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India: Shipping Sector Eyes Major Policy Change in 2015



If Nitin Gadkari keeps his word, 2015 will see solid policy support to the shipping and port sector. Income Tax exemption to seafarers, cargo support to Indian flag-carriers, duty free-bunker to coastal shipping, incentives to shipyards and de-regulation of port tariff are among a host of promises he made from the time he took over as Shipping Minister.

Expectations are that some of these measures may be announced during the upcoming Budget session.

As 2014 draws to a close, captains of the industry are pinning hopes on policy support at home that could ease their life in the current challenging global market environment.

The prospects of a significant pick up in ocean freight seem to be dim. Countries like Russia, Japan and China are facing economic slowdown. Rates for hauling dry bulk cargo such as iron ore, coal and grains have been under tremendous pressure for the past couple of months. The Baltic Index, the barometer of commodity freight, plunged to 782 points on December 24, from over 1,100 points in September. An immediate recovery seems unlikely in the coming days. Tanker rates have improved, but analysts are not sure whether the uptrend will sustain for long, though they expect supply pressure to ease with lesser number of new deliveries in the next year.

Crude price
Fall in crude price may be another positive factor. The bunker cost, which accounts for about 40 per cent of shipping lines’ operating expenses, fell sharply in recent months. However, a major worry for ship-owners is compliance with the new sulphur emission norms, coming into force from January 1. As per this regulation, all ocean-going vessels passing within the Emission Control Areas (including the English Channel, Baltic Sea, North Sea, North American and US Caribbean Sea areas) must use fuel oil with less than 0.1 per cent sulphur. Ship owners will have to incur additional cost. Either they have to mix fuel oil with gas oil or refit their vessels with new equipments to comply with the regulation.

Ships operating in the Far East and Middle East routes will not be affected by the new regulation. However, they will have to gradually prepare for adhering to ‘green shipping’ norms which will become applicable in the future globally.

Some of the reforms the Minister promised to introduce are crucial for domestic shipping lines to become globally competitive. It is a pity that Indian ships currently carry less than 10 per cent of the country’s own international cargo.

Mounting difficulties
Last year the country imported about 185 million tonnes of crude, but only 13 per of which was carried by Indian ships. The shipping ministry should take up the proposed hydrocarbon transportation policy with the Petroleum Ministry. Indian shipping tonnage has been stagnating around one million grt. Though ship prices have become attractive, Indian owners find it difficult to raise funds to buy them.

One of the first things the Minister wanted to do was to encourage coastal shipping and inland water transport. Though he took the initiative, nothing much was done to divert more cargo to this economical and eco-friendly mode of transport.

The Shipping Ministry spent a lot of time and energy to remove the discrepancy in the tariff regulations that has been stifling efficiency and growth in government ports, but it is yet to succeed. And TAMP, the tariff regulator, continues to follow the same old guidelines to fix the rates.
Source: Hindu Business Line

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners



…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live



The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured



…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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