New Opportunities Unveiled in Shipping Sector
New Opportunities Unveiled in Shipping Sector
Year Ender-2015
The Ministry of Shipping has taken many
proactive and progressive interventions in the areas of shipbuilding, port
development, inland waterways and coastal shipping this year for the
development of the maritime sector in the country. These initiatives can be
summarized under the following heads:
A. KEY
INITIATIVES
1. Sagarmala
Project
‘Sagarmala- Concept and Implementation’ was approved by the Union Cabinet
on 25.03.2015. The Project Development Consultants were appointed on
15.05.2015 to develop a National Perspective Plan (NPP) for the Sagarmala
Programme. NPP is currently under preparation and would be finalized by
31.01.2016. As part of the NPP development-
a) The draft report on
Origin-Destination (OD) Study, for POL & LNG, Iron Ore & Steel, Coal,
Container, Food Grains and Fertilizer is under review and the final report is
being prepared based on the inputs received from the relevant stakeholders. On
the Coal OD front, the Ministry of Shipping is currently monitoring key railway
connectivity projects from Talcher-Paradip and discussing with Ministry of
Railways to fast track the same.
b) The draft Master Plan for Ennore
has been submitted in November, 2015. The draft Master Plans for Paradip, JNPT,
Kolkata, Vizag, Kandla, Haldia and Ennore will be submitted by 31.12.15. Draft
Master Plan is currently under preparation for Tuticorin, Mumbai, Kochi,
Mormugao and Mangalore.
c) Finalized Techno Economic
Feasibility Report (TEFR) for Sagar Port and the draft TEFR for Vadhavan Port
submitted on 30.11.2015. TEFR for Paradip Outer Harbour is under preparation.
d) Coastal Economic Zone (CEZ)
Perspective Plans are also under development.
While the NPP is under development, 12
projects have been considered for part funding by Sagarmala Development Company
(SDC) for implementation, DPR is under preparation for 10 projects, 55 road
projects and 28 rail projects have been shared with MoRTH and Ministry of
Railways respectively for their consideration. The institutional
mechanism to implement the initiative includes the National Sagarmala Apex
Committee (NSAC), Sagarmala Coordination & Steering Committee (SCSC), State
Sagarmala Committees (SSC) and the Project SPVs. The SCSC and NSAC have been
constituted and their first meetings were held on 01.10.2015 and 05.10.2015 respectively.
West Bengal, Odisha and Puducherry have constituted their SSCs and other
Maritime States have been requested to do the same. The Ministry of Shipping
has also taken up development of 31 island lighthouses.
2. Special
Purpose Vehicle to provide efficient last mile rail connectivity to Major Ports
Based on the Cabinet decision dated 25.03.2015, an SPV, to provide efficient
last mile rail connectivity to Major Ports, with equity from 11 Major Ports and
Rail Vikas Nigam Ltd. was incorporated under the Companies Act. This SPV
‘The Indian Port Rail Corporation Limited’ started functioning from July 2015
and since then has taken up 23 projects which are critical for last mile rail
connectivity to the Major Ports. The registered office of the company is
at New Delhi and corporate office is at Mumbai. The SPV would undertake the
following Projects:-
· Last
mile connectivity to Major Ports;
· Modernization
of evacuation infrastructure in Ports;
· To
operate and manage internal Port Railway system;
· To
raise financial resources for funding Port related Railway Projects
3.
Incentive for Shipbuilding and ship-repair
Industry
Government has recently approved incentives to
promote domestic shipbuilding industry. These include (i) financial
assistance to domestic shipyards for any vessel built by them subsequent to its
delivery and (ii) relaxation of eligibility criteria for procurements or repair
of vessels done by Government departments or agencies including PSUs for
government purpose or for their own purpose to grant Right of First Refusal to
domestic shipyards.
The
Government has addressed the problem of inverted duty structure in ship
manufacturing. Inputs used in ship manufacturing and repair have been
exempted from Customs and Central Excise Duties with effect from the 24th of
November, 2015. Prior to this exemption, while ships could be imported at
almost negligible rates of Basic Customs Duty (BCD) and nil rates of
Countervailing Duty (CVD), the inputs used in ship manufacturing and repair
attracted normal rates of BCD and CVD. This put the Indian shipyards, who build
ships for the domestic market, at a cost disadvantage. Correction of this
inverted duty structure was therefore necessary.
4.
Jal Marg Vikas Project
In the Budget Speech for 2014-15, it was announced that a project on the river
Ganga called ‘Jal Marg Vikas’ (National Waterways-I) would be
developed between Allahabad and Haldia to cover a distance of 1,620 kms, which
would enable commercial navigation of at least 1,500 tonne vessels and that the
project would be completed over a period of six years at an estimated cost of
Rs.4,200 crore. The Project’s objective is to provide an environment friendly,
fuel efficient and cost-effective alternative mode of transportation,
especially for bulk goods, hazardous goods, captive cargo and over dimensional
cargo.
Government has commissioned three expert studies to assess the interventions
required to achieve greater clarity on the entire project and its impacts.
These studies are (i) Detailed Feasibility Study on NW-1 and Detailed
Engineering for its Ancillary Works; (ii) Environmental and Social Impact
Assessment (ESIA), Environmental Mitigation Plan (EMP) and Resettlement Action
Plan (RAP); and (iii) IWT Sector Development Strategy and Market Development
Study. In addition, Inland Waterways Authority of India, which is the
implementing agency of the project, has conducted comprehensive stakeholder
meetings at Kolkata, Varanasi, Patna, Delhi and Farakka, wherein valuable
feedback of environmentalists, industry, academics and the wider society was
obtained. The projects include construction of terminals, jetties, river
training and conservancy works, modern automated information system, navigation
aids, etc. The construction of the projects is expected to commence from March,
2016 and the last projects to be taken up may extend up to five years.
5. Customs
and Excise Duty Exempted on the Use of Bunker Fuels for coastal transportation
of EXIM and empty container and for domestic containers transported alongwith
EXIM and empty containers.
This
tax incentive for transportation along the coast will go a long way in
enhancing Indian tonnage as well as in promoting development of transportation
hubs in India.
6.
Cabotage Relaxed for Special Vessels
The
Government has relaxed cabotage for special vessels such as Roll-On Roll-Off
(Ro-Ro), Hybrid Roll-On Roll-Off (Hybrid Ro-Ro), Roll-On Roll-Off cum Passenger
(Ro-Pax), Pure Car Carriers, Pure Car and Truck Carriers, LNG vessels and
Over-Dimensional cargo or Project Cargo Carriers for a period of five years
w.e.f 02-09-2015. With this relaxation, vessel operators will be allowed
to bring foreign flagged vessels of this category to ply on the coastal routes.
Such special vessels are in short supply in the country but since they cater to
specific class of cargo, their availability will make it possible to shift
cargo movement for these commodities from road and rail to coastal
shipping.
7.
Developing 78 lighthouses as tourism centers
The Ministry of Shipping, along with the Directorate General of Lighthouses and
Lightships (DGLL) has drawn up an ambitious programme to develop 78 lighthouses
in the country as centres of tourism in the first phase under Public Private
Partnership (PPP). The identified lighthouses are in Gujarat, Maharashtra, Goa,
Karnataka, Kerala, Lakshadweep, Tamil Nadu, Puducherry, Andhra Pradesh, Odisha,
West Bengal and Andaman and Nicobar Islands.
B. PROMOTING
EASE OF DOING BUSINESS
This has been at the core of the efforts of the Ministry during the year. Focus
has beenonsimplifying procedures by removing irritants that make it cumbersome
to carry on business smoothly. The major highlights in this regard are:
1. Obsolete
Rules under the Merchant Shipping Act, 1958 weeded out
The
Ministry of Shipping has decided to rescind 13 Rules under the Merchant
Shipping Act, 1958 (as amended), having found them to be obsolete and
unnecessary. Out of the 13 Rules, 6 has been rescinded and 7 have been
pre-published before rescindments.
2. Ship
Repair Units no longer required to register with DG Shipping
The
Ministry simplified the procedure and eliminated the requirement of
registration of Ship Repair Units (SRUs) with Directorate General (Shipping).
Ministry of Finance and Ministry of Commerce & Industry have been informed
to extend concessions and facilities to SRUs without insisting on the
requirement of registration with DG (Shipping).
3. Re
Rolled Steel from Ship Breaking allowed for Shipbuilding
To
meet the growing demand for steel by ship and barge builders, the Ministry
decided that re-rolled steel obtained from re-cycling yards/ship breaking units
would be certified for use in construction of inland barges, river sea vessels
(RSV Types 1 & 2) and port and harbour crafts, after ascertaining its
sourcing and processing. This will help in bringing down the cost of
constructions of barges, river sea vessels and port and harbour crafts.
4. E-governance
initiatives
Initiatives of Directorate General of Shipping
The
following services have now been made online -
· registration
of ships.
· application
and seat booking for written and oral examinations.
· application
and processing of Continuous Discharge Certificates (CDCs), renewal and
replacement/duplicate CDCs.
· application
processing and issuance of Certificate of Competencies (CoCs), dangerous cargo,
GMDSS, Cookery certificates.
· application,
processing and issuance of chartering permission.
· issue
of registration certificate to transport operators.
· Master
checker for seafarers.
Initiative of
Directorate General of Lighthouses and Lightships (DGLL)
· Online
Collection of Light Dues
C. MAKE
IN INDIA INITIATIVES
Many initiatives have been taken up in the area of ship building and
manufacture of dredgers, promoting the objectives of Make in India
1. Product
Diversification by Cochin Shipyard Ltd(CSL)
· CSL
has received license from GTT of France of Mark III Flex technology for
making cargo containment systems for LNG carriers.
· CSL
has entered into a technology tie up with Samsung Heavy Industry of Republic of
Korea for manufacture of LNGvessels. With the above two initiatives CSL
becomes the first port in India to manufacture LNG carrying vessels.
· CSL
has manufactured six Fast Patrol Vessels for the Indian Coast Guard
and one Platform Supply Vessel
· CSL
has undertaken a project to build a passenger ship of 1200 capacity
for Andaman & Nicobar Islands
· CSL
has entered into a technology tie up with IHC Holland BV for
manufacturing dredgers.
· CSL
has constructed a state of the art Buoy Tender Vessel for Directorate
General of Lighthouses and Lightships
2.
Initial Public Offer of Cochin Shipyard Limited
The
Cabinet Committee on Economic Affairs has accorded approval for issue of an Initial
Public Offer (IPO) of Cochin Shipyard Limited (CSL). The approval is for
issue of an IPO to the public consisting of 3,39,84,000 equity shares of Rs. 10
each amounting to an equity capital of Rs. 33.984 crore of CSL consisting of
fresh issue of 2,26,56,000 equity shares and sale of Government of India's
stake in CSL worth 1,13,28,000 equity shares of Rs. 10, through a public
offering in the domestic market according to Securities and Exchange Board of
India (SEBI) rules and regulations.
The proceeds of the IPO will be used to set up new Dry Dock in Cochin Shipyard
and International Ship Repair Facility at Cochin Port.
D. INITIATIVES
IN PORT SECTOR
1. Performance
of ports improves
After a fall in their performance during 2008-14,
the performance of major ports showed improvement in 2015. The focus
of the present government is on modernization of Major Ports and increasing
their operational efficiency. With new initiatives, Major Ports have shown an
improvement in their performance with the volume of cargo handled increasing by
4.6% and revenue increasing by 8.7% in 2015.
2.
Benchmarking performance of Indian Ports to International Standards
A study to benchmark performance of major Indian Ports
to comparable international ports has been completed and the recommendations of
the study are being implemented.
3. Mechanisation
of East Quay (EQ) Berths-1, 2 and 3 at Paradip Port
The Cabinet Committee on Economic Affairs (CCEA), approved the project of
Mechanisation of East Quay (EQ) Berths-1, 2 and 3 at Paradip Port on Build,
Operate and Transfer (BOT) basis, under Public Private Partnership (PPP) mode'
for handling thermal coal exports. The estimated cost of the project is
Rs.1437.76 crore of which Rs. 1412.76 crore will be spent by the
concessionaire. The remaining Rs.25 crore will be spent by the Paradip Port
Trust on dredging. The project envisages mechanization of EQ 1, 2 and 3
Berths to increase their capacity from the existing 7.85 million tonnes to 30
million tonnes. The project is scheduled to be completed within three years
from the date of award of concession. After completion of the project, the
total thermal coal export handling capacity at Paradip Port will reach 50
million tonnes.
4. Deepening
Draft to Handle Large Vessels
Major ports are undertaking studies to deepen the draft to 18 meters to handle
large and modern vessels.Projects for deepening have been started at Mormugao
Port and New Mangalore Port.
5. Establishment
of Dry Ports
The purpose of dry ports is to reduce congestion at ports by processing and
completing bulk of the formalities relating to cargo here so that ships can set
sail without delay at the sea ports. Dry ports are proposed to be set up at
Jalna and Wardha to service JNPT
6. Financial
Assistance to Ports for Pollution Response Equipment
The Governmenthas formulated a new central sector scheme for providing
financial assistance to all Major Ports and 26 oil handling non-major ports
under State Maritime Boards/State Governments. The scheme would help them
procure Pollution Response (PR) equipment/materials necessary for combating
Tier-I oil spills in their waters.
Under the scheme, the ports have been put into categories A, B and C based on
the risk of oil spill, in consultation with Indian Coast Guard. Financial
assistance up to 50% of the cost of the equipment/materials, necessary to
mitigate pollution due to oil spills, is provided to the ports.
7. Financial support to
Major/ Non Major Ports to promote movement of cargo/ passengers by sea/
maritime waters
A new central sector scheme has been formulated to
provide financial support by way of grant to Major Ports/ Non-Major Ports for
construction/ up-gradation of exclusive coastal berths for coastal cargo,
berths/jetties for passenger ferries and construction of platforms/ jetties for
hovercrafts/ seaplanes in port waters.
8. Dredging at Major Port -
Guidelines
Comprehensive guidelines on dredging at Major Port have been finalised and
issued for implementation in October, 2015.
E. INLAND
WATERWAYS SECTOR
1. Bill
To Declare 106 Additional Inland Waterways As National Waterways
Lok Sabha has passed the National Waterways Bill, 2015, for declaration of 106
inland waterways as National Waterways. After the inclusion of 106 additional
inland waterways to the existing five national waterways, the total number of
national waterways will go upto 111. The aim is to create cost-effective
and eco friendly waterways to ease the burden on roads and railways.
2. MoU
Signed For Logistic Hubs With Rail Connectivity
A Memorandum of Understanding (MoU) has been signed between the Inland
Waterways Authority of India (IWAI) and the Dedicated Freight Corridor
Corporation of India (DFCCIL) for creation of logistic hubs with rail
connectivity at Varanasi and other places on National Waterways. This is
expected to lead to convergence of inland waterways with rail and road
connectivity and provide a seamless, efficient and cost effective cargo
transportation solution
F. INTERNATIONAL
CONVENTIONS
i. India
accedes to the Anti-Fouling Systems (AFS) Convention 2001 of International
Maritime Organization (IMO)
The Indian instrument of accession was deposited with the IMO on 24.4.2015 and
the convention entered into force in India on 24.7.2015
ii. India
ratifies Maritime Labour Convention (MLC) 2006 of International Labour
Organization (ILO)
This Convention is considered as the 'Bill of Rights' for the seafarers across
the world. India has the second largest number of seafarers after
the Philippines and by ratifying the MLC, has ensured improvement in the
working and living conditions, and employment rights of Indian national
seafarers. The Indian Instrument of Ratification was deposited with ILO on
09.10.2015 and the Convention will enter into force in India on 09.10.2016.
iii. The
Merchant Shipping (Amendment) Bill 2015 to incorporate the provisions of the
three IMO Conventions, namely, Bunker Convention, Nairobi Convention and
Salvage Convention introduced in Parliament.
1. Development
of Chahbahar Port in Iran
India signed an MoU with Iran for developing Chahbahar Port. An SPV, Indian
Ports Global Ltd has been formed with equity participation from Jawaharlal
Nehru Port and Kandla Port to execute the project.
2. Vision
for coastal shipping, tourism and regional development
Ministry
of Shipping has prepared a vision for coastal shipping, tourism and regional
development to increase the share of coastal/IWT mode from 7% to 10% by
2019-20. An action plan to achieve the objective has also been prepared
and is being implemented. The key elements of the initiative include
development of coastal shipping as an end-to-end supply chain, integration of
IWT and coastal route, development of regional centers to generate cargo for
coastal traffic, development of domestic cruise industry and promotion of
lighthouse tourism.
3. MoU
with Republic of Korea on Maritime Transport
An MoU was signed with Republic of Korea to promote bilateral cooperationin
maritime transport.
4. Coastal
Shipping Agreement with Bangladesh
India signed an agreement on coastal shipping with Bangladesh. This
agreement would allow River Sea Vessels (RSV) to carry cargo between the two
neighbours. In terms of berthing charges and light dues, both the countries
would extend national treatment to one another. The commencement of coastal
shipping between the two countries would give a boost to Exim trade between
India and Bangladesh. The two countries also signed the Standard
Operating Procedure (SOP) to operationalize the “Agreement on Coastal Shipping.
5. India
and Bangladesh Initial a Draft MoU on Passenger and Cruise Services on Coastal
and Protocol Route
6. India
and Bangladesh Agree on Extension of Protocol on Inland Water Transit and Trade
India and Bangladesh have agreed on the extension of Protocol on Inland Water
Transit and Trade (PIWTT) with the provision of automatic renewal in line with
the proposed amendment to the Bangladesh-India trade agreement during a
Secretary-level talk between the two countries.
7. MoU
between India and Spain on cooperation in Port matters
The Union Cabinet has given its approval for signing a Memorandum of
Understanding (MoU) between India and Spain on cooperation in Port matters.
8. Agreement
between India and Jordan on maritime transport
The Union Cabinet has approved signing of a shipping agreement between India
and Jordan. Recognizing the significant mutual benefit that can be derived
from cooperation in the area of shipping between the two countries, it has been
decided to sign the agreement with a view to strengthening cooperation and to
provide sustained mutual assistance and advice on merchant shipping and other related
maritime matters.
9. Agreement
between India and Egypt on Maritime Transport
The Union Cabinet has given its approval for signing of an agreement between
India and Egypt on Maritime Transport. Recognizing the significant mutual
benefit that can be derived from-cooperation in the area of shipping between
the two countries, it has been decided to sign the Agreement with a view to
strengthening cooperation and to render sustained mutual assistance and advice
on merchant shipping and other related maritime matters
H. SECURITY
1. Ratification
of International Labour Organisation Convention No. 185 on the Seafarers
Identity Document
The Union Cabinet has approved the Ratification of the International Labour
Organisation (ILO) Convention No. 185 on the Seafarers Identity Document (SID).
A biometric based seafarer's identity document will be developed, mainly, to
ensure a foolproof security system to ward off the potential risk of breach of
security and possible terrorist attacks. India's ratification of this
Convention will benefit Indian seafarers, who may otherwise find a threat to
their job opportunities, in the near future, in the global maritime sector if
India doesn't ratify the Convention.
2. Re-Drawal
of the High Risk Area in the Indian Ocean
International bodies have agreed to India’s efforts to push back the High Risk
Area (HRA) from 78 degrees East longitude to the 65 degrees East longitude.
This will result in huge savings for India’s EXIM trade and consumers on
account of reduced insurance premium and consequently freight costs. This
will be a major gain for India on global maritime stage, resulting in a saving
of about Rs. 1500 crore per annum for merchant ships.
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