ecmbs 2015 newsletter2
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PRE-CONFERENCE NEWSLETTER ON EAST COAST MARITIME BUSINESS SUMMIT 2015 JANUARY 2015
ECMBS BULLETINECMBS NEwSLETTEr
BROUGHT TO YOU BY
22-23 January, 2015
NovotelVarun Beach, Visakhapatnam
The Visakhapatnam Port Trust (VPT) is preparinga report on developing the AP coastline as aCoastal Economic Region (CER) under the ambitiousSagar Mala project of the Centre. The report will besubmitted to the shipping ministry.
As part of the report, VPT is coordinating with other
non-major ports in the state, including Gangavaramand Kakinada, and the state government to compiledata on existing industries and proposed investmentsin the state. The development assumes signicance asthe Centre is expected to select one CER each on the
west and east coast as pilot projects for implementingthe project. The report will also identify bottlenecks inthe existing rail and road networks.
While the shipping ministry, in its concept note,identied 10 CERs, including one spanning across the
AP coast, securing the pilot project would be a gamechanger for AP, as it will give a boost to hinterlandlinkages by improving rail and road networks fora more efcient cargo evacuation. The upcomingspecial economic zones and Vizag-Chennai IndustrialCorridor will greatly benet due to the focus onimproving the existing infrastructure.
AP will be vying for becoming the pilot CER alongwith Odisha (which has Gopalpur, Paradip andDhamra ports), West Bengal (having Haldia and
China has opened the GyirongPort on the Rasuwagadhi borderin Nepal, the second land routefor promoting bilateral trade.Earlier, the Tatopani borderserved as the sole trade routebetween China and Nepal. It
will also help promote tradebetween China and South Asiancountries.
Visakhapatnam is attractingbig ticket investments starting
from the proposed petroleum,chemicals and petrochemicalsinvestment region (PCPIR),
Vizag-Chennai IndustrialCorridor, IT InvestmentRegion (ITIR) and the latestEntertainment City proposed byEros Investment Ltd.
Jindal Steel and Power Ltd(JSPL) has commissioned thecountrys largest billet casterplant at Angul in Odisha. Ithas a 2.5 MTPA steel makingcapacity at Angul which thecompany plans to raise to sixMTPA.
Andhra Pradesh guns for coastaleconomic region under Sagar Mala
VPT, VCTPL ink pact for terminal extension
The Visakhapatnam Port Trust(VPT) has signed a concessionagreement with VisakhapatnamContainer Terminal Private Limited(VCTPL) for extension of theexisting container terminal at VPTon design, build, nance, operate
and transfer (DBFOT) basis.
Kolkata ports) and Tamil Nadu (with ports at Ennore,Chennai, Karaikal, Cuddalore, Tuticorin) on the east
coast. Sources said the advantage of becoming a CERunder Sagar Mala not only improves infrastructurefor ports, but also opens up opportunities incoastal tourism including cruise, cultural, sports andrecreation.
Brief News
w w w . e c m b s . i n
Our dream is that port-led development should become a logistic huband gateway of India for other south eastern countries. Visakhapatnamand Krishnapatnam will play an important role in achieving our goal
Sri N Chandrababu Naidu,Chief Minister, Andhra Pradesh
KANDLARA
HAZIRA
PAVAV
DAHEJ
DMIC
AKIC
PROPOSED ROUTE
PROPOSED ROUTE
MUMBAI
JHPT
DIGHI
JAIGADH
MARMUGAO
KARWAR
NEW MANGALORE
BEYPORE
COCHIN
WESTCOASTCANAL
AURI &CANAL
NW-3
NW-4
NW-1
NW-5
NW-2
TUTICORIN
KARAIKAL
CADDALURE
CHENNAI
BUCKINGHAM CANAL
ENNORE
KRISHNAPATNAM
KADINADACANAL
VISHAKAPATNAM
GOPALPUR
PARADIP
PCPIR
HALDIA
DHAMRA
KOLKATA
DANKUNI
EAST COAST CANAL
GANGAR
ELURU
CANAL
CVIC
CAMMAMURUCANAL
CBICBANGALORE
BMIC
CHAMPAKKARACANAL
MAJOR CITIES
MAJOR PORTS
NON-MAJOR PORTS
INDUSTRIAL CORRIDORS
FREIGHT CORRIDORS
PROPOSED COASTAL MEGAWAY
PCPIR
MAJOR INLAND WATERWAYS
MARITIME ECONOMIC REGION
LEGEND
The cost of the project is `633.11crore for concession period of30 years and its capacity is 0.54million TEUs.
It is expected to be completed intwo years, after which the VCTPL
will be able to handle 1 million
TEUs, which is equal to around
12 million tonnes of cargo perannum.
The Shipping secretary hasannounced to develop the Vizagport into a container hub onthe East Coast, on the lines ofSingapore Port.
Maritime Gateway wishes
its Supporters, Sponsors,
Speakers and Delegates
a Happy and Prosperous
New Year
2015
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The new India-Myanmarshipping container servicewill need time to get off theground, according to the secretary
of Myanmar Pulses, Beansand Sesame Seeds MerchantsAssociation. The Economic Timesis said to have reported that theservice had run into a roughpatch just two months after it
was launched, as initial containershipments posted a loss, raisingquestions over the sustainability ofthe service.
India-Myanmar container service yet to become sustainable
Container ships from India arereported to be 90 per cent full, butthe return journeys with producefrom Myanmar have been limited.
At this rate, the service will useup all of its contingency fundsin the next ve months if cargo
volumes do not pick up. However,the government did not expect theservice part of the commercialoutreach of Indias Look EastPolicy to make a prot in therst year.
Within just six months atthe helm, Indian PrimeMinister Narendra Modi injectedover $3 billion of investmentsinto Nepal which may change itseconomic landscape. The latestIndian initiatives are the 900 MWeach Upper Karnali hydropowerproject in west Nepal and the
Arun III power project. India hasalso offered soft loan of $1billionfor various infrastructure projects.
The Investment Board of Nepal
India invests $3 billion in Nepaland Satluj Jal Vidyut Nigamof India have signed projectdevelopment agreement for the
Arun III project.
With the signing of the powertrade agreement with Indiaand two project developmentagreements with GMR and Satluj
Jal Vidyut Nigam, many foreigninvestors are keen to invest inNepals hydropower sector, theobvious market of which is India,said Nepal government.
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ECMBS NEWSLETTER |JANUARY 2015
East coast of India presents an untapped potential which can provide a boost to our country s economicobjectives. This region can immensely help India in realizing its potential as a preferred internationaltrade hub. This opportunity needs to be leverage together by the state government, center as well asprivate enterprises. Gateways ECMBS event will provide all stakeholders the right platform to cometogether to discuss and bring this opportunity in the forefront.
Adarsh Hegde ,Executive Director, Allcargo Logistics Ltd.
The board of directors are beingnalised for formation ofLNG Power Company BangladeshLimited for importing LNG tomeet the gradual growth in demandand avoid a sudden gas crisis. Theexisting gas reserve is depleting,causing severe gas crisis in thecountry, especially in the gas-redpower plants, said MohammadHossain, director general of PowerCell, a state-owned entity underthe Ministry of Power, Energy andMineral Resources.
The government is going to set
LNG Power Company BangladeshLimited being formed
up the countrys rst-ever 3.5million tonnes a year land-basedLNG terminal in Chittagongs
Anwara or Moheshkhali inCoxs Bazar. The company tobe formed will also administeroperations at the terminal. Fiverms have been shortlisted for theproject: Huanqiu Contracting andEngineering Corporation of China,Royal Dutch Shell Plc of theNetherlands, Tractebel Engineeringand TSK Construction of Belgium,Mitsui and Company Ltd in Japanand Petronet LNG Ltd of India.
Tripura Chief Minister ManikSarkar has urged the primeminister to pursue Bangladeshfor better access to its waterand land routes for transportingmaterial to the northeartern states.
Access to Chittagong internationalport and Ashuganj river port inBangladesh is crucial for ferryingmen and material from the other
Better access to Bangladesh land andriver routes needed
parts of India and abroad to thenortheastern states, said Sarkar.
A multi-modal transportationsystem using Bangladeshi portsis the need of the hour for thenortheastern states. If necessary,after talking with the Bangladeshgovernment, India can invest indeveloping the infrastructure ofthe two ports, he said.
The government is exploring the possibility of an alternate
route for the Sethusamudram Ship Channel Project throughPamban Pass by avoiding the Ram Sethu area. RITES has beenentrusted with the work of undertaking prefeasibility study on thatarea, said Pon Radhakrishnan, Minister of State for Shipping. Areport submitted by RITES (Rail India Technical and EconomicService) states that the major constraint in the Pamban channelis the narrow and shallow channel between the two Coral ReefIslands of Pullivasal and Krusadai. Further, the alternative routethrough the Pamban pass is subject to environmental clearance andconcurrence of Tamil Nadu government.
The Sethusamudram Ship Canal Project aims at providing ashorter navigational route for ships from East and West coasts ofthe country, instead of circumventing Sri Lanka. Once the projectis implemented, it would result in India getting a continuousnavigable route within its territorial waters.
Alternative route for Sethusamudram
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Bangladesh shall start exporting rice to SriLanka soon as the Ministry of Commercehas amended the Statutory Regulatory Order(SRO) a hurdle in the way of the countrysmove to shipment of food grain. The export will
be under government-to-government (G-to-G)arrangement. The ministry of food had asked theMinistry of Commerce to alter the SRO to faciliateexports to Sri Lanka, as a result 50,000 tons ofboiled rice shall be exported. Earlier, the twocountries had agreed that the export price of pertonne of rice would be $450 (including shipment,insurance and other costs).
Bangladesh to export rice to Sri Lanka
The Chennai port, whichhas experienced increasedgate congestion over the pastfew weeks, moved 1.05 million
TEUs in the scal year-to-date,up 5.5 percent compared to thesame period last year. Owingto pressure from user groups,the Chennai port trust had abrainstorming session with allstakeholders to identify ways toalleviate persistent congestion inthe harbor.
At the joint meeting, port-terminal representatives agreedon a string of remedial steps,including deployment ofadditional rubber-tire gantrycranes and allotment of six trucklanes at Zero Gate three each
Amega road development
programme in the North Eastnamely the Special AcceleratedRoad Development Programmein North East (SARDP-NE) hasbeen initiated.
Minister of State for RoadTransport and HighwaysPon Radhakrishnan said, thegovernment has given approval for2/4 laning of 6,418 km of variouscategories of roads under PhaseA and the Arunachal Packageof SARDP-NE in entire North-East is an estimated `33,500crore. The government has also
given approval to preparationof a detailed project report for3,723 km of roads under PhaseB. The approved length of
Kamaz, a leading Russiancommercial vehicle brandthat started its Indian operationsin 2010 with an assembly facilityin Hosur, Tamil Nadu, througha partnership with the VectraGroup, has joined hands withOmax Auto to assemble its trucks.
Cargo growth at major portsSpecial Accelerated Road DevelopmentProgramme in North East
Kamaz trucks to be exported from India
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for imports and exports, to speedup cargo ow. The measures,
are expected to ease congestionat the port as well as at the twocontainer terminals, a portofcial said.
Other smaller container hubs,such as Kolkata, Tuticorin, Cochinand Visakhapatnam, all sawhealthy growth in the eight-monthperiod, as well. Kolkatas volumeexpanded 9 percent to 418,000
TEUs; Tutocorins throughputjumped 10.5 percent to 362,000
TEUs; Cochin reported handling246,000 TEUs versus 239,000
TEUs; and Visakhapatnamsvolume increased to 179,000TEUs from 175,000 TEUs.
ECMBS NEWSLETTER |JANUARY 2015
Trans Arunachal Highways under
SARDP-NE is 1,326 km, out ofwhich, a total of 120 km has beencompleted so far and 220 km istargeted for completion by March,2015. An amount of `3000 crorehas been allocated for SARDP-NE and expenditure incurred tillOctober, 2014 is `782.38 crore.
The East-West corridor andSaraighat Bridge in Assam is facingdelays in completion due to landacquisition, change in design andslow mobilization of the resourcesby the concerned agency.
So far, works on 551 km have
been completed. The entire projectis targeted for completion by June,2015.
Sergey Kogogin, CEO, KamazRussia has announced that thecompany has already startedshipping its India-built trucks to
African countries and new exportmarkets like Bangladesh andMyanmar would join that list soon.
While Kamaz is yet to ofcially
launch its products in India, topofcial from the company saidduring FY2013, its Indian facilityhad built 152 trucks. In FY14, thecompany has built 55 units so farand is condent about reachingthe 150 unit mark by the end ofthis scal. The rm has shipped
its entire inventory overseas. Thecompany has localised 80 per centof the components in India, whichindicates that the truck maker isbetting big on India as an exporthub, and the local launch of itsproducts can be expected nextyear.
Two third of the world trade will originate and will be between Asian nations. And, Indias eastcoast will be the biggest beneficiary of this. In order to increase exports, we need to encouragemanufacturing. The Centres industry-friendly policies and focus on this segment will help east coast,which are rich in minerals.
Anil Yendluri,CEO, Krishnapatnam Port
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Indias largest rener and oilmarketing company, Indian OilCorporation (IOC), is conductingfeasibility studies to set up apetrochemical complex at Paradipin Odisha for `20,000 crore, saidDebasis Sen, director (planning& business development) at the
government-owned rm. Thepetrochemical complex wouldbe built in the vicinity of thecompanys to-be-commissioned15-million-tonne-per-annum(mtpa) greeneld renery atParadip, which is likley to be readyin FY16.
Sen further revealed that thepetrochemical complex wouldbe in addition to the alreadyannounced `3,150-crore polypropylene project at the samelocation. On November 16,minister of state (independentcharge) for petroleum and natural
gas, Dharmendra Pradhan, laid the
ECMBS NEWSLETTER |JANUARY 2015
Maersk Line (India &Sri Lanka cluster) hasannounced that its ChennaiExpress service which connectsthe Far East to the South andEast of India has added Kattupalliport in Tamil Nadu in its rotation.
The calls will be fortnightlyand will serve as an additionaloption for auto and electronicsimport customers and thediverse export businesses basedout of the South of India. Thisservice enhancement comes at atime when there is an increasedemphasis on improving regionaltrade, especially with the Far East
Asian markets.
Franck Dedenis, Managing
Director for Maersk (India and SriLanka) said, We are expecting asurge in trade through Kattupalli
Chennai Express comes to Kattupalli
Indian Oil planning `20,000-crore petrochem complex in Odisha
as it is fast becoming the preferredport by businesses in close
catchment areas. Also this additioncomes at a good time given therecent increased engagement
between the Indian governmentand the counterparts in the Far
East, under the Act East policy.
Maersk Line believes thatadvantages like reduced
foundation stone for the unit inthe port city of Paradip. We arecurrently doing feasibility studieson the molecules, which I cannotdisclose due to trade secrets.
The work on the petrochemicalcomplex would start after therenery is commissioned, the
director said.In a petrochemical complex,ethylene derivate complex isused to manufacture value-addedproducts such as mono-ethyleneglycol (MEG) and polyvinylchloride (PVC). Monoethyleneglycol has a wide range of uses,from making polyester chips,PET bottles and industrial yarn tocoolants, paints and wire enamels,among others.
The PSU rm saw revenues fromthe petrochemical business grow38% in the second quarter of
FY15 to `5,343.04 crore from
`3,874.73 crore in the samequarter last year. IOC targets toaggressively increase market sharein the petrochemical business. InFY14, it garnered `18,125.73 crorefrom the segment.
Currently, Reliance Industriesgenerates maximum revenue frompetrochemical production. In the
July-September quarter of thecurrent scal, its revenues fromthe segment were `24,932 crore.In FY14, RIL made `96,465 crorefrom the petrochemical segment.
Natural gas transporting andmarketing company GAIL(India) is another manufacturerof petrochemicals. It recordedrevenues of `1,281.41 crorefor the business in the secondquarter of FY15. In FY14,GAIL reported `4,537.2-crorerevenues from the petrochemical
segment. IOC, in its endeavour to
diversify and grow as an integratedenergy company, has made thepetrochemical business one ofthe priorities, Sen explained. Theindustrys structural oversupplyand increased exports from China
will keep Asian rening marginsunder pressure over the next 12-18
months, Moodys said in a report.According to Moodys, Asianreners will see aggregate Ebitdagrow by around 5% through 2015,
with the higher output of renedoil products more than offsettingthe impact of weak reningmargins on earnings.
China will continue to fuel demandfor rened products in Asia, albeitat a slower pace than in previousyears amid softer economic trends.
Moodys expects Chinese demandfor rened oil products to increaseby 3-5% in 2015, compared to
5-10% over 2010-12.
The shipping lines as well as the BOT operators who invested heavyamounts in creation of world-class infrastructure will be benefiteda lot if the Cabotage laws are relaxed allowing movement of cargofrom one Indian port to another.
D K Manral,CEO, Vizag General Cargo Berth
transportation time to the port aswell as the catering CFSs, quickerturnaround of trailers at theport, better road connectivity via
the national highways will helpin increasing proximity with thecustomers, reduce their lead timesand make logistics operationsmore cost-effective for customers.
This has been the companys coremotivation for investing in anadditional port call on the ChennaiExpress.
Chennai Express Rotation:Qingdao Xingang Busan
Shanghai Nansha Tanjung Pelepas Chennai Krishnapatnam* Kattupalli* Visakhapatnam Tanjung Pelepas
* fortnightly or Bi-weekly
First East bound call: 16/12 (Eastbound and west bound)
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Stating that several keyestablishments are to comeup in the Krishnapatnam areaof Nellore district, the Andhra
Pradesh government has urgedthe Centre to set up an airportin the region. The infrastructureand investment department hasalready written to the Airports
Authority of India (AAI) seekingthe establishment of an airport inthat location.
According to AP Govt. ofcials,an airport in the proximity ofKrishnapatnam has becomenecessary due to the increasingindustrialization in the area afterthe establishment of a port,several thermal power plants andautomobile units. The Sri CitySpecial Economic Zone, whichhouses several industrial unitsincluding of MNCs, is also inthe vicinity. There are severalrequests from industrialists andforeign delegates visiting theKrishnapatnam area for an airport.
We have proposed the sameto the AAI, Ajay Jain, energy,infrastructure and investmentsecretary, AP, said.
Apart from expanding theVijayawada, Rajahmundry andTirupati airports, the stategovernment wanted to set up six
more low-cost airports in the state.During the UPA government,
Kadapa, Kurnool and Nellorewere identied for setting uplow-cost airports and the TDPgovernment now wants to
include Donakonda in Prakasamdistrict, where an airport operatedabout 50 years ago, one nearKrishnapatnam in Nellore districtand a third one at Nagarjunasagarin Nalgonda district. Accordingto sources, land is being scoutedby the district administrationin the villages of Damavaram,Sunnapubatti, Dagadarthi and
Velupodu villages near Sri City inNellore district for the airport.
The AP government is in talkswith the Telangana governmentfor constructing an airport at
Nagarjunsagar in Nalgonda districtto promote Buddhist tourism inboth the states. Enthused withthe NDA government decisionto declare Amaravati as a heritagesite, the TDP government now
wants to market the famousBuddhist town at the internationallevel, for which it wants anairport close to Nagarjunsagar or
Amaravati. Amaravati had a worldrenowned Buddhist temple anda Buddhist university in the past.Now we want to connect the town
with the international Buddhistnetwork by setting up an airport,the sources said.
The states argument for low-cost
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airports is that they will acceleratethe industrial growth and improvetransport. The buildings will beenergy-efcient, with minimumsecurity hold and air-conditionedareas to keep costs under control.Infrastructure ofcials feel thatthe steel-and-glass structure forairports designed in the Westcannot be replicated in Indiaas it increases the cost of air-conditioning. The purpose is tocreate the bare minimum facilitiesfor aircraft to operate withinfeasibility conditions, without
compromising on safety andsecurity, a senior ofcial said.
The state has also proposedopening some airports to privateentrepreneurs under the Public-Private-Partnership (PPP) modelfor which the Union civil aviationministry has already given itsnod. For this, while the Centrehas put the onus of providingland, water and electricity free ofcharge to these airports on thestate governments, AP wants theCentre to grant tax concessions forthese projects. If the objective ofensuring connectivity is fullled,trafc will increase and airport
operations can be scaled up in linewith the trafc, the sources said.
ECMBS NEWSLETTER |JANUARY 2015
Essar Steel has announcedthe commissioning of anintegrated 6 million tonne ironore pellet plant near Paradip inOdisha. The factory is linked bya 253-km slurry pipeline with afacility which is located at Odishasiron ore belt and can beneciatelow-grade ore.
AP seeks airport at Krishnapatnam
Essar Steel commissions`6,000-cr pellet complex in OdishaThe company has only 405 acresin its possession of the total 2,500acres it wants for the project.We decided we will show ourcommitment by putting a foot onthe ground and investing `6,000crore till we get all the otherthings in place, Executive Vice
Chairman Firdose Vandrevalatold a press conference inBhubaneshwar. According toEssar, the current situation wheremany of Odishas iron ore minesare shut, is only a temporary hitch,but in the long term there is anopportunity for the company. We
are located where there are minesclose to us. Some are closed and
we expect them to resume shortly.And then, Odisha also has a policywhere 50% of the ore has to befed to local units; we can takeadvantage of that policy also, hesaid.
I believe the growth expected in the East Coast will be much higher compared to other. EastCoast Maritime Business Submit will offer the right platform to address the opportunities& challenges this region offers. Would like to compliment Gateway Media Pvt Limited fororganising this so well year-after-year and in bringing all stake holders together.
Pankaj GadhiaCEO, LEE & MUIRHEAD PVT LTD
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ECMBS NEWSLETTER |JANUARY 2015
22-23 January, 2015
Novotel Varun Beach,Visakhapatnam
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The new Government of Andhra Pradesh has given a fillip to the Port development activities. The ECMBS provides aplatform for all Industry Leaders and Policy Makers to chart out the course of this growth.
G Sambasiva Rao,MD, Sravan Shipping Services Pvt Ltd
The Look East spirit that drives our National commercial outlook, calls for a resurgent East Coast to connectfrom. Looking forward to Gateway Media ECMBS at Vizag.
I am proud and privileged to be associated with ECMBS wherein we can discuss and come up with way forward for thefuture maritime trade because Visakhapatnam zone and Nellore zone beacons hope for industrial growth with businessfriendly environment which exudes investors confidence by having 974 km coast line for newly upcoming ports underAP Maritime Board.
ECMBS 2015 offers a great opportunity for all stakeholders to come together to share valuable thoughts on MaritimeBusiness growth on East Coast. It also presents an opportunity to discuss constraints that are required to be addressed bydecision makers in order to support the trade and industry so as to maximize huge maritime business potential onEast Coast Ports.
Sanjay Gupta, Director,Commercial, Gangavaram Port Limited
Growth volumes have been better at Major ports along the East Coast in 2014 and we expect the volumes to pick up innon-major ports during 2015. The Capacity addition across East Coast Ports is in progress and the expansion process at
some of the major ports like V.O.C Port, Ennore, Vizag is likely to capitalize the trade benefits arising from the Act EastPolicy in the long run.
Samson Daniel,Head Logistics India, StJohn Group
Jairaj Kumar,CMD, Ocean Sparkle Limited
Capt G K Sarkari,MD, Samsara Group
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