That L&T will divest its stake in Dhamra Port Company Ltd, a 50:50 JV between Tata Steel and L&T, is no longer news. What generates speculation is who could be the probable buyer of the stake. Several names float from time to time, including that of Tata Steel, which being the 50 per cent owner of the company may have the first right of refusal and, therefore, could buy up the entire stake, more so because Tata Steel’s involvement and, thus, investments in Odisha are set to rise in coming days.
The latest addition is the name of APM Terminals, belonging to the Denmark-based A P Moller Group, which also owns the world’s largest container line, Maersk. However, those familiar with the goings-on in the country’s port sector discount any such a possibility. Yes, APMT is interested in Dhamra Port but only in setting up a container terminal not running the whole port. Early this year, DPCL and APM did sign a Memorandum of Understanding (MoU) to explore the possibility of setting up a container terminal with an initial capacity of 500,000 TEUs annually, to be scaled up gradually to one million TEUs. The exercise is still on. After all, APMT is known all over the world as a container terminal operator, not as a port operator. At country’s two other ports, JNPT and Mundra, it is container terminal operator.
In 2011 calendar year, 1,42,485 persons died and 5,11,394 were injured in road accidents across the country. The corresponding figures for 2010 were 1,34,513 and 5,27,512 respectively. The Ministry of Road Transport and Highways, with the help of state police, has identified what is called 25 “black spots”, each in 13 states, totalling 325, which account for 90 per cent of the accidents in the country. The states are Haryana, Uttar Pradesh, Chhattisgarh, Bihar, Gujarat, Maharashtra, Kerala, Karnataka, Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Rajasthan and West Bengal.
Out of these 325 black spots, 233 are on National Highways under National Highways Authority of India (NHAI), another 74 under National Highways maintained by State Governments, 18 on State Highways under the State Governments, 13 are on stretches proposed for improvement on build-operate-transfer basis and the balance 61 locations to be developed into National Highways out of 10 per cent of Plan provisions in 2012-13, subject to preparation of detailed project report, land acquisition, inter se priority and fund availability. Karnataka has the unique distinction of having 15 out of a total 18 black spots on State Highways, with the remaining three going to Uttar Pradesh.
In 12thFive Year Plan, emphasis is to be laid on implementation on National Road Safety Policy with accent on 6Es such as education, enforcement, engineering (roads), engineering (vehicles), emergency care and enactment, in addition to creation of road safety database and establishment of call centres with toll free number operated on 24x7 basis.
Liners shelve plans to hike rates
The pressure on box rates is continuing, suggesting that the liners’ plan to raise rates might have to be shelved. The Trans Pacific carriers have already postponed their planned General Rate Increase (GRI) due to take effect from December 1. Shanghai Containerised Freight Index shows that the Asia-Europe box rate lost $29, Asia/Mediterranean rate $24, Asia /US West Coast rate $27 and the Asia/US East Coast $28 per TEU (twenty-foot eqyuvalent unit). Drewry’s World Container Index shows that Shanghai/Rotterdam rate lost $144 per TEU, Shanghai/Los Angeles $49 per TEU, Shanghai-New York $77 per TEU and Shanghai-Genoa $105 per TEU.
The tonnage overhang remains and the situation is likely to persist until capacity tightening takes place. According to some experts, the oversupply might be difficult to manage in coming days. Some lines have already announced blanked sailings post Christmas. A section in the shipping industry feels that blanked sailings and the pre-Chinese New Year rush together are likely to create a much better condition for general freight increase but others are not so optimist. Rate increase, if any, will be short-lived as additional volumes are unlikely to be generated given the present market condition. In fact, the carriers are in a Catch 22 situation. They need rate increases to restore rates to profitable levels but the market realities are different.