50/50 ciere will continue to is meant for Kochi, joint venture in India. run the seven-nights sailings on the Mum- 75,000 tonnes for The BW Global United Mumbai and 90,000 bai-Maldives route LPG India JV will own that was operated tonnes for Ahmed- and operate gas carriers for abad. between December the transportation of LPG 2016 and March 2017 Shreyas Shipping is within Indian waters. with Mumbai as the already established as BW LPG will sell two of its vessels, namely BW Boss and BW Energy, home port. The cruise a renowned player in to the JV. BW LPG CEO Martin Ackermann said: “The joint venture operator will deploy coastal cargo move- will allow BW LPG to create a strong base in India, which is one of the ‘Costa neoClassica’ for ment in India. world's largest LPG import markets. the service.

08 MARITIME GATEWAY / SEPTEMBER 2017 Kakinada Seaports consortium wins bid to Mercator in talks to acquire DCI develop coal terminal at Paradip Mercator Ltd has shown preliminary interest in A consortium led by Kakinada Seaports Ltd acquiring state-owned Dredging Corp. of India has won the rights to develop and operate a (DCI). The government has been talking about coal handling terminal for 30 years at Para- selling off its entire stake in DCI as part of its dip Port. The port authority had called for divestment plans for this financial year. Merca- fresh bids for the project after scrapping the tor is one of the players that has shown interest earlier deal awarded to Essar Ports Ltd citing in the asset and is having preliminary discus- the firm’s failure to achieve financial closure. sions with the relevant government agencies, it has been reported. The government owns 74.47 The Kakinada Seaports Ltd-Bothra Shipping Services Pvt Ltd-Ripley & per cent in DCI. Co consortium placed a revenue share bid of 36.53 per cent to clinch the deal for building a deep-water terminal with a capacity to load 10 million At the current market price, the sale of DCI tonnes (mt) of coking coal a year. The cost for developing the terminal is could fetch the exchequer around `1,400 crore. estimated at `655.56 crore. The government is soon expected to appoint an investment bank to begin the sale process. GAIL commences pipeline construction in Kerala Sale of imported cotton GAIL (India) has commenced 100 per cent construction work in Kerala stretch of Kochi - Koottanad - Mangaluru-Bengaluru Pipeline (KKMB- commences at Tuticorin Port PL) project. GAIL started its foray into the state of Kerala with KKMB- With the demand for imported cotton increas- PL with a total project cost of `3263 crore. This pipeline will form part ing due to quality issues in locally sourced of the National Gas Grid and it will go a long way in fulfilling the vision cotton, the union ministry of shipping has of the Government of India towards building a gas based economy. facilitated the setting up of trans-shipment facil- ity at the Tuticorin Port for storing around 250 containers of cotton. Cotton can be stored for up to 30 days for free of cost and another 60 Double railway line between Chennai- days at a discount charge with freedom to sell the cotton either in India or any other coun- Kanyakumari try depending upon the demand. The facility The Union Cabinet has approved the construction of double line would enable MSME category spinning mills with electrification between Thiruvananthapuram in Kerala and to have direct and daily access to imported Kanyakumari in Tamil Nadu. The project would speed up the cotton. Spinning mills in Tamil Nadu consume operation of goods and coaching trains. Operations from Vizhinjam about 120 lakh bales of cotton per year. Port is likely to start by 2019 and 30 per cent of its gateway traf- fic, is likely to be handled by the Railways. Present line capacity of Thiruvananthapuram-Nagarcoil section of this route has already saturated which is causing heavy detention to trains moving towards Essar Ports bags Mozambique Kanyakumari and Chennai. Line capacity of this route needs to be coal terminal deal enhanced to meet the demands for additional trains and smooth movement of trains through the route.

DCI lowest bidder for Mumbai Port Dredging Corporation of India has emerged as the lowest bidder for a three- year dredging contract from Mumbai Port Trust. "The project involves dredging of around 11 million cum at an estimated cost of `141.06 crore for three years," DCI said. DCI has been able to recapture the maintenance dredging work after almost a decade at Mumbai Port. Essar Ports Ltd has won a deal to develop a Centre to bear 50 per cent cost of 20-million-tonne capacity coking coal loading terminal at Beira Port in Mozambique. This waterways plan is the first overseas venture of the port operat- The Centre will bear 50 per cent cost of the `453-crore proposed inland ing unit of the Essar Group. The terminal will water transport project, Union minister for road transport and highways be developed in two phases of 10 mt each, Nitin Gadkari announced. The proposed waterways project will link Kaly- with the first phase costing $275 million and an, Dombivli, Bhiwandi, Thane, Vasai and Mira-Bhayander and provide expected to start operations in the first quarter an alternative transport to commuters through the Ulhas Creek. Gadkari of 2020. Essar Ports will own a 70 per cent asked the local civic bodies of Kalyan-Dombivli, Thane and Mira-Bhay- stake in New Coal Terminal Beira SA (NCTB) ander to bear the remaining cost and also get the required permission from with the balance held by Portos e Caminhos de the maritime board. Ferro de Moçambique.

SEPTEMBER 2017 / MARITIME GATEWAY 09 POINT BLANK

Developing Asia is South Asia is off to a good start with strategically located improved exports pushing between Central Asia, Europe and Eastern Asia. growth prospects for 2017. If there is opportunity for Despite uncertainties smooth movement, the surrounding global region may emerge as recovery, the region’s trading hub and this is what economies are well-placed we are trying to push.” to face potential shocks to – Nagesh Kumar the outlook.” Head South and South-West Asia, – Yasuyuki Sawada UNESCAP Chief Economist, ADB

If U.S. coal exports remain high throughout 2017 it will have a solid effect on the global seaborne coal trade and support the overall improvement in the dry We are focused on building bulk shipping industry.” robust and quality infrastructure to augment growth and – Peter Sand Chief Shipping Analyst, BIMCO sustainable development. These initiatives are inviting the attention of global brands making foray into Bangladesh market.” – Md Shahriar Alam State Minister for Foreign Affairs, Bangladesh

Most of Nepal’s exportable goods, such as agricultural products, are in the sensitive lists of many South Asian countries, which have created barriers for entry of goods into those countries.” – Purushottam Ojha Former Secretary, Ministry of Commerce, Nepal

10 MARITIME GATEWAY / SEPTEMBER 2017

NUMBERS & GRAPHS

MAJOR COAL IMPORT DESTINATIONS FOR INDIA

Source: enincon research & analysis

COMPARATIVE ANALYSIS OF COKING COAL IMPORT CRUISE TOURISM POTENTIAL TO BOOST INDIAN DESTINATIONS FOR INDIA TILL 2020 ECONOMY Parameters Countries

Indonesia Australia South Africa USA 40 35,500 250,000 955 lac jobs ships Coal Reserves cr per Yr Regulatory & Policy Intervention Distance

Domestic Infrastructure ` Availability Stability of Tremendous Expected Promotion No.of cruise Government potential revenue of cruise ships to visit Coastline Length for cruise generation tourism will India can go tourists create over up from 158 to Coal Pricing 2,50,000 jobs 955 per year

High Medium Low

12 MARITIME GATEWAY / SEPTEMBER 2017

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filed the DRHP last year. response has not been high. Odisha govt LOGISTICS This has been deferred, Currently, a total of four based on the strong perfor- international flights operate shapes up Govt clears three mance in 2016-17, and the from the Pune airport. They industrial corridor encouraging results in the include two to Dubai (Air export infra plans current financial year. The India and Spice Jet), one to company is planning to go Abu Dhabi (Jet Airways) public in FY2018-19. and one to Frankfurt (Luf- thansa). There has been no international cargo export Railways to from the Pune airport diversify its facility. freight basket Pune airport director Ajay Kumar said it was initially expected that two tonne Odisha government is cargo will be transported developing infrastructure in Jajpur, Jagatsinghpur, The central government has from Pune daily. Around 40 per cent of international Kendrapara, Bhadrak, Cut- given its approval for three tak and Khurda districts proposals including estab- cargo dispatched by Mum- which are emerging as new lishment of an Integrated bai airport originates from industrial corridor attract- Cargo Terminal (ICT) at Pune and suburbs. the Imphal International ing large scale investment. Comprehensive plans have Airport; modernisation Sri Lankan of infrastructure facility The Railways Ministry has been made to promote in Karnataka for marine said that the Railways need Airlines eye more industrialisation in two exports – where the total to diversify its freight basket destinations in phases, three places in each cost is `13.34 crore; and over a period of time and phase. “There is no other construction of a new PPP initiatives are the best India place in the country where ‘Standard Design Factory’ to accommodate smaller two big ports are available building at Cochin Special quantities of cargo. “Rail- within a distance of only Economic Zone (SEZ) for ways traditionally have 50 nautical miles from each which a total of `61.63 been doing business in bulk other. Both the ports are in crore will have to be spent. commodities, that too in ten the process of augmenting The cost of building the major commodities includ- their cargo handling capac- ICT at Imphal is `16.2 ing ore and cement among ity with deeper draft,” said crore, of which the share others. Over a period of Secretary of Industries De- of Trade Infrastructure for time, we will have to diver- partment, Sanjeev Chopra. Export Scheme (TIES) is sify the freight basket and Strengthening its South `12.96 crore and that of the to do that, we need smaller Indian connectivity with Airport Authority of India quantities of freight.” The three new destinations, Sri (AAI) is `3.24 crore. minister said the best way Lankan Airlines is looking HVGPL forays into in which smaller quantities at the possibility of connect- container business of cargo can be accommo- ing more destinations into Hindustan Vacuum Glass dated is through the PPP India given the potential Seaways Pvt. Ltd (HVGPL) has de- initiative. for growth in the market. promoters buyout With these additions, Sri veloped a dwarf container Lankan airline will operate in association with M/s IDFC stake in the Cargo operations 126 flights per week to 14 Kalyani Cast Tech Pvt Ltd. company at Lohegaon cities in India, with existing This is in line with Railway services to Chennai, Tiru- Ministry's announcement The promoters of Sea- airport remain a chi, Thiruvananthapuram, that railways will use dwarf ways Shipping & Logistics non-starter Mumbai, New Delhi, Gaya, containers to enhance Ltd have bought out the A fortnight after it took Madurai, Varanasi, Kochi, cargo carrying capacity by 2 entire stake of 24 per cent off with much fanfare, the Bangalore and Kolkata. The million tonnes per annum. that IDFC Private Equity international cargo export new services would boost The dwarf container has (IDFC PE) held in the com- facility at Pune airport is connectivity for the business the standard dimensions of pany. IDFC PE has now still to find any takers. Of- community and enhance a shipping container apart completely exited from ficials of the Pune customs opportunities for rapid and from a unique engineer- Seaways. Seaways had ear- say that the registration of seamless transport of all ing design to enable these lier planned for an Initial airlines for availing of the types of cargo throughout containers to be stacked and Public Offering, and had facility has started, but the Sri Lankan’s network. run on electrified tracks.

14 MARITIME GATEWAY / SEPTEMBER 2017

NEWS

ping. The team sought Cargo Terminals (CUDCT) SECL says mines details of land that would at Guwahati, Tirupati, GST impact: be available in Krishnapat- Lucknow, Thiruvanantha- facing logistics Queues of trucks nam node surroundings puram, Varanasi, Amritsar, constraints for considering this region, across states get Srinagar, Vijayawada and which is located on the to undertake international Visakhapatnam-Chennai shorter cargo handling operations at Industrial Corridor (VCIC), Pune, Jaipur, Aurangabad, for the proposed Coastal Economic Zone (CEZ). Visakhapatnam, Madurai, Tiruchirappalli. AAICLAS to foray Nepal seeks into airports waiver on GST South Eastern Coalfields has been facing logistics internationally constraints in transporting The roll-out of GST will coal from pits to its railway ensure smooth move- sidings at Korba, Raigarh ment of trucks across state and Korea-Rewa fields. borders. Border commercial This has prompted the coal tax check posts have been miner to stop supplying abolished in 22 states after more than the trigger level the GST launch on July 1. to its customers till further Also, eight states – Assam, notice. Himachal Pradesh, Mani- pur, Meghalaya, Nagaland, AAI Cargo Logistics and Al- Nepal’s Ministry of Com- South Eastern Coalfields Punjab, Mizoram and Tri- lied Services Company Lim- merce has written to the has clarified that if consum- pura – are in the process of ited (AAICLAS) is looking Indian government urging ers require more coal than removing them. Now, the at investing in international for a waiver of GST on the trigger level it can lift GST will be imposed even airports. “In certain models Nepal-bound goods. This additional quantities by on inter-branch transfers at certain places we will follows a slowdown in ex- road either from the Korea- but input tax credit will be invest in facilities and third ports and imports of goods Rewa or the Raigarh mine given, which was not the party will manage them to and from third countries fields. case under the CST. whereas in some airports we via India due to confusion will build the facilities and created by implementa- operate ourselves.” We also tion of GST. The pace of Logistics Kart's Team from NITI have a strong mandate from imports and exports had soft launch slowed down few days Aayog visits the board to explore cargo Logistics Kart has launched handling and allied ser- before implementation of Krishnapatnam the new tax regime, and has an online B2B e-commerce vices abroad,” Keku Gazder, not picked up since, it was market place that connects Port for CEZ CEO, AAICLAS said. pointed out. This has been importers and exporters A high-level team of NITI “We are expecting the busi- attributed to Indian Cus- with logistics service pro- Aayog and experts from ness to grow by 10-15 per toms offices still upgrading viders nationwide, to secure the Central government cent in the current financial their IT systems, delaying logistics services in 3 simple visited the Krishnapatnam steps: Klick. Konnect. year and over 20 per cent movement of goods. Port recently and enquired Trade. Logistics Kart will in the next fiscal year. The about the availability of As Nepal relies mostly on enable MSME companies mandate of AAICLAS is to huge chunks of land, Kolkata Port to import and secure better rates, create focus on cargo and increase electricity, water and other export third-country goods, more transparency and the cargo handled by our resources for setting up a delays at Indian Customs visibility on logistics cost airports using best practices coastal economic zone. The affect the country’s trade. while providing access to team consisted of Yadhu- Cargo handling costs have and world class technolo- logistics companies. Corre- vendra Mathur, Additional gone up since the imple- gies. We are mandated to spondingly, logistics service Secretary, NITI Aayog, mentation of GST. The perform all functions and providers will gain a wider Sanjeev Gupta, Additional authority at Kolkata Port explore opportunities that market reach and Pan India Secretary, Department of earlier used to impose 15 contribute to the growth of presence without having to Industrial Policy and Pro- our airport related business.” per cent logistics service motion, Ministry of Com- charge on goods imported incur sales and marketing merce and Industry and In the FY 2017-18, AA- from third countries, but expenses. The platform of- Abhishek Chandra, Deputy ICLAS is planning to launch post-GST the charge has fers free service to registered Secretary, Ministry of Ship- Common User Domestic increased to 18 per cent. users.

16 MARITIME GATEWAY / SEPTEMBER 2017 NEWS

Milaha launches to double its exim ware- Cements and UltraTech Patel Logistics housing/ CFS stations and Cement. fastest container to set up 10 logistics park capacity to 10 salient features of the initia- service between million sqft by 2020. warehouses tives: Long Term Tariff Pakistan and The company will focus on Contracts; The Minister Qatar the booming e-commerce announced that Indian space under the domestic Railways shall enter into focus where it already long term tariff contracts works with all key play- with key customers using ers as a B2B player, but pre-determined price escala- not into last mile delivery. tion principle, to develop In fiscal 2017, Allcargo a long-term commitment; reported net profit of The LTTC was finalised Patel Integrated Logistics `230.4 crore on a revenue after a process of structured has decided to invest over of `5,568 crore and a debt dialogue with key custom- `80 crore to set up 10 Milaha has launched direct of `300 crore. ers; Under LTTC, IR shall warehouses together mea- be assured of long-term service between Pakistan Allcargo is building its suring over 1 million sqft freight revenue commitment and Qatar. The new PQX largest MMLP at Jhajjar in the key traffic regions at from customers at pre- Express Service will oper- in Haryana on a 180 acre an investment of over `80 determined price escalation ate weekly between the Port land which will be ready by of Karachi and Hamad crore, Patel Logistics, CFO, principle as the customer next March. The company Port with a transit time of Mahesh Fogla revealed. shall commit Minimum expects the final customs 4 days, making it the fastest Guaranteed Gross Freight The first warehouse is be- clearance for its 20 acre direct connection between Revenue (MGGFR) for ing set up in Bengaluru. In CFS in Kolkata anytime the two countries. The each year of the contract the first phase more such now and commission it by PQX will also establish a period at a minimum of 5 facilities will come up in mid-August. Allcargo has 2nd weekly service to and Ahmedabad, Chennai, and per cent increase over the from Mundra, which will also acquired land for exim Gurgaon this financial year, previous year. add to Milaha’s existing warehouses/ CFS in Ben- while the second phase, Mundra call as part of the galuru (100 acre), Hyder- IQX (India Qatar Express which will begin next year, abad (a 40-acre CFS will be Service). PQX will have a will see warehouses in ready soon), Chennai (54 weekly call in all ports fol- Pune, Mumbai and Hyder- acre) and Nagpur (60 acre) East Coast lowing a Mesaieed – Mun- abad. into which it will pump in dra – Karachi – Hamad around `1,000 crore. Logistics eyes – Mesaieed rotation. Allcargo to get `100 cr revenue into last-mile Railways launches Kerala Maritime East Coast Logistics Pvt delivery new freight Ltd has set targets of `100 Board Bill passed initiatives crore in revenue and 15 mil- The Kerala Assembly lion tonnes in cargo for the passed the Kerala Mari- current fiscal. “In 2016-17, time Board Bill, for the we registered total income better development of the of `77 crore against `52 maritime sector. The Bill crore in the previous year,” envisages development of said V Suresh Anand, Ex- minor ports, coastal ship- ecutive Director, East Coast ping and navigation, which Logistics. are currently looked after For the last four years, by various departments, With the GST boost, All- including ports, irrigation, The Railways Ministry ECL has been growing at cargo Logistics is planning fisheries and agencies like launched new freight initia- about 40 per cent annually. an aggressive domestic play Kerala State Maritime De- tives with the aim of giving ECL’s target of 15 million by entering the last-mile velopment Corp and Kerala a fillip to cargo movement tonnes per annum (MTPA) delivery space and has Shipping and Inland Navi- by rail. He released a new of cargo compares with 11 set a target of trebling its gation Corp. The proposed freight structure for double- MTPA handled in 2016-17. domestic revenue at `1,500 Board’s objectives include stack dwarf containers and Last fiscal, ECL handled crore from the segment by construction and operation signed agreements under 9.5 million tonnes of coal 2020. The company will of minor ports, their con- Long Term Tariff Contracts and one million tonnes of invest around `1,000 crore servation and maintenance. (LTTC) with TISCO, India iron ore.

SEPTEMBER 2017 / MARITIME GATEWAY 17 NEWS

Freight movement “The low sea freight cost Pendulum Express SHIPPING due to direct link with via waterways on Chinese ports, and low port Lines launches the rise charges will work as com- services to India Port operators pensation for Nepali traders eye big business The country witnessed a worried about higher cost from Ro-Ro notable jump in freight emanating from longer dis- transport and cargo move- tance,” said Ashok Kumar ment through waterways Temani, Chairman of Road between FY14 and FY16. Transport and Transit Com- During the period, the total mittee at the Federation freight through coastal ship- of Nepalese Chambers of ping from all ports, includ- Commerce and Industry. ing major and minor, rose 10.9 per cent from 161.36 Cochin Shipyard Pendulum Express Lines million tonnes (mt) to (PEL) entered the Indian 178.92 mt. While the freight bids for assets of common carrier feeder transport from major ports Hooghly Dock arena with a soft launch increased 9.2 per cent to in May 2017 using fixed Gujarat Pipavav Port 125.26 mt, that from minor space allocation on the plans to triple its annual ports jumped 14.9 per cent PIX service from Mundra. handling of automotive to 53.66 mt. Similarly, cargo The Pakistan India Express cargo to 300,000 cars by movement through NWs (PIX) service has a rotation 2020, Keld Pedersen, the rose more than 32 per cent covering Singapore, Port Managing Director of the from 32.26 mt in 2013-14 to Klang, Colombo, Karachi, port revealed. Mumbai Port 42.66 mt in 2015-16. Mundra, Port Klang. Trust handled the biggest chunk of exported cars in Cochin Shipyard Ltd (CSL) PEL, recognising the poten- the fiscal year ended March Vizag Port offers is looking to take over the tial of the Indian market, 2017. At more than 2 lakh direct link to assets of defunct shipyard further highlighted its com- units, the volume was 20 Chinese ports Hooghly Dock and Port mitment to this market and per cent more than the Engineers Ltd (HDPEL) announced that it would previous year. Jawaharlal and has placed a bid under introduce a new weekly Nehru Port Trust is looking its revival plan. The move service calling 3 west India at setting up a RoRo facility will help CSL foray into the ports. The North Asia- for vehicles at a satellite inland water space. “We India Subcontinent (NISC) port it is planning to build are looking at forming a service has commenced. at Wadhwan with an invest- joint venture, but moving Pendulum’s partners in this ment of `10,000 crore, its strongly into the inland service are HMM, CMA, deputy chairman said. water space. We have bid KMTC and SCI. Each Visakhapatnam Port has for HDPEL’s tender for the partner, including Pendu- urged Nepali traders to upgradation, operation, lum, will contribute 1 vessel Developing make more use of the sea- maintenance and manage- while HMM will contribute waterways in port as the cost of ferrying ment of two of its shipyards 2 vessels. goods from there is lower. at Salkia and Nazirgunge,” The tentative rotation Tamil Nadu The frequency at which Madhu S. Nair, CMD, CSL would be: Xingang (Tian- cargo trains are leaving the said. A pre-feasibility study by port for Nepal indicates jin), Qingdao, Ningbo, Sin- a French company on fer- underutilisation of the port. Kolkata-based HDPEL’s gapore, Port Klang, Nhava rying cargo and passengers Salkia and Nazirgunge Sheva, Mundra, Hazira, across 10 inland waterways Although Visakhapatnam shipyards are located at Colombo, Port Klang, Sin- in Tamil Nadu will be ready Port is located quite far Howrah, West Bengal. The gapore, Xingang. With this next month. Based on the away from Nepal, it offers Indian Government had ac- weekly service, PEL as report, a feasibility survey lower sea freight costs, and corded in-principle approval a feeder carrier will offer will be carried out and the freight forwarders do not for formation of joint NVOCCs and MLOs an op- project is expected to be have to pay various charges venture of HDPEL with portunity to have space and ready in three years. Based such as detention cost, a player selected through a direct connection for their on the report, routes to be demurrage cost and many a bidding process as part containers from Hazira to taken up for further studies other formal and informal of its rehabilitation-cum- Singapore, Port Klang and will be chosen. charges. restructuring exercise. Chinese ports.

18 MARITIME GATEWAY / SEPTEMBER 2017 Gateway SpotLight, a special feature by Maritime Gateway, showcases the unique initiatives of business groups across maritime sectors in their products, services and processes that helps them achieve and sustain better productivity, efficiency, environment conservation and above all judicious business practices. Gateway SpotLight provides an opportunity for businesses to bring to light their best practices at work and thereby such a FOCUS.

Presenting under this feature.

Liebherr - The leader in container cranes technology and innovation With a supply record that exceeds over 800 machines in over 56 countries, Liebherr is one of the foremost container crane and reachstacker manufacturing companies in the world and leads the way in technology and innovation

SEPTEMBER 2017 / MARITIME GATEWAY 19 SPOTLIGHT

• Delivery tailored to customer requirements Liebherr Maritime Cranes is entering the market for • Assembly on site or fully erect delivery available maritime cargo handling equipment with new and innovative solutions. • New and innovative solutions for maritime cargo handling equipment Liebherr Reachstacker iebherr Container Cranes has been manufacturing The LRS 545 is designed for highly responsive operation to cranes at their Irish plant since 1958. The factory allow high performance in a relaxed manner. The innovative initially manufactured large tower cranes and for individual drive concept ensures that, a hydraulic motor L independently drives each wheel. Not only is this a more many years, the world’s largest tower cranes were built in Killarney by Liebherr. compact solution, it reduces tyre scrubbing and thereby increases tyre life. The reduced wear and tear of the tires In 1967, Liebherr in Ireland began to manufacture strongly contributes to low total cost of ownership. By container gantry cranes. Involvement in the container removing the mechanical gearbox element, the drive of crane business necessitated that, besides design and the machine from acceleration to braking is smooth and manufacturing facilities, this new and specialised business step less, which provides added sensitivity at low speeds also called for other skills, such as shipping and erection and increases driver comfort. facilities, language and marketing expertise, after sales service and spare parts provision. Another significant factor for good total cost of ownership of a Reachstacker is of course fuel consumption. The Liebherr in Ireland became Liebherr Container Cranes highly efficient hydrostatic drive system of the LRS Ltd in 1972, in order to undertake worldwide marketing, 545 makes a reduction in engine size possible. Fitted design, manufacture, delivery erection and servicing of with a 4-cylinder 230 kW engine that meets Tier 4f rail mounted quayside container cranes and container requirements, fuel consumption as low as 12 to 14 litres stacking cranes. With a supply record that exceeds over per hour can be achieved. 800 machines in over 56 countries of the world, Liebherr container cranes supplies ship to shore container cranes, Liebherr mobile harbour cranes rubber and rail mounted gantry cranes and straddle Liebherr’s range of mobile harbour cranes is extremely carriers. versatile making it a universal all-rounder and key asset Ship to shore container cranes and rubber and rail for handling all types of cargo from containers to bulk mounted gantry cranes are designed and manufactured commodities, general cargo and even heavy lifts up to in Killarney, Ireland. Prior to shipping the cranes undergo 308 tonnes. The product range covers all vessel sizes extensive quality control checks and the machinery and up to megamax and capesize. Diverse applications and electric components of the cranes are assembled with varying terminal designs call for different equipment the drive and motor elements of the cranes being tested. configurations. The Liebherr mobile harbour cranes enable full modularity, and so flexibility, across the entire Assembly on site product range. Typically a Liebherr container crane is shipped in large The travelling system, whether rubber-tyred, rail- preassembled components. Installation is done in close mounted or a floating unit, can be easily adapted to meet cooperation with the client and installation companies. the port infrastructure. This also applies to the drive Fully erect delivery concept, which can be chosen from a conventional diesel engine, a hybrid drive or an electric drive system. When space is at a premium or the customer requires minimum work on site, the option to avail of fully erect The bestselling LHM type is the LHM 550. delivery is available. In this instance the cranes are The LHM 550 is designed for efficient cargo handling shipped to a nearby port where normal erection of the up to post-panamax-sized vessels. The crane operates cranes is undertaken, which is then barged to their final with outstanding mobility and manoeuvrability and has destination. An alternative, is to assemble the cranes fully a maximum lifting capacity of 144 tons and 54 metres in Ireland and then ship to the final destination. Earlier this radius. year, three large ship to shore container cranes were assembled at Liebherr’s Cork Dockyard facility and sent The LHM 550 is the perfect crane for handling bulk to Puerto Rico. cargoes in the Capsize ship class. For container handling, ships of the New-Panamax class are the optimal working environment for the LHM 550. General cargoes and heavy-duty lifting up to 144 tonnes complete the range of applications of this crane type.

www.liebherr.com [email protected]

20 MARITIME GATEWAY / SEPTEMBER 2017 NEWS

IRClass releases the shipping ministry wants several documents. Paradip Port rules for LNG- to keep it out of the GST The Web-based mechanism, handles 18.63 pc regime in order to boost the being developed by the fuelled coastal & industry. government-owned Na- more cargo in Q1 inland vessels To make India a global hot tional Informatics Centre 2017-18 spot for cruise tourism, a Services Inc., is aimed at policy is likely this month enabling the developer to as steps are underway to submit applications online expand number of cruise and track their status on a vessels to 700 from about 70 real-time basis. at present. Transportation of passengers (with or with- JNPT records out belongings) by inland improved Indian Register of Shipping waterways is not a taxable (IRClass) has released rules service under the Finance performance in Paradip Port has handled for LNG-fuelled coastal Act, 1994 and the same rule Q1, 2017-18 24.44 million tonnes of and inland vessels. These should be applied to “cruise cargo in the first quarter of rules will help the maritime ships” operating domesti- 2017-18 as against 20.59 mt stakeholders to promote cally or internationally. in the corresponding period of the previous fiscal (2016- environment-friendly fuels To promote cruise tourism, 17), a growth rate of 18.63 for coastal as well as inland an action plan is also on the per cent. Accordingly, the vessels. anvil that will include key number of vessels handled steps to bring it on par with The rules for gas-fuelled by the port increased by international standards. vessels have been developed 12.34 per cent during the A slew of measures are based on a study of the vari- period under review to 437, already been taken to boost ous international require- as compared to 389. ments such as the ESTRIN infrastructure that include (European Standard laying building cruise terminals JNPT continued its growth The Port has taken a slew of down Technical Require- at five major ports – Mum- momentum in the Q1, measures to enhance its ef- ments for Inland Naviga- bai, Goa, New Mangalore, 2017-18 by clocking a 5.11 ficiency, which has ensured tion Vessels), the IMO IGF Chennai and Cochin. per cent growth in container improvement in ship day Code, and consultations traffic by handling at 1.20 productivity from 22,161 with various stakeholders. million teus as compared to tonnes in 2016-17 to 25,588 PORTS 1.14 million teus in the cor- tonnes in 2017-18 (up to IRClass has also developed responding quarter of the June 2017), a surge of 15.46 rules for pleasure crafts Web nod soon for last financial year. per cent. Average turn- above 24 m length, which around time has improved are in addition to its rules dry ports, cargo JNPCT handled 4.01 lakh from 4.53 days to 4.40 days, for pleasure crafts below 24 stations teus in the latest quarter while berth occupancy has m length already published compared to 3.99 lakh teus The Centre will soon been reduced from 69 per earlier. These new rules are in the corresponding quar- announce a mechanism cent to 67 per cent. developed based on several ter of the last year with 0.5 that will facilitate online national standards as well per cent growth. Among the submission and processing Fortigo starts as ISO standards. four terminals under JNPT, of applications for set- APM Terminal handled GSTN service for ting up ICD, CFS and Air 4.99 lakh teus up 14.5 per truckers Exempt cruise Freight Stations (AFS). The cent and NSIGT handled Fortigo Network has intro- proposed reform – with a 1.34 lakh teus as compared tourism under GST duced a technology solution view to boost India's foreign to 1.17 lakh teus in last regime: Shipping to enable transporters and trade – comes at a time year. Ministry when demands for setting fleet owners to seamlessly up more ICDs, CFSs and In Q1 of the current finan- register on to Goods & Ser- The Shipping Ministry has AFSs in India have risen. cial year the port handled a vices Tax Network (GSTN). asked the GST Council to The Inter-Ministerial Com- total volume of 16.35 mil- Through this paid service, exempt cruise tourism under mittee (IMC), a single win- lion tonnes as compared to transporters and fleet own- the new indirect tax regime, dow clearance mechanism 15.90 million tonnes in the ers can upload invoices and in line with major cruising for applying for CFS/ICD corresponding period of the other GSTN documents and nations. At present, cruise is considered cumbersome previous year with a growth maintain their entire books tourism is not taxed and and involves submission of of 2.8 per cent. of accounts online.

SEPTEMBER 2017 / MARITIME GATEWAY 21 SOUTH ASIA NEWS

BANGLADESH CHINA ers in the North Central, MYANMAR Northern, Eastern, North Bangladesh to Western and Central Prov- Improving import more rice inces. The ultra-modern Thailand- hub will also supply 250 Myanmar trade Bangladesh is experiencing dealers of tractors and agri- a severe scarcity of rice this cultural hardware products A pilot project which uses year. The government of bringing Singer’s products semi-trailer swapping with Bangladesh (GoB) initially closer to the farming con- bonded cargo has halved the arrived at an import demand sumers. Equipped with latest time needed to reach Thil- of 1.2 million tonnes (mt) of technology and the latest awa SEZ from Thailand. Sending a container from rice, but this later escalated distribution management to 1.5 mt due to crop losses. Panomsarakarm in Thailand DB Schenker system for on-time deliver- to Thilawa SEZ in Myan- In May 2017, GoB sought partners with ies, the storage capacity of mar takes 2.5 days, whereas rice supplies from Vietnam, the hub will be extended by conventional logistics needs Thailand and Cambodia by Sichuan JiuYe using a double deep racking 4-5 days and ocean freight issuing import tenders of DB Schenker and Sichuan system. takes 3 weeks. The scheme 50,000 tonnes each. Some JiuYe Export have signed represents a step towards shipments of Indian rice a partnership agreement No foreign parties efficient and barrier-free – about 1.5 lakh mt – have trade between Mae-Sot and for future cooperation in been made through land/ in Colombo Port’s Myawaddy, making cross- logistic handling of perish- sea routes by private trade. border logistics easy. able goods. Sichuan JiuYe East Terminal No serious attempt appears provides cross border one- to have been made by GoB stop supply chain services THAILAND in importing more rice from to agriculture, food e-com- India. merce and food compa- Thai shippers nies in China and abroad. MALDIVES Through the agreement, raise export India boosts Sichuan JiuYe benefits from growth forecast DB Schenker’s strong global agri exports to network and extensive mar- to 5 pct Maldives ket experience. DB Schen- Thailand's exports are ker considers JiuYe as an expected to grow 5 per cent important strategic partner this year, better than the 2.5- Sri Lankan President, to strengthen and develop its 3.5 per cent projected earlier, footprint in the perishable Maithripala Sirisena told the Sri Lanka Ports Author- a group of shipping firms segment in China. ity workers’ unions that projected, but added that a he would not allow the strong baht was a threat. Ex- SRI LANKA contract on Colombo Port’s ports between January and East Terminal to be given June rose 7.8 per cent from a In FY-2017-18, India will Singer logistics to a foreign party. Among year earlier. Shipments will export 11,714.45 MT of the companies bidding for be driven by stronger global potato, 19,466.36 MT of hub in Dambulla the project were Shapoorji, demand, particularly for onion, 67,640.24 MT of Singer Sri Lanka has opened CONCOR, and Bangla- electronics, as trade partners' desh’s Summit Shipping. rice, 59,442.17 MT of a massive 75,000 sq.ft. economies are recovering. wheat flour and 11,706.30 logistics hub in Dambulla. In the early stages, the The commerce ministry and MT of sugar to Maldives The state-of-the-art logistics Sirisena-Wickremesinghe the central bank forecast ex- boosting bilateral trade hub will double up Singer’s government was keen on ports worth about two-thirds between the countries. A speed of distribution while giving the contract to a of the Thai economy to rise directive from the Director maintaining a streamlined South Asian company to 5 per cent this year. Last balance China and South General of Foreign Trade inventory control to keep year, exports rose 0.5 per Asia, in the port projects. states that the exports up with rapidly increasing cent, the first annual rise in of these essential com- The then minister of ports, growth in sales. The new Arjuna Ranatunga, even four years. But a rally in the modities to Maldives are logistics hub located on 5.5 named the Indian firms, baht will have a big impact exempted from any exist- acres will cater to the needs Shapoorji Pallonji and on export orders, particu- ing or future restriction/ of 180 company shops and CONCOR, as the likely larly on those with domestic prohibition on export. 200 consumer durable deal- recipients of the contract. content.

22 MARITIME GATEWAY / SEPTEMBER 2017 NEPAL issues due to heavy rush of strategic Chabahar Port and co-managing overseas work at Karachi Port. They will be operational by 2018, terminals. Alternative suggested the government Union Minister for Road Transport, Highways and The KSP will establish to construct new terminals operational guidelines by checkpoint for at Karachi. They also urged Shipping, Nitin Gadkari said. Gakdari is keen on the end of the year, and the government to take back Nepal trade expediting development of aims to launch full-fledged Nepal and India have agreed the taxes levied at the dry the Chabahar port, located operations in January. The to use the Bhimnagar- ports and make all dry ports in the Sistan-Baluchistan alliance is being formed in Bhantabari small customs present in the country active province on the energy-rich hopes of restoring the coun- try’s shipping reputation checkpoint as an alternative for resolving the issues be- Persian Gulf nation's south- ing faced by the importers. ern coast that can be easily after its then-largest carrier, to the Biratnagar-Jogbani Hanjin Shipping, went customs to keep trade move- accessed from India's west coast, bypassing Pakistan. bankrupt last year. HMM ment smooth. Recent floods INDONESIA is reportedly looking to al- have damaged railway tracks India has accelerated work locate more vessels to meet and bridges on the Indian DP World signs at the Chabahar Port and rising demand on US routes side halting the trade ac- finalised some tenders for in the coming months. tivities. Traders have started Indonesian installation of key equip- ment. "Civil construction HMM agreed to a strategic rerouting the stranded cargo development deal cooperation with 2M Alli- containers from Bhimnagar work has started there. We have finalised tenders worth ance members Maersk and to Bhantabari and more than MSC back in December `380 crore for equipment 1,000 trucks have arrived involving a combination out of `600 crore and once through the point. Rerouting of slot exchanges and slot the port becomes operation- has increased transport costs purchases between the liner al it will become a growth carriers, although Maersk as trucks have to cover an engine," the minister said. additional 100km distance. and MSC made it clear the agreement with HMM was DP World has signed a port “outside the scope” of the PAKISTAN and trade infrastructure KOREA 2M Alliance. agreement with the Indone- Govt urged to sian government to de- New Korea- South Korea’s 14 construct new velop two major break bulk Taiwan-Hong terminals at port projects – the Kuala Tanjung container carriers greenfield Port and logistics Kong service to form shipping zone and Belawan Port proj- announced ects in North Sumatra. consortium “This partnership highlights Yang Ming Marine Trans- Indonesia’s efforts to ac- port Corp has launched a celerate development of its new Korea-Taiwan-Hong ports and trade infrastruc- Kong - KTH service, jointly ture, something we can help operated by YM, T. S. with given our global experi- Lines Co.and Korea Marine ence of advising govern- Transport Co.with two con- Pakistan FMCG Import- ments on connecting with tainer vessels of 1,800-teu ers Association has urged international markets,” said capacity. Its port rotation is the government to con- Sultan Ahmed Bin Sulayem, South Korea’s 14 con- Inchon, Pusan, Kwangyang, struct new terminals at CEO, DP World Group. tainer carriers will sign a Keelung, Taichung, Kaoh- memorandum of under- siung, Hong Kong, Kaoh- the Karachi Port besides IRAN activating all the dry ports standing to establish the siung, Taichung, Keelung, across the country. In a Korea Shipping Partnership Inchon. A round voyage (KSP), the Korea Shipown- joint statement, the As- Chabahar Port takes 14 days. Besides the ers’ Association said. The KTH service, YM provides sociation’s Patron-in-Chief, likely to be carriers including Hyundai Naseem Chawla, Senior four other loops covering the operational by Merchant Marine (HMM), Korean market – Pan Asia Vice Chairman Nafees ur SM Line will cooperate Service, China-Thailand II Rehman Bari and Secre- 2018: Gadkari to increase their collective Service, Japan-Taiwan-Viet- tary General Ali Mattoo Amid deepening Indo- strength through increas- claimed that importers Iranian ties, the govern- ing shared cargo capacity, nam Service and Pan Asia were facing numerous ment is hopeful that the adding new shipping routes Service III.

SEPTEMBER 2017 / MARITIME GATEWAY 23 SOUTH ASIA COVER STORY SPECIAL FEATURE

INFRASTRUCTUREneeds to catch up

24 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA

SPECIAL FEATURE

outh Asia’s trade almost Container traffic doubled in the past decade, with in South Asia has trade as a percentage of GDP increasing by 18 percentage increased fourfold since points between 2000 and 2014. TradeS accounted for a smaller share of the past decade, but GDP in South Asia (47 per cent) than logistics infrastructure in East Asia (55 per cent) in 2014. Since has not geared up to 2000 the region has also enjoyed the second-highest economic growth in the support the rise in world (after East Asia), growing at an flow of cargo. South average annual rate of 6.8 per cent. Since 2000, container traffic in the Asian economies need region increased by a factor of more than to put a concerted four. Capacity also increased, but it grew much more slowly than cargo growth. As effort to resolve a consequence of the growth in trade traf- logistics issues that fic, congestion at container ports across South Asia increased between 2000 and could have interrelated 2012. Ports have offset longer waiting angles rather than times by improving the efficiency of their operations at the berthing stage. More ef- implementing isolated ficient use of port facilities, together with measures improvements in the scale of operations,

Matías Herrera Dappe Senior Economist, Transport and ICT Global Practice, World Bank Ancor Suárez-Alemán Economist (Excerpts taken from the World Bank’s study “Competitiveness of South Asia’s Container Ports.”)

SEPTEMBER 2017 / MARITIME GATEWAY 25 SOUTH ASIA COVER STORY SPECIAL FEATURE

INTRAREGIONAL TRADE AS A PERCENTAGE OF TOTAL TRADE were the main drivers of increase in total factor produc- tivity (TFP) in South Asia. On average, South Asian con- tainer ports experienced the largest improvement in TFP among ports in the Indian and Western Pacific Oceans (80 per cent versus 55 per cent for East Asia) between 60% 2000 and 2010. Europe Drivers for container throughput 35% South Asia’s share in global container port traffic East Asia has increased from 2.1 per cent in 2000 to 2.9 per cent in 2013. India is by far the largest container market in the re- gion, moving about 10 million teus in throughput in 2013. Sri Lanka, whose market is dominated by transshipment, is the next largest player in the region, with throughput of more than 4 million teus. Pakistan (2.6 million teus) and Bangladesh (1.6 million teus) handle smaller volumes of <5% cargo. Maldives handled less than 100,000 teus in 2013. South Asia The South Asian container traffic grew steadily between 25% 2000 and 2013, increasing by a factor of more than four. South East Pakistan’s container throughput grew fastest, increasing at Asia a CAGR of 15 per cent. Annual volumes rose 12 per cent A BURDEN FOR SOUTH ASIA A DISCONNECTED REGION in India, 10 per cent in Bangladesh, 9 per cent in Mal- dives, and 7 per cent in Sri Lanka over this period. South Asia's Intraregional trade is the Trading within South Asia costs more lowest in the world, restricting the than trading outside the region- even The drivers of container throughput in South Asia regions economic growth thousands of miles away. vary across countries. In Bangladesh export growth led largely by US and European demand for readymade garments has resulted in throughput growth via the Port of Chittagong and to some extent the Port of Mongla. In India growing exports and increased domestic demand coupled with the increasing involvement of the private sector in port operations has led to increased through- put. Exports of textiles are major drivers of increase in throughput in Pakistan, through the Port of Karachi and Port Qasim. In Sri Lanka productivity improvements It's 20% why? cheaper for India to Circuitious routes to markets caused in part by private sector involvement at the Port of trade with brazil than Congested border crossings Colombo have allowed it to capture growing volumes of with its neighbor transshipment traffic. Pakistan Inadequate Trade agreements Tariffs and terminal handling charges at most large Lack of transportation infrastructure South Asian container ports are lower than those at ports such as Dubai, Salalah, and Singapore. But the indirect REDUCED TRADE FRICTIONS CAN: costs associated with delays play a more significant role in shippers’ port choices. Increase India-Pakistan trade from <$3BN to $20BN Private investment in port sector The South Asian port sector attracted significant inter- Raise Bangladesh exports to India by est from private investors in the late 2000s. 300% Between 2000 and 2014, the South Asian port sector Reduce prices and enhance access in landlocked regions like Nepal, Bhutan, attracted $10 billion in private investment commitments Northeast India and Afghanistan (16 per cent of all port commitments in the develop- ing world). Two-thirds of the investment commitments during this period took place between 2006 and 2010, GOING FORWARD after the largest number of new projects reached financial closure in 2005. Lagging behind in logistics performance Despite this progress, South Asia’s economic com- Leverage Private and Intraregional petitiveness continued to lag behind that of other regions. Investment Eliminate Tariffs and reduce Non- South Asia ranks far behind East Asia and middle-income Tariff Barriers countries in logistics performance as tracked by the 2014 Logistics Performance Index, while according to Doing Business report by World Bank, the cost of exporting or importing a container in South Asia is more than twice the cost in East Asia. On average in South Asian coun- Invest in efficient connectivity and Liberalize services: Logistics, border crossings Shipping, Air Cargo, Etc. tries, it takes 33 days to export and 34 days to import, effectively eliminating the time and cost advantages South Source: World Bank World Source:

26 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA

SPECIAL FEATURE

FIGURE 1.5 PRIVATE SECTOR INVESTMENT COMMITMENTS TO declined at some ports (for example, Chennai), they PORT PROJECTS BY REGION 1990-99 AND 2000-14 increased at most ports, with times at Kandla, JNPT, and Cochin rising most. Ports have offset the increasing 25,000 90 80 pre-berth waiting time by improving the efficiency of 20,000 70 their operations at the berthing stage. The average time 60 ships spent at berth fell from 1.83 days in 2000 to 1.51 15,000 50 days in 2012. The average proportion of time ships were not being serviced while at berth (idle time at berth) fell 10,000 40 30 from 23 per cent to 19 per cent. The decline in the share Millions of dollars of idle time was most marked at Chittagong and Vi- 5,000 20 Numbers of new projects 10 sakhapatnam; at only a few ports, such as Kandla, did the 0 0 share of idle time increase. Karachi and Colombo have East Europe Latin South Sub-Saharan always had relatively low idle time ratios. The increasing America Middle Asia and and Central East and Asia Africa prevalence of larger vessel visits could explain the pattern Pacific Asia and the Caribbean North Africa observed at Colombo and JNPT, where the time spent at berth increased even as the share of idle time decreased Commitments Commitments New projects significantly. 1990-99 2000-14 The evolution of average turnaround time by country shows that South Asia comprises two very different reali- ties, with Pakistan and Sri Lanka performing better than Asia would have over East Asia on seaborne shipments to India and Bangladesh in terms of time efficiency. India Europe and the East Coast of the United States. is gradually losing competitiveness in terms of time, after These figures matter for South Asia, a region where improving at the beginning of the decade. 75 per cent of the international trade takes place by sea. Performance across regions Weak transport and logistics services, including slow ex- An international comparison of average turnaround pansion of port capacity, contribute to South Asia’s lack times, based on data from Lloyd’s List Intelligence for the of competitiveness. Better port logistics in South Asia months of May 1996, 2006, and 2011 reveals that despite could help increase trade, diversify exports, attract more improvements, South Asian container ports fell farther foreign direct investment and spur economic growth. behind best international performance between 2006 and Despite improvements over the past several years, 2011. Most regions experienced remarkable improvement South Asia continues to lag other regions in terms of in operational performance between 1996 and 2011. Asia competitiveness. Countries in the region still lack the as a whole improved to levels similar to levels in Europe institutional, business, and investment environments and North America. In contrast, performance in South as well as the infrastructure needed to compete in the Asia worsened, with its average turnaround time increas- global economy. The most recent Global Competitive- ing from 2.06 days in 2006 to 2.39 days in 2011. This rela- ness Report indicates that of all South Asian countries, tive deterioration was driven by results at certain ports in only India and Sri Lanka score above the global average India and Bangladesh. There was some convergence on competitiveness. Inadequate supply of infrastructure in the time ports take to service a ship, but no port in ranks among the top 4 most problematic factors for do- South Asia came close to the most competitive container ing business in all South Asian countries other than Sri ports worldwide, such as Singapore (0.5 days), Hong Lanka, where it ranks 10th. Kong (0.72 days), and Shanghai (0.79 days). Transport and logistics are part of the reason for The role of hinterland and terminal operators South Asia’s low level of competitiveness. For transport Inland connectivity between South Asian ports and infrastructure, South Asia performs below both the global their hinterlands is generally poor. All countries face con- average and the average for developing countries in Asia. gestion on roads and rail for inland cargo movements. All Performance within South Asia countries are trying to improve inland connectivity, but Average vessel turnaround time in South Asian progress is slow. As a result, although inland markets are container ports declined between 2000 and 2012, falling contestable in theory, competition in South Asia is more from about 2.3 days to about 2.1 days. Marked improve- restricted than in more developed regions. ment occurred in the early 2000s, but it was partially The need for comprehensive reform offset later in the decade. Vessel turnaround in Chittagong The whole is more than the sum of the parts: Ex- (Bangladesh) and Kolkata (India) takes much longer than perience from across the globe, including South Asia, average in most years (more than four days). In contrast, indicates that although isolated measures to improve ships spend only slightly more than a day at Colombo or port performance have positive impacts, a comprehen- Cochin. sive approach that tackles several interrelated angles Average pre-berth waiting times increased between yields greater benefits. South Asian governments should 2000 and 2012, implying that capacity did not expand as thus adopt a wide-ranging approach that tackles several much as needed to avoid increasing congestion. Many interrelated angles rather than effect isolated measures. factors, including ship sizes, berth capacity, and opera- The approach should strengthen governance of the port tional efficiency, affect pre-berthing waiting time, which sector, allow the private sector to take responsibilities and increased from 0.46 days in 2000 to 0.57 in 2012, having risks it is better suited to deal with than the public sector, spiked as high as 0.76 in 2010. Although waiting times and foster competition where feasible.

SEPTEMBER 2017 / MARITIME GATEWAY 27 SOUTH ASIA INDIA SPECIAL FEATURE

FOCUS ON INFRASTRUCTURE

Port infrastructure is being improved to support the growth in trade and promote coastal shipping. Highways across the length and breadth of the country will strengthen last-mile connectivity by Omer Ahmed Siddiqui

• New port in Sirkhazi, Tamil Nadu - Techno Economic Feasibility Report has been prepared. • New port in Enayam, Tamil Nadu - In principle ap- proval obtained for setting up major port at Enayam. DPR under preparation. ndia being the largest and fastest growing economy at the global level is expected to post a growth rate of 7.6 • New port in Belikeri, Karnataka - Techno Economic Iper cent in FY2018, rising to 7.8 per cent in FY 2019- Feasibility Report prepared. 20. Domestic consumption and exports are on the rise • New port in Vadhavan, Maharashtra - DPR under and the growth in trade is being supported with a boost to preparation. logistics infrastructure. As majority of trade moves through sea, the union Increasing the share of coastal shipping and inland government has initiated the Sagarmala Programme, navigation in the transport modal mix is one of the key under which 415 projects, at an estimated investment of objectives of the Sagarmala programme. In order to approximately `8 lakh crore have been identified across equip ports for movement of coastal cargo, the scope of port modernization and new port development, port coastal berth scheme has been expanded and merged with connectivity enhancement, port-linked industrializa- Sagarmala. Under the scheme, the financial assistance tion and coastal community development for phase wise of 50 per cent of project cost is provided to major ports/ implementation over the period 2015 to 2035. As per the state governments for construction of coastal berths, approved implementation plan of Sagarmala Programme, breakwater, mechanization of coastal berths and capital these projects are to be taken up by the relevant central dredging. `152 crore has been released for 16 projects un- ministries/agencies and state governments preferably der this scheme. In addition, Cabotage has been relaxed through private/PPP mode. for a period of 5 years for specialized vessels like Ro-Ro, 6 new port locations have been identified, namely - RO-PAX etc. Vadhavan, Enayam, Sagar Island, Paradip Outer Har- To augment transshipment capacity in the country, bour, Sirkazhi and Belekeri. The current status of each of Vizhinjam (Kerala) and Enayam (Tamil Nadu) are being the proposed new port locations is as follows: developed as transshipment ports. Vizhinjam is being developed as transhipment hub under PPP mode by Gov- • New port in Sagar Island (West Bengal) - Approval ernment of Kerala with viability gap funding from gov- obtained for setting up major port at Sagar Island. ernment of India. In principle approval has been obtained DPR prepared. Viability being re-examined in view of for setting up a major port at Enayam and its DPR is un- announcement of new port at Tajpur by State Govt. der preparation. To strengthen the last-mile connectivity of West Bengal. the government has developed the Golden quadrilateral • Paradip Outer Harbour in Odisha - DPR under prepa- that includes the East-West and North-South corridors ration. that connect to major ports.

28 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA DATELINE SRI LANKA SPECIAL FEATURE

Island in the ocean of opportunity The challenge and the opportunity to the country is to become a world class marine and logistics centre for Asia, beyond the current business model which is over dependent on transshipment

he 13th-century Venetian traveler Marco Polo described Sri Lanka as being “for its size, better circumstanced than any island in the Tworld.” The country’s location adjacent to the busy main East West shipping route, makes it well connected for shipping to Asia, Europe, Africa and Middle East linking the Indian subcontinent trade. Sri Lanka is ideally located to connect continents and be a cost- effective distribution hub as both Singapore and Dubai are becoming more expensive for such services. The island is connected to the Middle- East and the South-East Asia and the Indian subcontinent within three to four flying hours, and by sea one to five days of transit. This makes connectivity very attractive and fast for both passengers and cargo. Therefore, Sri Lanka will be the most logical location between Singapore and Dubai to be established as a major economic centre to facilitate the ever-increasing e-commerce based business to customer service trade. Colombo is serviced by all major shipping lines with a current Rohan Masakorala throughput of 5.7+million teus and is ranked 23 among global container CEO, Shippers' Academy, Colombo ports. Known as the main transshipment hub in South Asia connecting the regional economies Sri Lanka can be named as the emerging Singapore, Dubai or the Hong Kong as an island that will continue to attract logistics services. India will be best connected via Sri Lanka linking both the East and West coast of India more effectively than any land transport model that could be developed within India. Colombo and Hambantota have new deep-water terminals to accommodate the latest Colombo is ULCC, whilst Trincomalee is a natural deep-water port that can cater to ranked 23 maritime and logistics reequipments of the Bay of Bengal region. among global The challenge and the opportunity to the country is to become a world class marine and logistics centre for Asia, beyond the current container business model which is over dependent on transshipment. To be ports. Known globally competitive Sri Lanka will have to open the economy further as the main and create the conducive environment and attract global capital through reforms and continue modernisation of the business climate. transshipment The need of the hour is that Sri Lanka should put in a plan to hub in South Asia attract global investor interest to transform the location into a major connecting the regional maritime and logistics capital in the world. The development of this ecosystem needs investors with knowledge and business strengths to be economies Sri Lanka can partners in the development process. If the location can be converted be named as the emerging with right policy with timely execution of reforms and modernisation Singapore, Dubai or Hong into a successful economic, shipping and logistics hub using the Indian Ocean and its surrounding environment, then the country can transform Kong, as an island that will into a major financial centre in South Asia. Certainly, the island of Sri attract logistics services. Lanka is in the “ocean of opportunity” to be the hub for international transportation and logistics connecting South Asian trade to the world.

SEPTEMBER 2017 / MARITIME GATEWAY 29 SOUTH ASIA SRI LANKA SPECIAL FEATURE

THE GREAT MARITIME GAME India and Sri Lanka are focusing on improving free movement of trade between the nations. By investing in Sri Lanka’s maritime infrastructure and regional connectivity, India can have a stake in the development of South Asian maritime trade by Deepika Amirapu

arly this year in January, the island nation Sri south of the island with more than60,000 ships plying Lanka made headlines for positive political devel- this route annually carrying two-thirds of global petro- Eopment. It was the beginning of the third year of leum, half the supply of container cargo and more. Thus, the President Maithripala Sirisena’s five-year term. In Sri Lanka’s situation in the nautical corridor between the the two years of his Presidency, much was achieved to East and West is not only of importance from a geostrate- strengthen democracy and empower the judicial system in gic perspective but also from a maritime, economics and the country. Now perhaps for the first time in Sri Lanka’s security perspective. contemporary history, the future holds more promise than Enter India doubt. The President and his men also ensured Lanka did India and Sri Lanka hope to finalise Indo-Sri Lanka well in the three areas the country is often referred to – Economic and Technology Cooperative Agreement tea, cricket and maritime trade. (ETCA) by end of 2017. The ETCA will enhance the While the first two are certainly a delight to partake scope of India and Sri Lanka’s FTA to extend freer move- and watch, maritime trade has been the one bone of ment of goods and services, with the added emphasis of contention leading to some ministerial exits because of cooperation on development of technology and invest- ambiguity in dealing with the Dragon. China has been ment. a complex challenge for the island nation that is deep in Secondly, India should also actively contribute to Sri debt and yet needs to make truce between development Lanka’s infrastructure development. Adding to the IOR’s and securing the maritime interests of the Indian Ocean pearl in bettering its maritime infrastructure would be Region, or IOR. One of the counts that made Sirisena’s seen as essential to achieving its national development ascension to the President’s seat easy was his promise to goals. More specifically, Modi’s administration should control the Chinese aggression in many sectors. How- encourage public-private partnerships and government-to- ever, the 2016 deal according 80 per cent stake to China government investments in India’s neighborhood, beyond Merchants Port Holdings (CMPort) in the Hambantota concerns about China. According to the World Bank Port was criticised and forced Sri Lanka to reconsider its and Asian Development Bank, South Asia is one of the position. least integrated regions in the world. By investing in Sri In August, Sri Lanka tried to correct all the wrongs in Lanka’s maritime infrastructure and regional connectiv- this deal by revising it and restricting the Chinese holding ity, India is enhancing its own security. to 70 percent. The pact limits CHPort’s role in running In March this year, Sri Lanka’s Former Minister for commercial operations by splitting the administrative Shipping, Arjuna Ranatunga said, “Colombo, Trin- functions between two companies. Colombo has also en- comalee and Kankesanthurai – these are the three ports sured that the port will not be used for military purposes. where India could collaborate for development.” Accord- As per existing port management norms, the company ing to the Minister, the country is looking for an Asian that controls operations takes decisions on how ships sub-continent investor. Indian private players should col- must enter and leave harbour. At Hambantota, HIPS’ laborate with the Sri Lankan Port Development Author- right to control warship movements may result in a clash ity to develop ports in Sri Lanka. CONCOR has formed of authority with CMPort, the majority stakeholder. a consortium with APM Terminals B.V., John Keells It is estimated that, by 2030, Asia will surpass North Holdings and Maersk Line to bid for the development of America and Europe combined in global power based on East Container Terminal in Colombo. The total project gross domestic product (GDP), population size, military value is likely to be about $550-600 million. This must be spending and technological investments. The busy East- pursued for India’s intent to play a major role in the IOR West shipping route passes just six to ten nautical miles to be taken seriously.

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www.samsaragroup.com SOUTH ASIA BANGLADESH SPECIAL FEATURE GEARING UP TO EASE CONGESTION The Chittagong Port Authority along with the Customs and off-dock workers are putting in a concerted effort to ease out movement of cargo by Omer Ahmed Siddiqui ll the banks at Chittagong Port have been directed to operate 24/7 along with the port authority and ACustoms; private ICDs that do not deliver quick and efficient services stand to lose their license; the Ban- gladesh Land Port Authority (MLPA) has been instructed to construct an alternative road for transportation of goods, while the port operates 24/7 to evacuate cargo; landlord port model will be introduced to reduce the port authority’s involvement in operations; the off-dock work- be completed at the outer ers and the port authority will procure more equipment to QUICK FACTS channel. As per the new facilitate swift movement of cargo. The ICDs will impose timetable, a gearless contain- CFS cut-off time for exporters for sending export cargo The Chittagong Port Authority, er vessel is allowed to berth so that the ICDs can maintain cut-off time for sending Customs and banks at the port will for 48 hours, smaller geared export laden containers to the Chittagong Port. The ICDs operate 24/7. vessels with cranes onboard will send export laden containers to the port between An alternative road will be can berth for 60 hours and berthing of vessel and six hours before their sailing. The constructed at the port to the largest geared vessels are ICDs will also try to take out import laden containers of evacuate cargo. allotted 72 hours at the port. their designated 37 items at the shortest possible time. The port authority has also Bids have been invited for erecting a specialised terminal Landlord port model will be introduced. mandated that containers to handle bulk cargoes at the port. should arrive in the terminal Chittagong Customs House has jumped into action ICDs will impose CFS cut-off time. yard six hours before the dispatching 94 assistant revenue officers and nine as- vessels departure. sistant commissioners for supporting the exim operations ICDs will send export containers These are some of the 24/7. The CPA will provide an export yard of at least to the port between berthing of vessel and six hours before their measures being implemented 1000 teus at the CCT (Chittagong Container Terminal) sailing. to ease the Chittagong Port and at NCT (New Mooring Container Terminal) within which is almost chocked a short time and will transfer 4,200 teus of containers The port authority will provide an with congestion. The port meant for auction to the newly-built silo yard. It is to be export yard of at least 1000 teus at Chairman has placed a the Chittagong Container Terminal noted that neither CCT nor NCT has any export yard at and at New Mooring Container requisition for declaring present for export containers to facilitate the ICDs to go Terminal. the port as a thrust sector, directly to the vessels' hook point to load export contain- exemption it from paying ers onto vessels. Berthing time: Gearless container non-tax revenue, reforming CPA Chairman has asked the off-docks operators to customs scanning system install scanners at their yards to prevent contraband items vessel (48 hours), for quick delivery, reducing moving through the port. BICDA chairman Nurul Qa- smaller geared vessels with cranes physical inspection of goods, yyum Khan said the import containers should be scanned more off-dock in private sec- and immediately after arrival at the port. (60 hours) tor, and review of tariff. The port authority has imposed strict limits on the largest geared vessels Chittagong Port handles duration for which a ship may remain in the port and this 90 per cent of international is forcing vessels to set sail even if certain booked con- (72 hours). cargo in Bangladesh and tainers have not been loaded. The unfinished loading can the volumes at the port have

32 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA

SPECIAL FEATURE

Six of the thirteen jetties in the port have a depth rang- ing between 6-7 metres, which prevent larger ships from berthing at them directly. Only two jetties have deep draft where larger ships come for lighterage before moving to other jetties. This increases the cost for shippers in addi- tion to the delay as they have to pay two different groups of workers before the cargo is completely unloaded. Today, container ships have to wait at the outer anchorage for around 6-12 days while the waiting time for bulk carriers is around 20 days or more. The conges- tion has driven up ship’s average time in the port by 43 per cent to 84.3 hours between January and June. The congestion began to mount in April when average time in the port was 62.7 hours Adding to the woes of shipping lines are the steep de- murrage for goods to be unloaded after berthing at docks. This has prompted shipping liners plying the Singapore- Chittagong route to raise price per container by $150 because of the congestion. These adversaries have forced shipping lines to cut down the calls on this route to one shipment (as opposed to two earlier) per month. These problems have not cropped up over night at the port. Lack of infrastructure has been accruing over the years. The number of jetties has remained the same since 2007, while import volume has risen from 1 million to 2.4 million containers as of the last fiscal year. Port infrastructure has simply not grown to handle this extra volume. To make things worse, the two gantry cranes which were damaged following an accident on June 25 AVERAGE TIME IN CHITTAGONG PORT FOR CONTAINER SHIPS has substantially disrupted the container handling opera- tions of the port. According to the importers, on an average 15 con- 90 tainer vessels now have to wait every day at the outer 80 HOURS IN PORTS anchorage for getting schedule of berthing at the jetties. “The gearless vessels now have to wait for a maximum of 70 five days while the geared vessels (with container han- 60 dling equipment like cranes on board) have to wait for a maximum of four days at the outer anchorage. The ordi- 50 nary vessels have to wait for a maximum of two days,” 40 revealed Rear Admiral M Khaled Iqbal, 30 Chairman, CPA. The average stay time for a container vessel for getting schedule 20 of berthing in the jetties is supposed be 10 around one or two days under normal 0 circumstances. The congestion at the port has had a JAN FEB MARCH APRIL MAY JUNE cascading effect translating into higher end prices for all goods being imported. The backlog in un- been steadily growing only to overstress the existing infra- loading these goods (counting demurrage) means that the structure that was kept waiting for an upgrade for almost market price of imported products is rising. The impact a decade now. The problem of cargo congestion at Chit- on exports is also apparent with exports growth slumped tagong Port is increasing day by day and the reasons are to 3.67 per cent in the first 11 months of 2016-17. many – The port has 21 RTG cranes against the demand Exim has suffered a lot in the last few months due for 56, there are only seven straddle carriers whereas the to congestion of containers and vessels, even leading to port needs at least 15, most of the jetties have a shallow cancellation of export orders by the international buyers draft, there is a shortage of lighter vessels to transport of readymade garments. The businessmen will have to containers from ocean-going vessels that must offload at count an additional amount of Tk 80 crore per month outer anchorage as the draft does not allow for these to if $100 is imposed on each container on the pretext of berth at the port, there is also a lack of enough berths for additional surcharge. The situation that has built up at the the vessels to dock. These shortcomings have put the port Chittagong Port is surely a wakeup call to all the neigh- in a situation that has built up a queue of vessels waiting bouring ports in South Asia to take a reality check of to get berth. their services and infrastructure.

SEPTEMBER 2017 / MARITIME GATEWAY 33 SOUTH ASIA PAKISTAN SPECIAL FEATURE

HIGH HOPES ON CPEC The China-Pakistan Economic Corridor that has the Gwadar Port at its epicentre aims to transform the infrastructure in Pakistan, right from power to logistics by Omer Ahmed Siddiqui

hina and Pakistan have been long-term allies with bilateral trade witnessing threefold increase in the Cpast few years, to $13.7 billion in 2015-16, up from just $4 billion in 2007. Today, China accounts for 40 per cent of Pakistan's foreign direct investment, which is only around $2 billion. A $600 million investment by China in 2015-16 contributed to a 38 per cent rise in FDI in Pakistan. A major Chinese initiative with Pakistan is the China-Pakistan Economic Corridor (CPEC) agreement that will help Pakistan improve its logistics infrastruc- ture and place the country at the centre of the new Silk route. With a total outlay in excess of $62 billion, CPEC is a key pillar of China's One Belt, One Road (OBOR) programme. CPEC is approximately a 3,000-kilometre network of roads, pipelines and railways to transport goods from Gwadar Port in Pakistan to Kashgar in the Xinjiang Uygur Autonomous Region of China. The $52 billion project intends to rapidly modernise Pakistan’s infrastructure, improve energy ecosystem and establish special economic zones. $35 billion worth of energy projects under CPEC span across renewable energy, coal and LNG. This will help solve Pakistan’s existing energy shortfall of around 4,000MW. $11 billion investment will go in developing highways and transport networks. By cutting a corridor directly from Kashgar to Gwadar can result in accessing $6.5 billion per annum of Chinese spending on shipping of oil from the Middle East currently done via the Strait with rather ambitious plans for even yacht clubs and hot of Malacca. Thus, such opportunities present Pakistan as spring hotels to develop an unlikely tourism hub in the a major logistic hub on the global map. restive Balochistan province. Under CPEC, Chinese companies will grow crops, Around 6,500 acres will be leased to China for agri- build meat processing plants and develop free trade zones cultural demonstration projects. China has announced in Pakistan. Chinese garment factories will, en masse, 17 projects with a total investment of $35 billion. These be transferred to Pakistan, while China will manage and include a fertiliser plant with an annual 800,000 tonne run tourism projects and SEZs along the southern coast, output, Vegetable and grain processing plants with a 1

34 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA

SPECIAL FEATURE

CPEC SPECIAL ENERGY PRIORITY ECONOMIC ZONES PROJECTS

1 Rashakal Economic Zone, M1, 1 MW Coal-based Nowshera, Khyber Pakhtunkhwa 2x660 power plant at Port Qasim, Karachi 2 China SEZ, Dhabej, Sindh 2 870 MW Suki Kinari 3 Punjab-China Economic Zone, M-2 hydro Power Station, Khyber Sheikhupura, Punjab Pakhtunkhwa 4 Bhimber Industrial Zone, PoK 3 2x660 MW Sahiwal Coal 5 Mohmand Marble City, Khyber fired power plant, Punjab Pakhtunkhwa

6 Moqpondass SEZ,Gilgit-Baltistan PoK 4 4x330 MW Coal fired power plant at Thar, Sindh

5 1,320 MW Coal fired power plant, Hub, Balochistan

6 300 MW Coal fired power plant at Gwadar

7 1,000 MW Quaid-E-Azam Solar park, Bahawalpur

8 750 MW Karot Hydro Power Station

from Xinjiang to West Asia. Chinese companies in collaboration with Pakistani counterparts will build a three-level warehousing system (purchase and storage warehouse, transit warehouse and port warehouse). A national storage network of ware- houses will be constructed, starting in Islamabad and Gwadar and then in Karachi, Lahore and Peshawar. A cotton processing plant with a 100,000 tonne out- put has been planned and in the future China may shift its garment industries directly to Pakistan to leverage on the lower wages, availability of land, and export tariffs in Pakistan. China is also planning to develop Paki- stan's mineral resources, particularly in Balochistan and Khyber-Pakhtunkhwa, eyeing gold reserves as well as setting up marble and granite processing sites. China sees the Gwadar Port as the heart of the CPEC million tonne capacity and a coal-powered plant at Sahi- and envisages a free trade zone and a manufacturing hub wal in the Punjab that is already functioning. there to serve as a launch pad for exports to West Asia In addition to this, the Chinese are planning to over- and Africa. China has already secured a 23-year tax-free haul Pakistan's road and rail infrastructure, starting with deal for its companies that will operate out of Gwadar. upgrading sections of the Karachi-Peshawar road and An ambitious annual cargo throughput of 300-400 mil- rail line. The Karakoram highway will be upgraded to lion tonnes from the port is forecast when the project is serve as a key arterial link connecting Xinjiang and Gwa- through, which will be 10 times more than Pakistan's dar. it is already being used to ship goods transported current biggest port in Karachi.

SEPTEMBER 2017 / MARITIME GATEWAY 35 SOUTH ASIA AFGHANISTAN SPECIAL FEATURE

IMPROVING CONNECTIVITY, BOOSTING TRADE The focus of Afghan regime is to improve connectivity and trade with neighbours in Central Asia and Europe. by Omer Ahmed Siddiqui

aving gone through years of war and turmoil, Afghanistan is now focusing on boosting trade and improving logistics. A recent step in Hthis direction was the launch of air corridor between India and Afghanistan last year. The land- QUICK FACTS locked country used to route its bilateral trade with India through Pakistan, but frequent closure of borders often The first flight from Kabul to India carried 60 tonnes of medicinal plants worth created obstacles in trade transit. $11 million. To ensure uninterrupted trade flow Afghan President, Mohammad Ashraf Ghani last year mooted the idea of The second flight from Kandahar brought 40 tonnes of fruits and vegetables. air corridor with Prime Minister Narendra Modi, which India exported 100 tonnes of pharmaceuticals and medical equipment to was later penned into an agreement. After nearly one Afghanistan. year, the first India-bound flight carried 60 tonnes of The bilateral trade between Afghan and India increased from $300 million to $700 medicinal plants, worth $11 million, from Kabul, while million annually, and is forecast to reach $10 billion. the second flight from Kandahar brought 40 tonnes of fruits and vegetables. Subsequently, a flight from Delhi to The cost of exporting a kilogram of vegetables and fresh fruit from Afghanistan to Kabul transported 100 tonnes of goods, mainly pharma- India is about 20 cents per kg, and the cost for moving a kilogram of goods from ceuticals and medical equipment. Bilateral trade between India to Afghanistan is 40 cents. Afghan and India was $300 million which increased to $700 million annually and is forecast to reach $10 billion in the years to come. Agri products and carpet industry are seen as the major beneficiaries of the air corridor. Issues on the Afghan side include lack of cargo According to the Afghan Chamber of Commerce and screening machines at airports and inadequate cold stor- Industries (ACCI) the cost of transporting a kilogram of age facilities, while Indian traders worry about clearing vegetables and fresh fruit from Kabul and Kandahar to the perishable goods quickly through customs as the pro- Indian markets will be about 20 cents per kg, and the cost cess is yet to be streamlined. To improve flight frequency, of a kilogram of goods from India to Afghanistan will be Afghan government has roped in a private airline Kam about 40 cents. Air. The Afghan government would bear the cost of air Hooking to trans-Asia trade route freight on specially chartered cargo flights, allowing the Afghanistan is also improving its connectivity with exporters to pay on the trucking fare overland from Kabul Iran and subsequently will be part of the East-West rail- and Kandahar to Amritsar and Delhi. way connecting China to Europe. Such a railway would The cargo movement has recently run into a rough allow Eastern countries to circumvent the Suez Canal patch with fruit exporters complaining procedural delays, and other crowded sea lanes, revolutionising trans-Asian particularly shortage of cargo planes is causing them trade and making Iran a key hub for the global transfer of major losses. For instance, on July 20 the flight chartered goods. Iran has recently completed the first 30 kilometres by Afghanistan’s national carrier, Ariana airlines failed to of the Khaf-Herat railroad connecting to Afghanistan. arrive on time, and the perishable cargo comprising apri- The rail link is expected to boost a robust $2.8 billion cot and melons were not moved to cold storage, causing trade relationship between the two countries by 5 million tonnes of fruits to rot at the Kabul Airport. According to tonnes of cargo annually. It will also connect Iran and ACCI reports only four cargo flights have flown between Afghanistan to India through rail. The rail project will al- Afghanistan and India under the scheme, carrying about low Afghanistan, India and Pakistan to gain direct access 160 tonne in all. to Central Asian, European and Russian markets.

36 MARITIME GATEWAY / SEPTEMBER 2017

SOUTH ASIA INLAND WATERWAYS IN NEPAL SPECIAL FEATURE

Unlocking inland waterways in a landlocked country

outh Asia Watch on Trade, fully due to lack of adequate port 45,000 km which can be used Economics and Environment infrastructure and maintenance, and to be connected to international S(SAWTEE) is undertaking the absence of policies and legislations waters. But lack of institutional and diagnostic study to assess the to ensure safe and profitable navigable physical infrastructure has left inland situation of water transport in conditions. This research aims to navigation as an untapped sector. All Nepal under Expanding Tradable assess the state of institutions – legal rivers in Nepal drain into Ganges Benefits of Trans-boundary Water: and governmental – which govern and are a part of Ganges River Basin Promoting Navigational Usage of inland waterways for potential (GRB). Connecting Nepal’s waterways Inland Waterways in Ganga and trans-boundary connectivity. The to Indian waterways can open a new Brahmaputra Basins (IW) Project. objective is also to evaluate how the alternative trade route. In addition, via The project aims to contribute to existing water transport services are waterways Nepal could make use of upgrading policies and laws governing interconnected with livelihoods of the Bangladesh’s ports as well. inland waterways in the BBIN region locals and in what ways would the The BBIN countries (Bangladesh, for improving transport connectivity future cross border inland waterways Bhutan, India and Nepal) have and strengthening livelihood of those expansion impact their lives. This potential to get connected through directly connected to waterways. project will also help in identifying water for swifter and cheaper trade Under the project, this diagnostic gaps in policies and institutional movement. Rivers in Nepal are all study includes institutional analysis on capacity prevailing in the existing tributaries of the Ganges while, on the management of policies and laws system once Nepal decides to adapt the east, rivers from Bhutan meet with respect to the management of waterways as an alternate mode of Brahmaputra and both these mighty inland waterways in Nepal. transport. rivers get to the Bay of Bengal Rationale Findings via Bangladesh. Such confluence It is evident that Nepal has not Nepal has more than 6000 make possibility of the transport been able to exploit this potential rivers with cumulative length of connectivity for freight through

38 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA

SPECIAL FEATURE

MAJOR RIVERS OF NEPAL Unlocking the Nepal's rivers can be broadly divided into three categories in accordance potential in inland with their origins. The first category comprises the three main river waterways of systems of the country-the Koshi, Gandaki and Karnali river systems, all of them originating from glaciers and snow-fed lakes. Nepal can bring a The Koshi river system consists of the Tamor, Arun, Dudhkoshi, Likhu, paradigm shift to Tamakoshi, Sunkoshi and Indravati rivers. Of these, the Arun and Sunkoshi originate in Tibet. The confluence of these rivers is at Tribeni the exim logistics of (near Dharan) in Sagarmatha Zone. Flowing for almost 10kms through a the country narrow gorge before entering the plains, the "Sapta Kosi" or the "Koshi" swollen with the waters of the seven rivers finally merges into the Ganges. by Rajan Sharma The Gandaki river system in central Nepal consists of the Kaligandaki, Budhigandaki, Marsyanghi, Trishuli, Seti, Madi and Daraundi rivers. The Immediate Past President Kaligandaki is the longest river and the Trishuli, the main tributary of this NEFFA system.

water a reality provided some river commercial navigation is non-existent Trade through waterways engineering is done. in the Koshi River, but it may be Getting direct access to sea MoPIT had commissioned a possible after the construction of for Nepal cargo movement would feasibility study for water transport in proposed Saptakoshi High Dam. translate into lower trading cost. Due the Koshi, Gandaki and Bheri River The Gandaki River to its geographical disadvantage and basins in 2012. The study concluded The region between Dhaulagiri and overdependence on India’s congested that most of the routes they appraised Gosainsthan is drained by the Gandaki Kolkata and Haldia Ports as transit were suitable for operating vessels river system. The river basin has a total gateway, Nepal suffer from high for touristic purposes. The river flow area of 34,960 sq km of which 90 per trading cost. As IWT in South Asia pattern makes navigation on motored cent lies in Nepal. At present, the rivers is receiving growing attention from boats difficult. The report concludes in Gandak tributaries do not boast any the governments and international that commercial water transport for inland waterways. Besides a steamer agencies alike, inland navigation could mass passengers and goods movement service on the reservoir created by the emerge as a viable option for Nepal. is not recommended in the present construction of dam for Kali Gandaki Navigation has been taken up as an condition; however, recreational water and a hydroelectric project in Synagja, important part of the integrated river transport could be developed. there is no mechanized navigation management programmes. As India is The Koshi River service available. The Gandak upgrading its river ports and terminals The river is also known as Basin also does not have proper at Patna and Varanasi to transport Saptakoshi once it hits the plains in inland waterway route. Prospects Nepal bound cargo, developing river Nepal in Chatara at eastern Nepal. Of of developing navigable waterways connectivity would provide Nepal the total 720 km length of the Koshi, are ample once the rivers –Trishuli a much needed alternative trade 513 km lies in Nepal. The river enters and Kali Gandaki converge into the route. Similarly, through the Ganges India at Bhimnagar –about 50 km Narayani River near Devghat, and River, Nepal could access the Haldia, from Chatara – and finally reached flows on the flatter surface. The river Chittagong and Mangla Ports. the Ganges River near Kursela. At could have emerged as an alternate Recommendations present, water transport on the Koshi route to travel from Narayanghat to • Undertake feasibility study of the River is limited to boats used for river Triveni –border to India. However, rivers to facilitate multi-modal crossing at certain places. These boats such undertaking are not possible due transport services. are sole medium of transportation to the Chitwan National Park which that connects the people of so- does not allow boats citing adverse • Upgrade existing traditional boats. called Sri Lanka Tappu with other impact on the habitation. habitation. The boat crossing services In the Koshi basin, river transport • Nepal needs to set up a body for are operated at two points with about could make reaching upper hilly developing waterways. five kilometres distance, all year long. regions via water possible. If similar • A comprehensive Act needs to be Although the lack of river navigation service could be restarted or extended framed to facilitate navigation. has made people highly dependent to include freight movement, it could on the unreliable road transport, reflect on the price of commodities. • Incentives should be offered fishermen take it on a positive note In similar vein, having robust water to increase private sector as they are afraid that motorised transport in the Narayani River would participation. vessels would scare off the fish and mean more employment opportunities • Trans-boundary inland waterways affect their livelihood. As of now, for the people in the area. connectivity should be established.

SEPTEMBER 2017 / MARITIME GATEWAY 39 SOUTH ASIA NEPAL SPECIAL FEATURE VYING FOR THE NEPAL CARGO While Visakhapatnam Port is attracting the Nepal cargo with its efficient infrastructure, the Kolkata and Haldia Ports are also pulling up their socks to gain back the lost business. Meanwhile, China through its One Belt, One Road initiative is trying to shift the Nepal transit trade to itself by Omer Ahmed Siddiqui

container train carrying Nepal bound cargo includ- time for containers to be moved by rail, concessional box ing pulses, garments and electronic goods imported rates for haulage and terminal charges have been intro- Afrom China and Korea was flagged off from duced. CONCOR has reduced the tariff for movement of Visakhapatnam Port last month, marking a new milestone containers from Haldia to Birgunj and back, and agreed in the Indo-Nepal cargo movement. The train will cover to carry minimum 60 teus directly from Haldia without a distance of 1,350 km, including 800 km in India, before levying additional freight with the option reaching Nepal to unload 2.1 lakh tonnes of cargo. The rail of returning the empty boxes either at enters Nepal through the Raxaul-Birgunj entry point. Haldia or Kolkata. Earlier, Kolkata and Haldia served as gateway to Nepal, G. Senthilvel, Deputy Chairman, Haldia but congestion in Kolkata Port is one of the reasons for Dock Complex has informed that there Nepal looking at Visakhapatnam Port as an alternative. was no shortage of trains for Birgunj from According to a BIMSTEC study, cargo arriving in Haldia Haldia and committed to offer prompt takes 11.5 days to reach Birgunj in Nepal by rail, covering loading of containers without levying any additional a distance of 680 km, against the 22 days’ sea travel from charges. Movement of Nepal bound cargo from Haldia Shanghai to Kolkata. The cost of transporting cargo from has been on a decline recently. Kolkata to Birgunj is much the same as the sea freight. To further reduce the cost and time for moving Nepal “Visakhapatnam gives the advantage of cheaper ocean bound cargo, the India-Nepal Electronic Cargo Tracking freight as they can bring in larger vessels. The haulage System (ECTS) will soon be implemented to facilitate charges for railway movement from Vizag to Nepal will movement of traffic-in-transit belonging to Nepal from be offset by the cheaper ocean freight," the port of arrival in India. Currently cargo clearance is reveals P L Haranadh, Deputy Chairman done through physical inspection which is time-consum- of the port. It has been reported that, due ing and costly for business. ECTS will reduce cost and to efficient cargo handling, and flexible time as it speeds up cargo clearance at border crossings. offers from Maersk Line and CONCOR, Trade imbalance which have monopoly rights to take rail- In 2015, Nepal imported goods worth $6.6 billion and way rakes to Nepal, Visakhapatnam Port exported goods worth $660 million only. About 60 per operations are cheaper than those at Kolkata. cent of Nepal’s exports and imports are routed through Meanwhile, Haldia Dock Complex is trying to woo India. Nepal’s export to third countries is very low. For Nepali traders by offering several concessions, such as 10 the past 13 years, more than 96 per cent of containers en- days’ free time for road-bound containers, 20 days’ free tering Nepal carrying third-country imports from Indian

40 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA

SPECIAL FEATURE

NEPAL TRADE IMBALANCE

2015-16 2016-17

IMPORTS 20,188 33,196 containers containers

2016-17

1,254 31,942 containers with Empty Containers EXPORTS exports

The Chinese trap China is conducting a feasibility study for a railway line connecting Kathmandu to Lhasa in Tibet, cutting straight through the Himalayas at an estimated cost of $8 billion. The project is part of the "One Belt, One Road" initiative to which Nepal has given its accord. China has extended its rail network in Tibet up to Shigatse and plans to extend upto the Nepal-China border by 2020. These cross-border rail services will link Nepal’s planned east- west railways to the railways from Kerung to Kathmandu. China controls only 14 per cent of Nepal’s trade port have been returning to demand, but is now aiming to significantly shift Nepal’s India empty. Of the 100 con- transit trade from India to itself. Even though Nepal has tainers bringing imports to geographical proximity to India but the high cost of logis- ICD Sirsiya of Birgunj, only tics makes the Chinese rail proposal seem more viable. four containers return with exportable goods. Issues faced by Nepali traders The number of containers reaching Sirsiya ICD The transit procedures and custom formalities on the increased by 14 per cent to 33,196 in 2016/17. A total of Indian side increase the cost and time for transit trade. 33,196 containers entered Nepal with imports in Fis- The infrastructure at the port, the system of train forma- cal Year 2016/17, as compared to 20,188 containers in tion as well as the handing over procedure of custom 2015/16. Of them, only 1,254 containers returned with cleared containers by the clearing agent to CONCOR are exports. A total of 31,942 containers, which is 96.22 per said to cause the delay. cent of the total containers, returned empty. The transit cargo for import from Kolkata/Haldia Of the 237,397 containers that brought import goods to Kathmandu via Birgunj takes 16 to 27 days at times to the Sirsiya ICD in the past 13 years, only 8,638 con- through rail and for export it takes around 7-8 days by tainers carried back Nepal’s exports. road and nearly 14-18 days till it is on board a vessel. The number of containers entering Nepal has been Poor road conditions and old vehicles used for logis- increasing every year, but as the containers have to return tics are the main cause of delays. The shortest distance is empty, traders are forced to pay for their return journey Kathmandu-Birgunj-Kolkata which is 1,256km. Distance as well. from Birgunj to Kolkata by rail is 704 Km and time it Capacity constraints takes is 3-4 days and sometimes it extends to 15 days. The rail yards at Raxaul and Birgunj are said to be ICDs have reduced the cost of transit for cargos weighing suffering with serious capacity constraints. It took 25 above 20 metric tonnes only. hours on an average in 2016-17 to unload a rake, against The average cost of bringing in a TEU load goods to the stated capacity to unload two-and-a-half rakes a day. Birgunj ICD and returning of empty costs approximately At Raxaul the railways had restricted loading on 35 of the $1,950. 90 days from April to June last year. To ease congestion, The transhipment time taken at Kolkata/Haldia Ports the railways is opening a new goods shed at Ramgarwa. is 4-7 days. The feeder vessel takes minimum 7-9 days Improving rail connectivity to reach Kolkata/Haldia from Singapore or Colombo. Rail service from India to Janakpur in Nepal is being The presence of multiple checking agencies at the border revived, connecting Nepal to the rest of the subcontinent. increases the transit time.

SEPTEMBER 2017 / MARITIME GATEWAY 41 SOUTH ASIA MALDIVES SPECIAL FEATURE

TOP 5 EXPORTS FROM INDIA (QUANTITY IN THOUSANDS) TOP 5 IMPORTS TO INDIA (QUANTITY IN THOUSANDS) Animal Trees,Roots Vegetables Fruits & Coffee Rubber Leather Wood Wood Pulp Paper & Products Flowers Nuts Tea & Spices Articles Articles & Paper Paper Board

16,88,096 1,12,354 26,104 22,579 16,915 6,510 4,096 256 188 170 Expanding port capacity Imports are growing and the primary port in Male’ has reached its maximum capacity. Thus the focus is on expanding port capacity, including transhipment and developing warehousing and SEZs by Sisir Pradhan

ith a steady economic growth of about 7 per Island. Port sector is one of the strategic sectors in cent per annum in the last two decades, the Re- which the government intends to attract investment as Wpublic Of Maldives is one of the fastest grow- the country’s primary port Maldives Port in Male’ has ing economies in South Asia. The island nation largely already reached its maximum capacity utilization. Hence, known for its tourism industry and service industries such the government intends investment in Thilafushi Port as construction, shipping, telecommunication, aviation development as a new expanded Port for the Maldives and banking. The country has a GDP of $2,292 million. and the Male’ region. With existing economic growth Its exports are worth $167 million. The country has initi- rates, inbound cargo is expected to grow at an annual ated enacting of a SEZ Act to facilitate special economic average rate of 16 per cent, reaching 1.9 million tonnes by incentives and a flexible regulatory environment for mega the year 2032. Petroleum products are the largest imports investment projects. The country’s strategic geographical accounting for about 30 per cent of its total imports. location at the heart of the Indian Ocean, at the cross- Hence, oil and gas exploration are one of the areas where roads between East and West is one of the key contribu- Maldives is encouraging investment and partnerships. tors to the maritime trade in the region. Maldives Ports Apart from which, Ihavanddhippolhu Integrated Devel- Ltd manages and operates all ports in the country. Male opment Project (iHavan), which includes development of is the major sea port for the country, and Male’ Commer- Transhipment Port, Airport Development, Warehousing cial Harbour handles all varieties of cargo vessels at the and Export Processing Zones, and a Cruise hub, among berth except dry bulk, liquefied petroleum and gases. It others is another key strategic investment projects for the also has facility to handle cargo at anchorage using barge country. India and the Indian Ocean archipelago have a operation. Most of the container ships are handled at total trade of $208 million in FY 2016-17, with a Y-o-Y alongside berth. Tanker terminal is available at Funadhoo growth of about 14 per cent. India and Maldives signed and Thilafushi Island, and tankers are also handled at a trade agreement in 1981, which provides for export of anchorage along with ship-to-ship transfer facility. LPG essential commodities. Bilateral trade between the two and LNG handling facilities are available at Thilafushi countries stands at `700 crores.

42 MARITIME GATEWAY / SEPTEMBER 2017 SOUTH ASIA BHUTAN SPECIAL FEATURE

LAND OF OPPORTUNITIES FDI and public–private partnerships in infrastructure projects are welcome as Bhutan offers significant opportunity for projects in the areas of airport infrastructure, highways, bridges, tunnels and dry ports

by Sisir Pradhan

ith a GDP growth rate of 6.49 per cent (2015), Bhutan has also initiated movement of goods to Bangla- the Himalayan kingdom is a buoyant eco- desh through Banglabandha inland port. Notably, Bhu- Wnomic growth story of South Asia despite tan, Bangladesh and India had signed a tripartite agree- being landlocked. The country has earned itself a special ment in 1997 for land movement of goods and recently place not only in South Asia but in the whole world India has also initiated efforts for broader trade relation for considering Gross National Happiness (GNH) as a with Bhutan and Bangladesh through land movement of critical growth index. As per the development indicators, EXIM goods. Jaigaon acts as the most important border Bhutan has a per capita income of $2,500, which is one trading point between India and Bhutan, catering to of the highest in South Asia. In the last three decades, around 90 per cent of the Bhutan trade. Recently, efforts Bhutan’s economy has expanded at a robust pace driven have been initiated to develop Jaigaon Integrated Check by hydropower sector. The country’s economy is largely Post (ICP) to provide seamless goods movement. The based on tourism, agriculture, live stock and forestry. In location of the ICP is being considered at a green field 2016, the country’s total imports was valued at $4,57,019 site at Balon Chopati situated on Pasakha Access road and exports was $1,40,604. Majority of exim shipment portion of the Asian Highway 48. Moreover, Bangladesh, is through Visakhapatnam and Kolkata. During FY2016 Bhutan, India and Nepal Motor Vehicle Agreement is exports from India to Bhutan touched $469 million and envisioned to improve economic co-operation in the imports from Bhutan to India was $281 million. India region. A new agreement on Trade, Commerce and Tran- continues to remain Bhutan’s largest trading partner. sit between India and Bhutan has come into force with Major imports from India to Bhutan are diesel, parts of effect from 29th July 2017. Bhutan in recent years has hydraulic turbines including regulators, ferrous products, been encouraging FDI and public–private partnerships in petrol, wood charcoal, other coal, coke and semi coke, infrastructure projects. While Bhutan’s domestic market is Portland cement, mineral products, base metals and ar- small, the country’s special relationship with India offers ticles, machinery, automobiles & spares, animal products, duty free access to India and preferential access to the chemicals, wood, plastic, rubber and agricultural prod- sub-continent through SAFTA. Duty free and preferential ucts. The major items of export from Bhutan to India are access also exists on certain goods from Bhutan to the electricity from the four hydropower plants at Basochhu, EU, US and certain other countries in the region. Due to Chukha, Tala and Kurichhu; Ferro silicon, Portland ce- Bhutan’s limited financial and resource capacity, it offers ment, dolomite, carbides of calcium, carbides of silicon, significant opportunity for projects in the areas of airport cement clinkers, timber and wood products, and a range infrastructure, highways, bridges, tunnels, cable cars, and of agricultural products. With the beginning of 2017, logistics facilities such as dry ports, among others.

SEPTEMBER 2017 / MARITIME GATEWAY 43 PORT OF ANTWERP

The pharmaceutical industry is steadily expanding its sea freight Services volume owing to lower fares and availability of stricter and more reliable control of temperature. customised The Port of Antwerp is ideally positioned to leverage on this air to for pharma ocean trend by Deepika Amirapu

he world is looking for cheaper drugs and India available to patients across the globe. A majority of has proved it has the capability to deliver. The the bulk drug and active pharmaceutical industry that Texport of generic medicines is one of India’s functions out of Hyderabad reckons that logistics - both strengths and in the last two years India has stepped far at the port and inland play a crucial role in cutting raw- ahead for China. To most continents and regions where material supply time and export time. generic consumables are higher such as Latin America, While most ports such as Chennai, Jawaharlal Nehru the US, the Middle East and Northern African (MENA) Port Trust and Visakhapatnam Port ship exports out region, Indian exports are significantly higher than its of India, Indian pharmaceutical firms ask for better Asian counterpart’s. value-added services to ensure their cargo is ready for In fact, India leads China in exports to the EU as consumption to destinations where the vials and tablets well. In 2016, India’s exports were worth $1.56 billion are shipped to. as against China’s $1.36 billion. If India has to remain Two recent developments have led the pharma sector ahead of China even in the American and South East turn to sea freight and increase the quantum of shipments Asian and Australian regions, it would require more moved by sea. The first factor is the increasing price than the manufacturers’ effort to make the drugs pressure from among others the so-called "generics,"

44 MARITIME GATEWAY / SEPTEMBER 2017 making less expensive sea transport an attractive alternative. Moreover, technological advances now THE ANTWERP ADVANTAGE permit stricter and more reliable control of temperature conditions for reefer containers, enabling shipping companies to offer the same quality guarantees as Antwerp tends to be the last European port of airfreight operators. lading for trans-Atlantic services and also the first Port of Antwerp, which is one of the three largest port of call from Asia. This makes it the ideal hub gateway ports at Europe has commenced customising for fast European distribution of import goods, and services for many an industry that ship cargo to various for bringing drugs made in Europe quickly to their destinations in Europe. overseas destinations. Therefore, from fresh fruit to pharmaceutical products The warehouses operated by the specialist logistics that requires temperature-controlled handling, the Port of service providers in Antwerp comply fully with Antwerp offers an uninterrupted cold chain. In addition the Good Distribution Practices (GDP) for the to discharging and loading vessels, the port offers many pharmaceutical industry, kept either refrigerated added value services that meet the specific requirements (2-8°C) or at room temperature (15-25°C). of every product. Logistics operators expanding: Yusen Logistics With bulk of Indian pharmaceutical firms using is expanding its existing facilities from 18,000 m² the Port of Antwerp in Belgium to move their wares to 26,000 m², Panalpina is converting an existing to France, Germany and other countries, the Port is warehouse to a dedicated facility of 1,600 m² customising facilities to adapt cargo closer to the needs of (with a further expansion capability to 10,000 m²) the selling market. Labelling, pricing and re-packaging is while Katoen Natie – in addition to its 25,000 m² also undertaken for companies to ensure facility – is building an additional hub of 8,000 their products can be bought right off to 10,000 m² with 25 loading and unloading bays the shelf once they are transhipped. Luc for consolidation and deconsolidation of deep Arnouts, Chief Commercial Officer, sea consignments. These logistics operators Antwerp Port Authority said, “Ports of together serve the top 10 players in the worldwide tomorrow will no longer be facilitators of pharmaceutical industry. movement alone. They have to transform to be next generation handlers of port traffic.” Even as ports such as Antwerp offer value-added services beyond bagging, stuffing and de-stuffing, This would save the Indian pharma company a week’s logistics firms are extending their products and services time in sending it straight to the wholesaler to retailer to function as industrial logistics players to adapt to each than the local production arm or partner who would industry’s needs. “The idea is to cut down on production otherwise re-pack it at a location away from the port. postponement by respecting transit time,” said Arnouts. Customs formalities are also expertly handled at the port Recent investments by three big logistics service while the drug inspectors survey cargo before it is let out providers in Antwerp underline the port's crucial at the port. Separate warehouses for pharma products position in the worldwide pharmaceuticals industry. accompanied by cold chains makes the sensitive products Together these logistics operators serve the world's top safe from damage. 10 pharmaceutical companies, offering them a range of “The pharmaceutical industry is steadily expanding customised services. its sea freight volume year by year. Since our GDP The Antwerp warehouses act as consolidation and warehouses are located within the port we are ideally crossdock hubs where goods from various European positioned to support the air-to-ocean trend. The next production sites can be grouped for particular step will be horizontal collaboration in which we destinations. And vice-versa, large consignments can consolidate the products for various pharmaceutical be broken down into smaller deliveries for different companies in a way that does not compromise quality,” destinations within Europe. The warehouses operated An D’hondt, head of business line Healthcare at by the specialist logistics service providers in Antwerp Katoen Natie. comply fully with the Good Distribution Practices (GDP) Steady availability of temperature controlled reefers for the pharmaceutical industry, kept either refrigerated and warehouses at ports on the European leg has made a (2-8°C) or at room temperature (15-25°C). case for ocean transport to be both safe and cost effective. The blisters that contain tablets, for instance, will be If Indian logistics players work in tandem with the Port repackaged at Antwerp to be shipped further to France, of Antwerp, sea movement of medicines to Europe could Germany and other Nordic and Scandinavian countries. soon be a safer reality.

SEPTEMBER 2017 / MARITIME GATEWAY 45 PORTS

Dragon on an acquisition spree Chinese operators take advantage of improved global container port demand growth prospects

he outlook for global container of the US administration, and the the last year, more than half of the port demand growth is now impact of Brexit. This is perhaps acquisitions by global/international Tmore optimistic and Chinese one reason why the global container terminal operators have been made by players are on the acquisition trail in port capacity is projected to increase Chinese players. The valuation of port an aggressive and highly confident by a CAGR of 2.7 per cent, based and terminal businesses range between manner. Major M&A deals are on confirmed additions only. This 13x and 26x EV/EBITDA. Chinese changing the landscape, with more is markedly lower than the forecast companies are typically prepared to to come, according to the Global demand, and hence, average utilisation pay a premium. Container Terminal Operators Annual levels are expected to rise. Cosco Shipping Ports has moved Report 2017, now in its 15th year Neil Davidson, Drewry’s senior up Drewry’s operator league table of publication by global shipping analyst for ports and terminals said: as a result of the merger of Cosco consultancy Drewry. “While there are certainly some and China Shipping, and will move Drewry’s container port demand encouraging signs for the demand further up in the coming years due forecast is more positive than in growth outlook, the risk profile for to the acquisition of Noatum and last year’s report, exhibiting a 4 per terminal operators has increased OOCL’s terminals. The China Cosco cent CAGR and adding a further and most of the traditional global/ Shipping group is projected to add the 152 million teu of port throughput international players remain most capacity of any of the global/ to the global total by 2021. This is cautious. The exception to this are international terminal operators over a consequence of improved port the Chinese port companies who are the next five years. throughput growth rates in the second pursuing expansion and investment “The Chinese players are more half of 2016 and into 2017, and a both at home and overseas in an comfortable with risk than the more positive general global economic unprecedentedly aggressive manner.” established international operators outlook. M&A activity in the port sector right now, and have a geo-political That said, there remain numerous is at a high level. About $3.1 billion strategy rather than a purely financial risks and uncertainties at present, worth of deals have been struck one. They are snapping up assets and including tensions in the Middle so far in 2017, driven by Chinese opportunities and have the appetite East and Korean peninsula, the companies such as Cosco Shipping and financial clout to take many more protectionist and unpredictable stance Ports and China Merchants Ports. In in the coming years,” added Davidson.

46 MARITIME GATEWAY / SEPTEMBER 2017 HARDWARE IMPORTS

Not a 'soft' issue Indian IT industry is facing certain issues in importing hardware. MG spoke to the Software Technology Parks of India and a few of its big leaguers to understand the pain points. Read on to know more… by Deepika Amirapu

he Indian software industry’s two approvals be given at the time of right purchase of hardware for use by annual exports of services ac- import and be cleared at the bonded the industry, such an item should ap- Tcount for $120 billion from five area? pear in the Customs list of equipment. key metros of the country. What is Industry suggestion: If the docu- In the absence of the item not being your guesstimate on the amount of ments can be made digital, clearances part of the usual list, the Customs hardware and other equipment they by and from all parties can be sought asks for a technical write-up from would require to export this value of within the free period to avoid pay- the importer, holding the equipment services? A lot, you’re right. And most ment of demurrage. in the bonded area until it receives a of their imports of electronic equip- Import of used equipment: The satisfactory reply. This causes delay in ment come by sea. MG spoke to the government has currently restricted projects leading to time and cost over- Software Technology Parks of India import of used equipment enforcing runs, notwithstanding the inventory and a few of its big leaguers to under- the anti-dumping law and the customs charges. stand if the sailing has been smooth. objects to such imports. Software firms Industry suggestion: The STPI Here’s where the industry needs help: have to obtain clearances from the and Customs should work together in Clearance at Customs: Software Ministry of Environment and Forests listing all possible equipment that is companies need two approvals from before any equipment is imported. cleared for imports so as to not with- the Customs and the Central Excise However, imports are allowed under hold any equipment. Any statement Department to import equipment in specified cases which are made known required should be obtained directly to India. Once the STPI authorises only at the time of import if the firm from the STPI as the nodal body and import of a certain quantity of equip- asks for clearance stating the purpose. not the shipper. ment, the two government monitor- Industry suggestion: By law, if GST: The announcement of this ing agencies are expected to clear the used equipment is imported for a short taxation has eliminated the require- Bill of Entry and issue a clearance to duration for a specified project, import ment of many a document required ensure the import is not held up. How- of such products should be allowed. by the Central Excise Department ever, delay by either agency causes the It would help if the Customs makes and introduced a few fresh ones. The importer to bear inventory costs and know the procedure stating the permis- industry hopes there is a clear list of pay a huge sum for insuring and stor- sible limits – quantity and value, pay- documents to be submitted to the Cus- ing equipment. ment of excess duties can be avoided. toms for import-approval to hasten the Industry suggestion: Can these Import of Hardware: For any out- clearance procedure.

SEPTEMBER 2017 / MARITIME GATEWAY 47 PORTS

KARAIKAL PORT RELOADED The young port hugging the coast of Coromandel, within a short span of less than a decade had its share of early success and agony. But in the last two years it had scripted a turnaround story registering healthy cargo growth and putting a point that it is too early to write it off by Sisir Pradhan

ast paced industrial and econom- which followed by some more equity ic activities of Tamil Nadu have investments in subsequent years. Dur- Fresulted in establishment of a ing FY2011-12, the port handled 6.01 number of supercritical thermal power million tonnes of cargo as compared plants in the state. Being high volume to 4.75 million tonnes in FY2010-11 coal guzzlers, these power plants have registering a Y-o-Y growth of 26.53 per been the backbone of deep draft ports cent. in the state as principal users. Nestled The Fall and Rise between two major ports Chennai and After the initial flares, cargo projec- growth in the last financial year. The V.O. Chidambaranar Port, Karaikal tions for the port could not materialize upcoming power plants in the hin- Port has benefitted from the thermal as compared to investments made for terland, the industrial rich region of power projects such as Cuddalore the construction of new berth capaci- central Tamil Nadu and our existing IL&FS thermal power plant. Apart ties. Overall economy was on a rest, businesses will drive more volume in from which, Karaikal is closest to cen- and the big ticket projects especially the following year with a growth of 20 tral Tamil Nadu districts like Trichy, the coal-based thermal power plant per cent in the next 2 years.” Namakkal, Salem, Karur, Tirupur proposed in the vicinity of the port Notably, there was fall in coal Pudukkottai, Erode and Ariyalur took too long to hit the ground. As import after the Union Coal Ministry’s which are traditionally vibrant with a result in the subsequent years the whip on reducing import and ramping commercial activities. port struggled to remain afloat. By up domestic production, but Karaikal Around this time in 2016, the mar- December 2012 India Ratings issued remained unaffected since Cuddalore ket was abuzz with reports of Karaikal a negative outlook to the port. But IL&FS thermal power project im- Port in look out for buyers and for long the developments in the last two years ported low ash content coal from its time there was news of some or other show signs of a turnaround as the port captive coal mine in Indonesia. investor looking to pick up stake in has renewed agreement with Ultra- Reddy said, the port has handled the port project, including Shapoorji tech Cements for handling of coal, 9.1 MMT of cargo in FY16-17, and Pallonji Group. Investments in port pet coke and lime stone. The port’s diversified cargo including Coal, sector has always been a tricky affairs cargo had come down to 4.89 MMT in Fertilizer, Cement, Edible Oil, Crude for even the most seasoned investors FY2014-15 as compared to 6.23 MMT oil, Clinker, Iron Ore, Project Cargo, as these capital intensive infrastructure in FY2013-14, and again increased to Raw Sugar, Lime Stone, Wheat, Clay, projects are perfect ramification of 5.96 MMT in FY2015-16 with revenue Gypsum, and Logs/ Wood Chips. chicken and egg connotation. It was touching `260.65 crore in FY2015-16 The promoter stressed, “Growth is ex- the year 2009, when Karaikal was as against `226.86 crore in FY2014-15. pected to come in the back drop of in- called operational and the investors Speaking on the turnaround of the creasing capacity utilization, as there is were confident about the potential of port, GRK Reddy, Promoter, Director, a growing demand for coastal shipping the prosperous central and southern Karaikal Port said, “In FY2016-17, especially from power and steel firms. Tamil Nadu generating enough cargo coal has recorded a significant growth Mostly the growth will be through for the port. All assumptions were put of 6.17 million from 4.66 million in coastal cargo, RO-RO, containers, and to rest within a year of its commission- FY2015-16. There has been a high new businesses will commence from ing with the port announcing India demand for coal because of Cuddalore the current financial year in addition to Infrastructure Fund’s investment plan IL&FS thermal power project. Coastal existing cargo volumes like coal, iron of `1,500 million into equity share movement of clinker was initiated in ore, limestone, fertilizer, wood chips, capital towards the Phase II expansion, FY2015-16 and it recorded a drastic wood pulp and wheat.”

48 MARITIME GATEWAY / SEPTEMBER 2017 Presently in the Cauvery Basin area, GAIL operates approximately 276 Km pipeline located in five districts of the state of Tamil Nadu and Karaikal of Puducherry Union Territory. Through this pipeline, gas supply is being made to about 53 consumers which include power plants and industries. The present gas supply is around only 3.07 MMSCMD. Due to the continuous decline in domestic gas supply in the region which is unlikely to change in the future, almost all customers are fac- ing the gas shortages up to 70 per cent of their requirement. If the gas is made available, there will be an immediate gas demand of approx 0.8 MMTPA LNG equivalent around this pipeline. The GAIL’s pipeline network is less than 4 km distance from the Karaikal port and can be connected at two points.” The port also looks to reap the benefit from coastal cargo, which cur- rently involves inward coastal traffic of cotton, tiles and food grains into Tamil Nadu, and the port is in negotiation with coastal operators to bring cargo In scout for new businesses HINTERLAND FOR KARAIKAL PORT for industrial cities Trichy, Tanjore, Apart from existing forte in coal, Pudukottai, Ariyalur, Perambalur, the port is hopeful that container im- Nammakal, Karur, Salem and Erode port and export will reap the advan- which are relatively closer to the port. tages in the hinterland logistics as the The port is also in discussion with the industrial centers are closer to the port. car manufacturers and logistics players Moreover, the port has the advantage to explore new possibilities of coastal of being closer to hub port Colombo and international RO-RO vessel move- which helps container vessels to save Salem Erode ment. the voyage by 110 nautical miles com- Namakkal Looking at a bullish future pared to other ports. Ariyalur The delay in commissioning of the Tiruchirappali KARAIKAL The port has also received all ap- Tiruppur Karur PORT coal-based thermal power plant had provals for setting up LNG terminal severely affected earning of the port and it is expected to be commissioned Pudukkottai in the initial years, and based on their in the next 24 months to cater to the revamped cargo strategy to diversify needs of local companies. there is a sig- cargo portfolio has certainly started nificant switching demand for natural to give dividends to the promoters in gas from the industrial customers who terms of healthy cargo growth of 53 are presently consuming petroleum per cent from FY2014-15 to FY2016- products in the central Tamil Nadu’s 17. Nevertheless promoters of the highly industrial 14 districts, mainly port are optimistic about the future Trichy, Namakkal, Salem, Karur, Tiru- and they are unfazed by restriction pur Pudukkottai, Erode and Ariyalur. of the proposed LNG terminal will on import coal and forecast that the Currently, these districts are not con- be 1 MMTPA, which will be ramped ruling will increase consumption of nected to gas pipelines, however they to 5.0 MMPTA over the next 5 years indigenous coal which has to come by fall in 150 km radius area from the port based on demand, and the port has coastal route through the port to its ex- and would be economically feasible to secured all key statutory clearances to isting customers, because compared to supply through LNG by road option in initiate construction and operation of rail movement from coal fields, coastal the initial years. The port officials are the facility. movement will be economical. A di- hopeful that there is switching demand Giving details of potential for LNG versified cargo portfolio has helped the for LNG which would be equal to 1 business, GRK Reddy said, “We have port to de-risk from sole cargo depen- MMTPA. The port has plans to de- been at advanced discussion with four dency, meanwhile, it is to be seen how velop a floating LNG import terminal foreign LNG majors for development the port maintains its cargo handling in next 24 months. The Initial capacity of LNG import terminal at the port. performance in the coming years.

SEPTEMBER 2017 / MARITIME GATEWAY 49 COMMODITY: SEAFOOD

any of the shrimps and fish served on platter in the US, MEurope and some of the South East Asian restaurants find their origin from India. India is the second- largest fish producer in the world and accounts for nearly 6 per cent of global fish production. But still India’s substantial fishery resources are said to be underutilized and there is tre- mendous potential to further increase the output. Fish production has grown 6.5 fold in the last two decades with freshwater aquaculture contributing over 95 per cent. A few years back, in 2012-13, the South East Asian countries were the major Indian seafood export market (23 per cent) followed by European Union (21 per cent) and USA (21 per cent). However, in the recent years, the equation has changed with the US occupying the top notch followed by China, Europe and UAE. Ready to cook and ready to eat products are in greater demand in these markets. Sea- food exports are also a major source of foreign exchange and the industry had remained unshaken even dur- ing the economic meltdown in 2004. Indian seafood exports are the best in quality as our standards are very high and we have the largest number of European Union approved factories in the world. Exports Indian exports have posted a con- tinuous growth in the past five years RIDING ON A with Vannamei posting a growth of 23 per cent last year. While seafood exports happen through most of the ports in India, not every port has an up-to-date infrastructure for handling reefer cargo. “The ports in Odisha do HIGH TIDE not have reefer facility and so we have India leads the world in terms of to divert our exports to Vizag and Kol- kata ports. Even at these ports it takes seafood exports and a little help from about five weeks for exporting cargo to distant markets such as the US. To the government in terms of incentives, expedite exports ports need to start ex- subsidies and removing export barriers press services that can transport reefer cargo to distant markets in a shorter can help in exploring new markets. time,” avers Tara Patnaik, Chairman, by Omer Ahmed Siddiqui Falcon Marine Exports. As far as Andhra Pradesh is con- cerned majority of the exports happen from Vizag Port and Krishnapatnam Port, and very little from Kakinada Port. “Considering all India basis major exports happen from Vizag Port, JNPT and Cochin Port. These ports, are better equipped for handling

50 MARITIME GATEWAY / SEPTEMBER 2017 SEAFOOD EXPORTS IN TONNES

seafood exports,” reveals Padmanab- China is emerging as a very big is not an issue as every exporter has ham Vattikuti, National President, market. It’s time the Indian govern- its own transport network. Packaging Seafood Exporters Association of ment initiates a dialogue with the material, labour, electricity and inter- India. Chinese counterparts to bring down national freight are the major elements Reefer containers are loaded at the import duty in China. China im- that add up to the cost of the product. the factories and sent to the ports for ports seafood for value-addition which The cost of exports is mainly exports. The highways connecting the is then re-exported to other markets. controlled by the importing country, ports have been upgraded, so there are Other potential markets that can be for instance be it China, Vietnam or no teething issues as far as logistics explored include Russia, South Africa, India, the exporters have very little are concerned. In certain remote areas Taiwan and Korea, suggests Tara Pat- say and have to settle down to the like Bheemavaram in West Godavari naik. South Korea is also a potential price the importer is demanding, says of Andhra Pradesh, roads connecting market but the import duty there is Padmanabham. As the exporters to the national highways are narrow also high which makes Indian exports have to restrict themselves within the and need upgradation. When asked less competitive, says Padmanabham. international price bracket, hence they about the improvements needed in the Indonesia and Mexico are the look up to the government for incen- logistics chain Padmanabham is quick major competitors to India. As India tives and subsidies to be able to better to point at the CFS. He says, “A major leads in the quality of seafood export- compete in the international market. link in the logistics chain are the CFS ed hence the competition is mainly Export scenario and they need to improve the sanitary price-based. To make Indian exports Riding on a robust demand for and hygiene conditions to prevent con- more competitive, government can frozen shrimp and frozen fish in tamination of seafood during inspec- provide electricity at a cheaper rate to international markets, India exported tion by the Customs. Air conditioned processing facilities and incentives can 11,34,948 MT of seafood worth an all- halls that are maintained away from be offered to fish farmers, such mea- time high of $5.78 billion (`37, 870.90 bulk cargo storage area are needed for sures need to be introduced to bring crore) in 2016-17 as against 9,45,892 repackaging at the CFS.” down the cost of exports. Logistics tonnes and $4.69 billion a year ear-

SEPTEMBER 2017 / MARITIME GATEWAY 51 COMMODITY: SEAFOOD

SEAFOOD EXPORTERS HAVE RAKED IN HANDSOME PROFITS IN RECENT TIMES (IN `CRORE) 4.53 per cent to Japan, 3.02 per cent to the Middle East and 1.35 per cent to China. Japan was the major market for Black Tiger shrimp with a share of 43.84 per cent in terms of value, fol- lowed by USA (23.44) and South East Asia (11.33). Frozen shrimp contin- ued to be the principal export item to USA with a share of 94.77 per cent in dollar value while Vannamei shrimp to that country showed an increase of 25.60 per cent in quantity and 31.75 per cent in dollar terms. Vietnam, with a share of 76.57 per cent in value, was the major South East Asian market for Indian exports, followed by Thailand (12.93 per cent), Taiwan (3.88 per cent), Malaysia (2.60 per cent), Singapore (2.21 per cent), South Korea (1.50 per cent) and other countries (0.30 per cent). Viet- nam alone imported 3, 18,171 MT of Indian seafood, the quantity being much more than that of any other individual markets like US, Japan or China. The EU continued to be the third largest destination for Indian marine Mar 2002 Mar 2003 Mar 2004 Mar 2005 products with a share of 16.73 per cent in quantity. Frozen shrimp was the major item of exports, accounting for 40.66 per cent in quantity. Ex- lier, with USA and South East Asia to South East Asia increased by 47.41 ports of Vannamei shrimp to the EU continuing to be the major importers per cent in quantity. improved by 9.76 per cent in quantity while the demand from the European “Increased production of L. Van- and 11.40 per cent in dollar value. Union grew substantially during the namei, diversification of aquaculture Japan, the fourth largest destina- period. species, sustained measures to ensure tion for Indian seafood, accounted for Frozen shrimp maintained its quality, and increase in infrastructure 6.83 per cent in earnings and 6.08 per position as the top item of export, ac- facilities for production of value added cent in quantity terms. Frozen shrimp counting for 38.28 per cent in quantity products were largely responsible for continued to be the major item of and 64.50 per cent of the total earn- India’s positive growth in exports of exports to Japan with a share of 45.31 ings in dollar terms. Shrimp exports seafood,” said Nirmala Sitharaman, per cent in quantity and 77.29 per cent increased by 16.21 per cent in terms of Minister for Commerce and Industry. in value out of the total exports to that quantity. Frozen fish was the second The overall export of shrimp dur- country. largest export item, accounting for a ing 2016-17 was pegged at 4, 34,484 Besides frozen shrimp and frozen share of 26.15 per cent in quantity, MT worth $3,726.36 million. USA was fish, India’s other major seafood prod- registering a growth of 26.92 per cent the largest import market for frozen uct was frozen squid, which recorded in terms of value. shrimp (1, 65,827 MT), followed by a growth of 21.50 per cent and 57 per USA imported 1,88,617 MT of the EU (77,178 MT), South East Asia cent in terms of quantity, and dol- Indian seafood, accounting for 29.98 (1, 05,763 MT), Japan (31,284 MT), lar earnings, respectively. Export of per cent in terms of dollar. Export to Middle East (19,554 MT), China (7818 frozen cuttlefish showed a decline in that country registered a growth of MT) and other countries (27,063 MT). quantity terms, but increased in dollar 22.72 per cent in terms of quantity. The export of Vannamei shrimp, terms by 16.95 per cent. South East Asia remained the second a major seafood delicacy, improved Dried items registered a growth largest destination of India’s marine from 2, 56,699 MT to 3,29,766 MT in of 40.98 per cent in terms of quantity. products, with a share of 29.91 per 2016-17, registering a growth of 28.46 Indian ports handled a total marine cent in dollar terms, followed by the per cent in quantity. In value terms, cargo of 11,34,948 tonnes worth EU (17.98 per cent), Japan (6.83 per 49.55 per cent of total Vannamei `37,870.90 crore ($5,777.61 million) cent), the Middle East (4.78 per cent), shrimp was exported to USA followed in 2016-17 as compared to 9,45,892 China (3.50 per cent) and other coun- by 23.28 per cent to South East Asian tonnes worth `30,420.83 crore tries (7.03 per cent). Overall, exports countries, 13.17 per cent to the EU, ($4,687.94 million) in 2015-16.

52 MARITIME GATEWAY / SEPTEMBER 2017

SEPTEMBER 2017 / MARITIME GATEWAY 53