Monday, 28 July, 2008

Maersk still holds a strategic position

Maersk does not see any reason to get perturbed as a result of the set back to the Jawaharlal Nehru Port’s dredging plans. In fact, the company will not suffer any immediate losses if no dredging of the approach channel takes place even for a few more months.

Speaking to Shipping Today, Mr. Dinesh Lal, Executive Director, Mærsk India Private Ltd. expressed confidence that dredging would take place sooner or later. “It is very unfortunate that dredging has not yet taken place,” he mentioned. “I think some steps will have to be taken to expedite this matter. Dredging has to be done. It will only help to increase the volume and bring in an economy of scales which will benefit the trade.”

Maersk has been looking at holding a strategic advantage at JNPT by bringing in their large mother vessels and exploiting GTI to the maximum. The present 12-metre draft at JNPT however has proved to be a deterrent with the result they have had to contend with their smaller ships calling at the port or partially loaded vessels docking in.

The dredging of the approach channel of JNPT is much over due. The port’s Rs 800-crore project for dredging and widening of the main harbour channel, which has been a non-starter for over five years, received a setback recently as the port decided to scrap the on-going tendering process and to go in for fresh tenders, as the latest bid by a foreign dredging house exceeded the port’s estimated outlay for the project.

The Gateway Terminals India Private Ltd.(GTI) at JNPT is a joint venture of A.P. Møller - Mærsk A/S and Container Corporation of India Ltd (CONCOR). GTI has signed a license agreement with Jawaharlal Nehru Port Trust (JNPT) to build and operate for the next 30 years a state-of-the-art common user container terminal at Nhava Sheva. The terminal has a through put capacity of 1.3 million TEU which it is already performing. Employing modern equipment it has positioned at GTI 8 post panamax twin pick cranes with an 18 wide outreach, 29 energy efficient RTG's, 3 Rail Mounted Gantry Cranes, empty handlers and a fleet of tractor-trailers all of which are designed to provide a strategic advantage. The container terminal employs state of the art information technology systems to increase productivity

When asked for his opinion about speculation that the dredging would get further delayed by two years he replied: “That is not true. There is no such embargo on undertaking dredging at an earlier date. The process can be expedited and will be accelerated. Instead of the lead time being so much more it can be shortened. They can call for re-tendering within two months and awarding within one month. In three to four months tenders can be awarded. It is possible to expedite the dredging, which has to be done and there is no alternative to it.”

Mærsk India has a joint venture with CONCOR for the ICD at Dadri and CONCOR in turn has formed joint ventures with many shipping lines in the Dadri ICD. Mærsk at the moment has two CFSs in Nhava Sheva and one in Dadri. The company is also open for any venture which is in line with their business activity.

“GTI will go in for expansion and bring in more equipment to handle higher traffic,” confirmed Mr. Lal. “They have extra land and if any portion is to be reclaimed they will do it. They are capable of undertaking expansion and GTI will do much more than the guaranteed volume.”

When asked about the possibility of diverting ships to Pipavav port he refuted it saying, “There are no plans for diverting ships to Pipavav port which is also promoted by Maersk’s APM Terminals. Why would any one take such a drastic step now?” he asks. “There is a draft at the moment. There are 4 million TEU containers moving through JN port. Had the dredging been done, the container traffic would have been much higher. Yes other ports will also grow. But I am certain no one will move out of Nhava Sheva and not even 2% of the margin will go down at Nhava Sheva. Yes what could happen is the increase will not come. But then they don’t have the capacity to handle any increase.”

Shipping lines have been offering better freight rates for JNP. But this scenario is likely to change over the period of next few years said an official of the company. “We must look at the bigger picture as the trade gets bigger then what has freight got to do with it?” he asked. “The trade has to be handled somewhere. Today, when the trade is small these lines on their way to the Middle East are coming to JN Port only to drop the Indian cargo. But when the trade volumes begin to mount these containers will not come to JN Port but go directly to the East coast.”

He further clarified that presently the freight rate is there because the trade is moving to the Middle East and stopping by at JNP. But when the trade increases in the East the cargo will come directly to that area. The concept in the next 10 to 15 years will change and the East coast will become equally important with trade with China and the Far East growing.


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