Ports & Ships Maritime News

Nov 8, 2007
Author: P&S

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  • Rift Valley Railway speeds up Mombasa trains

  • Safmarine confirms the departure of the Big Whites

  • Suez Canal Container Terminal partners with COSCO Pacific

  • Maersk Line introduces software system to reduce CO2 emissions

  • South Africa lifts steel import tariffs

  • Pic of the day – HOPE STAR

    Rift Valley Railway speeds up Mombasa trains

    Roy Puffet, managing director of Rift Valley Railway (RVR) says the transit time for goods railed between the port of Mombasa and Kampala in Uganda has been slashed to an average of seven days since RVR took over the operation of the Kenya and Uganda railway network one year ago.

    This is contrary to our report of yesterday ‘New rail rates raise ire of Ugandan importers’
    http://ports.co.za/news/article_2007_11_6_5838.html#five in which Ugandan shippers who were objecting to a 10 percent increase in rail tariffs claimed there had been no improvement in service levels since the takeover.

    Puffet said that slashing the transit time from 21 days to an average of 7 was one of notable achievements of the railway so far. He said that the railway that RVR inherited had been in an appalling state of disrepair which had greatly hampered efforts at improving service levels over the past 12 months.

    Nevertheless RVR had achieved considerable successes, said Puffet. He said this included reducing the rate of rail accidents which had been alarmingly high before the concession period. Revenues had also improved which meant that considerable sums had been made possible to government in taxes and fees.

    The rolling stock fleet was undergoing a programme of rehabilitation, which was one of the concession conditions, while dilapidated sections of the rail network were also being rehabilitated to allow trains to operate in safety. In addition new locomotives and wagons were on order.

    He said that of the 174 Kenyan locomotives inherited by RVR only 55 were operational and of 44 in Uganda only 25 were in service. The Kenya network comprises 2,350km of track and Uganda 431km.

    "We have undertaken to put in more than four times the required investment outlay as part of our accelerated strategy to put the Kenya-Uganda railway back on top," Puffet said.

    The concession agreement requires RVR to invest US$5 million in Kenya and $1 million in Uganda for the first five years ending 2011.

    Safmarine confirms the departure of the Big Whites

    Safmarine has confirmed by way of a press release the story carried by PORTS & SHIPS last week marking the handover of the first Big White, SA HELDERBERG in Singapore on 31 October. (see our report in the News Bulletin dated 1 November ‘Safmarine bids farewell to SA Helderberg’)

    In the statement Safmarine said the remaining three Big Whites, SA Winterberg, SA Sederberg and SA Waterberg (presently Maersk Constantia) will be phased out between January and August 2008. The four containerships - which have been on bare-boat charter to Safmarine since 2002 - are to return to their owners at the end of their charter period.

    “Safmarine is sad to bid farewell to these reliable ships which have served South Africa, Safmarine and our valued customers well for three decades,” said Safmarine CEO Ivan Heesom-Green. “It is also worth noting these four ships, along with sister ships from other lines, were deployed on the South Africa-Europe trade for 25 years and that it is unusual to have ships deployed together for this length of time on a single trade lane.”

    Respect for these much-loved vessels has resulted in the SA Helderberg and her sister ships being viewed as more than mere transporters of sea freight.

    “In many ways, these ships have been synonymous with the spirit of Safmarine and we are therefore sad to see them go. However, it is important that Safmarine, in the interests of providing a leading shipping service - and owning and maintaining a modern fleet - invests in new, more technologically-advanced and environmentally-friendly ships.”

    Heesom-Green said that Safmarine is currently part-way through an extensive fleet renewal programme and will take delivery of seven new, owned vessels in 2008.

    Suez Canal Container Terminal partners with COSCO Pacific

    COSCO Pacific has acquired a 20 percent partnership in the expanding Suez Canal Container Terminal (SCCT) in Port Said, Egypt, AP Moller Terminals announced yesterday.

    The 20 percent share in SCCT was acquired from the IFU Danish Development Bank which is now no longer a shareholder. AP Moller Terminals remains the major shareholder and operator with a 55 percent stake in the terminal. Other shareholders are Suez Canal Authority 10 percent, National Bank of Egypt 5 percent and Egyptian Private Sector 10 percent.

    “Our port has successfully attracted an important new partner in the Chinese terminal operator, COSCO Pacific, and added new liner services through COSCO shipping lines. COSCO will become the third liner customer of SCCT in 2008, joining our clients CMA CGM and Maersk Line,” said SCCT Managing Director, Jens Floe.

    "The addition of COSCO’s liner services into the Egyptian Mediterranean port market is an important step in generating new business for Egypt. The new agreement will increase SCCT’s container handling volumes and open the door to new Chinese business in the region, strengthening SCCT as the largest terminal operator in Egypt and market leader in the East,” he added.

    Floe said that SCCT was investing in the future of Egypt and was in the process of starting Phase II, which will increase terminal capacity from 2.55 million TEUs to 5.1 million TEUs and raising the total investment to US$730 million.

    “Equally important, our terminal will inject new jobs into the Egyptian economy by doubling the number of jobs and training and developing the skills of local Port Said employees.”

    The terminal anticipates handling 1.75m TEU this financial year, which will rise to 5.1 million by 2011.

    SCCT serves as an important link between the Far East and Europe trade. The terminal currently has 1200m of quay wall equipped with 12 post panamax ship-to-shore cranes. After the completion of Phase II (1200m quay wall extension) the total quay wall length will be 2,400 metres equipped with 24 post panamax STS cranes, increased terminal productivity through modern technology and 1,500 additional refrigerated plugs for a total of 3,000 plugs to serve the specialised needs of the refrigerated trade.

    Maersk Line introduces software system to reduce CO2 emissions

    Maersk Line has announced the implementation of a new software system called QUEST (Quality and Energy efficiency in Storage and Transport) that provides a new temperature control regime which it says enables a significant reduction in the energy consumption and CO2 emissions of refrigerated containers (reefers).

    By using QUEST energy consumption used for cooling can be cut by up to 50 percent without impacting on the quality of refrigeration solutions and Maersk estimates this will lead to CO2 emission reductions of 325,000 tonnes annually by the time it has been fully implemented during 2008.

    "While the most energy efficient and environmentally friendly mode of transportation is by sea, our aim is for continual improvement in our environmental performance. We are therefore particularly pleased to be able to start using QUEST. It marks a new milestone in our continuous effort to develop and implement ever cleaner and more fuel-efficient solutions", says Thomas Eskesen, Senior Director and responsible for Reefer Management in Maersk Line.

    Maersk traditionally maintains a constant supply air temperature in the reefer container, which is a process using high amounts of energy, whereas QUEST on the other hand focuses on the temperature of the transported commodity.

    "With Quest our customers and their commodities will benefit from all the usual features provided by our refrigeration solutions and in the same time we all benefit from lower energy consumption and reduced emissions", Eskesen says.

    "QUEST is a good example of thinking outside the box. The solution is innovative and successfully challenges conventional wisdom. We are very pleased to have been part of the project and with the opportunity to apply scientific research into our business. We are confident that QUEST will reshape an important part of the container industry, benefiting both customers and the environment", he says.

    The solution is the result of a joint development project sponsored by the Dutch Government, and involving amongst others Wageningen University and Research Centre in the Netherlands, and Maersk Line.

    South Africa lifts steel import tariffs

    Pretoria – 7 November 2007 (BuaNews) - Tariffs on imported steel have been removed in a bid by government to make steel cheaper for users, writes Shaun Benton.

    This comes as a debate ensues among economic strategists - in South Africa's domestic economy and in the context of the World Trade Organisation's negotiations - as to the merits or otherwise of comprehensive tariff reform.

    Speaking on Tuesday, Trade and Industry Minister Mandisi Mpahlwa said apart from allowing firms which use steel in their products to become more competitive, the abolition of the tariffs on imported carbon- and stainless steel will also promote competition among upstream steel industries.

    The move to abolish tariffs on steel imports comes after widespread complaints of high prices for South African-sourced steel, and concerns that downstream industries would continue to suffer, as the high costs of steel in turn render their products less competitive.

    Announcing the move at a briefing on progress made by government's economic cluster, Mr Mpahlwa said that a review of "intermediate" tariffs in the paper and pulp, the chemicals and the aluminium sectors has also begun.

    But the Trade and Industry minister said he was not considering a blanket removal of all tariffs, amid a contemporary debate as to whether the removal of tariffs can make local firms more competitive by subjecting them to the pressure of cheaper imports.

    The issue of tariff removals also involves trade negotiations in the World Trade Organisation, with Deputy Minister of Trade and Industry Rob Davies last week saying in parliament that countries like South Africa needed to see if tariff policy could be debated without necessarily locating the debate entirely within the context of WTO negotiations, which have in any case served to add far greater salience to individual countries' approaches to the issue.

    And delivering the Medium Term Budget Policy Statement last week, Finance Minister Trevor Manuel called for the "simplification and reform" of tariffs. "Our approach," said Manuel, "needs to ensure that competition is fostered through tariff simplification and reform."

    In the 2007 Medium Term Budget Policy Statement released on 30 October, the National Treasury asserted that economic research had stressed the long-term importance of developing a diversified, export-oriented manufacturing base.

    "This," says Treasury, "requires competitive input costs, markets that are open to foreign competition to create innovation incentives, and addressing market failures where they occur."

    Leaning towards the tariff abolition argument, Treasury argues that incentives that result "in higher levels of productivity, innovation and reduced unit costs will be favoured, with the aim of encouraging businesses to boost exports in highly competitive global markets."

    "Some net economic gains could be achieved through further tariff reduction and simplification that promotes innovation in production and market strategy," says Treasury.

    It also pointed out that while tariffs had remained high enough in the clothing and textiles sector to maintain producer profitability, little new investment has been seen in this sector and employment levels here have not increased.

    Speaking to reporters on Tuesday, Mpahlwa said it was part of national industrial policy to review tariffs in certain sectors, especially where these would reduce the input costs of budding downstream industries.

    However, he insisted that a blanket ban on tariffs that would reduce tariffs to zero across the board was not being considered, describing tariffs as "an important instrument" of industrial policy.

    "The argument that South Africa must reduce tariffs to boost productivity must be taken with a degree of caution," Mpahlwa said, adding that "there is no ideal tariff structure".

    He said the Department of Trade and Industry and the National Treasury each had "a perspective" on the question of tariffs reform or otherwise.

    Much of Tuesday's briefing on the programme of action of the economic cluster centred around the sometimes theoretical question of tariffs, with Mpahlwa arguing that "no credible study" could ascribe the presence of what few tariffs remain as "the sole reason for South Africa's competitiveness or lack thereof".

    "That would be a failure to understand the realities of manufacturing in South Africa," he added.

    The reasons for manufacturing in South Africa not having reached its full potential include "the major issues" of infrastructure and logistics, where major upgrades are currently under way.

    Other key impediments are located within "internally generated factors" such as monopoly pricing for industrial inputs - as has been largely the case with steel - as well as the competition environment.

    Another key element is the "competition environment", where competition has not always been optimal in an environment where certain players dominate their markets.

    Government is currently addressing this as well through introducing amendments to the legislation on competition.

    "In the South African context, competitiveness is about all of these things" and not simply so-called tariff barriers, the trade minister said.

    Rolling off a number of figures, Mpahlwa said that "your average tariff has actually come down to about 8.2 percent, from about 23 percent, and that about 54 percent of those tariffs are at zero currently".

    Pointing also to the "phase down" of tariffs as part of a trade agreement between South Africa and the European Union agreement, 86 percent of imports from the EU would be at zero tariff levels by 2012.

    "We are on a gradual phase down already," he said, adding that 94 percent of South Africa's exports to the EU would have zero tariffs by then.

    The director-general of the dti, Tshediso Matona, later indicated that the opening up of South Africa's economy to the European Union through gradual tariff reduction has had the long-term effect of strengthening the competitiveness of South Africa's economy in the face of pressure from other parts of the world, such as Asia.

    At the same time, said Mpahlwa, the dti's industrial policy works to ensure that the competitiveness of South African firms in the various economic sectors is enhanced by addressing fundamental issues such as industrial upgrading, rather than focusing purely on factors such as tariffs, or a fluctuating exchange rate.

    Mr Matona indicated that the skills base is another key, fundamental area where major improvements need to be made.

    The skills shortage was also taken up by the Finance Minister in his Medium Term Budget Policy speech last week, when he said last week that "the area of skills development is clearly one in which we will make more progress if we address the institutional and financial barriers that stand in the way of aligning resources with needs".

    But when it comes to the removal or inclusion of tariffs, the department is taking "a more calibrated approach" that is informed by "the sectoral realities" of the economy, Mpahlwa said.

    And on the broader issue of industrial policy, the Treasury also advocates a balanced approach. Says Treasury in the Medium Term Budget Policy Statement: "Getting the balance of objectives right in industrial support programmes, and amending them when needed to increase efficiency and address flaws, is an important focus of current policy reviews."

    It is such a balance that the trade minister was advocating on Tuesday.
    "Our own stance is not a stance of protectionism - it is simply a more nuanced approach ... that sees a role for addressing the matters of tariffs in relation to the different sectors, and you will not have a blanket approach that applies equally to all sectors," Mpahlwa said.

    Pic of the day – HOPE STAR

    Click on image to enlarge – with some browsers click twice

    The 18,302-gt Chinese bulker HOPE STAR enters Durban Harbour on 17 October 2007 bound for Maydon Wharf 3 to begin discharging a cargo of steel.
    Picture Steve McCurrach http://www.airserv.co.za/maritime.htm

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