Ports & Ships Maritime News

Apr 2, 2009
Author: Terry Hutson

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  • First View – GECO EAGLE

  • Port closures, holidays and strikes

  • Durban’s Cutler Community gets behind Cato Ridge Dryport idea

  • Calabar port dredging to resume

  • New chapter for Capespan and end of the road for Outspan

  • Shippers turn to SA as economic turbulence escalates

  • Pic of the day –SV CONCORDIA


    First View – GECO EAGLE

    The seismographic research vessel GECO EAGLE (10,946-gt, built 1999) which arrived in Cape Town harbour on 31 March 2009. Picture by Glenn Käsner

    Port closures, holidays and strikes

    Readers are reminded that Transnet Port Terminals will not be working on Election Day, 22 April, when each terminal operated by TPT will close at 06h00 on 22 April and reopen the following day at 06h00, 23 April 2009.

    The Port of Richards Bay has meanwhile advised that over the Easter Weekend 10 – 13 April inclusive, shifts will be rostered as required and that agents are requested to ensure that the CPO is well aware of vessels requiring to be worked at that time.

    On 27 April shifts will be rostered as required and on the public holiday of 1 May the port (Richards Bay) will be closed from 06h00 until 06h00 on 2 May. The port’s Dry Bulk Terminal also advises it will be closed during the same hours on 1 May 2009.

    Meanwhile SATAWU (South African Transport and Allied Workers Union) has confirmed that a national strike of road freight workers will take place on 7 April as the wage dispute remains unresolved at this stage. SATAWU says the strike will involve at least 30,000 workers nationwide.

    Durban’s Cutler Community gets behind Cato Ridge Dryport idea

    The Cutler Community Liaison Forum, which represents stakeholders within the Island View petro-chemical tank farm area at Island View within the Port of Durban, has thrown its weight behind proposals for the construction of a dryport at Cato Ridge as a solution to the proliferation of container truck traffic in the South Durban area. *

    On 27 March the Forum faxed its submission to the ministers of Public Enterprises and Transport respectively arguing that port expansion of the container handling facilities should go hand in hand with the construction of a dryport and its corollary, increased rail traffic.

    In welcoming this development eThekwini (Durban) ward councillor Duncan Du Bois, who has been promoting the idea of the dryport and attempting to get eThekwini Municipality to support it, said the support of the Community Liaison Forum added tangible momentum to the process needed to make the project a reality.

    “It is most heartening to receive this kind of endorsement. It elevates the interests of Bluff and Clairwood residents to levels where they belong by right and, hopefully, proves instrumental in goading the three tiers of government into addressing the issue decisively,” said Cllr Du Bois.

    In its submission, the Cutler Community Liaison Forum reiterated the merits of a dryport previously noted by Cllr Du Bois.

    These are: a drastic reduction of container truck traffic on roads within the Metro; an easing of traffic congestion and an improvement in road safety as a result; a drastic reduction in the extent to which roads and road infrastructure is being damaged and
    destroyed by container truck traffic; improved utilisation of the railway network as envisaged by Transnet; stimulation of job creation and poverty alleviation in the Cato Ridge area.

    * The dryport idea envisages the construction of a depot for all road transported containers at Cato Ridge from where the containers would be railed to and from the port of Durban

    Calabar port dredging to resume

    Nigeria’s Federal Government has decided to go ahead with a resumption of dredging of the Calabar port entrance channel which was abandoned after work involving two companies commenced in 2006 but was never finished.

    Transport Minister Alhaji Ibrahim Bio said during a visit to the port that however regrettable it was that the previous contract, valued at US $ 56million had had to be cancelled, it was now necessary to move ahead and award a new contract to have the work completed. He said the ongoing congestion at the Lagos ports was a source of great concern to the Federal Government and it was essential to have Calabar restored and put back to full use once again.

    “Due to some reasons, technical or otherwise, I’m not sure, the dredging was not completed. There is now a need to us to revisit the situation again and dredge the whole channel of about 86km so that the Port of Calabar can once again become vibrant.”

    The minister said that provision had been made in the 2009 budget to cover this work and the project can again commence.

    The minister said there was disagreement over government policy of trying to divert cargo away from the congested Lagos ports to the eastern ports, on account of security concerns which made the investors wary. “We think they will find the eastern ports convenient and we have already directed that ships should be diverted. We gave that order almost a month ago although the investors are apparently not willing to implement this.”

    Nevertheless the Federal Government remains convinced that the eastern ports would prove convenient to shippers. The issues of security due to militancy has been raised as had that of the shallowness of the channels and both these issues were being addressed, he said.

    “The Eastern ports of Port Harcourt, Warri, Onne and Calabr are supposed to complement the maritime activities in Nigeria,” he said.

    New chapter for Capespan and end of the road for Outspan

    Heralding the end of an era and the start of a new chapter, Capespan shareholders voted overwhelmingly in favour of Capespan’s shareholding simplification process and proposed new structure last month.

    “Simplifying the shareholding and implementing the future structure will lead to new opportunities for the organisation,” says Capespan Group managing director Neil Oosthuizen.

    “The approvals mean that all shareholders will in future have direct shareholding in the new holding company, Capespan Group Limited. Immediately after implementation the single largest shareholder with 11.5% is Total Produce plc. Meanwhile, Unifruco and Outspan will be wound up voluntarily as Capespan has taken over all their remaining assets and liabilities,” says Oosthuizen.

    Capespan Group Holdings was established in 1999 by its two parent companies, Unifruco and Outspan. Shareholders of these two companies were mainly growers of deciduous and citrus fruit respectively. Unifruco was formed in 1989 as a follow-on of the co-operative styled Deciduous Fruit Board (DFB), in existence since 1939.

    Outspan in turn was established in 1994 as the organisation replacing the South African Co-operative Citrus Exchange (SACCE), which controlled citrus exports since 1926. Therefore, Capespan understood the long history and role the two parent companies had played in developing the South African fruit industry. However, since 1999 Outspan and Unifruco were non-operating companies each holding approximately 39% of the Capespan Group shares on behalf of growers. Because of elements in the structure, this multi-tiered Capespan shareholding contained complexities.

    Towards the latter part of 2007, Capespan initiated a shareholding simplification process to increase share tradability, unlock shareholder value, further commercialise the Group and improve corporate governance. Going forward, there also will be substantial savings in administrative and other costs involved in maintaining a complex multi-tiered structure. – source Cape Business News

    Shippers turn to SA as economic turbulence escalates

    The world-wide shipping industry turmoil with losses of hundreds of millions of US Dollars and companies going into liquidation or receivership almost daily, is resulting in massive maritime claims, says Shane Dwyer, partner of Shepstone & Wylie’s International Transport, Trade and Energy Department and an expert in the shipping field.

    Many of these arise from operators trying to redeliver (hand back) ships on charter to them as they simply don't have cargo to carry, or owners who bought second hand ships or ordered new buildings, trying to walk away from the sales, even if they forgo deposits.

    “As strange as it may seem this extreme situation, and an increasing inability to make use of the popular New York Rule B attachment procedure, is helping South Africa regain its reputation as a jurisdiction in which shippers can seek assistance in obtaining security for their claims, or having obtained a judgment or arbitration award in their favour, their money back,” say Dwyer.

    From the promulgation of the Admiralty Jurisdiction Regulation Act (AJRA) in 1983 until about three years ago South Africa was a leader in this field as the Act enabled the arrest of ships, and in particular associated or sister ships, to obtain security for claims to be pursued in arbitration abroad.

    In the shipping industry most ships are owned by separate "one ship owning" companies, specifically formed so as to limit or "ring fence" liability. The AJR Act provides a way to enforce claims against, or obtain security for foreign legal proceedings from, one ship owning companies, by arresting another ship in the same "fleet."

    If one can show that there is common direct or indirect control of the shares in the different companies, in law or in fact, then one can arrest one of the other ships, owned by such a commonly controlled company which is not itself the debtor, to secure ones claim. One can then proceed against the "associated" ship in South Africa or litigate elsewhere.

    While it may be difficult to establish direct shareholding, ownership or control the law allows for a measure of hearsay evidence to be submitted, together with circumstantial factors, to satisfy the court that there is direct or even indirect, common control of the respective companies.

    This includes factors such as common signatures on financing documents and other important agreements, cross collateralization of ships under mortgages, common corporate guarantors for loans, similar or related ship names, common funnel or fleet markings, public statements about ownership or group financial results, public data-base information, common operators and a single manager.

    It is this procedure of arresting an associated ship, being more than a sister ship and akin to lifting the corporate veil of ship owning companies controlled by the same person or persons, which excited the greatest interest and South Africa quickly become a favoured forum for obtaining security, says Dwyer.

    Through the ups and downs of the shipping industry in the 1980’s and ‘90s literally hundreds of ships were arrested or threatened with arrest, for security in one or other of the country’s ports.

    Then came the innovative US’s Admiralty Rule B attachment (which only can be obtained in the state of New York) about three years ago and knocked the AJRA from its pedestal.

    Payment under most shipping contracts is in dollars and Rule B, with very little procedural requirement, enables a court order to be obtained to attach money being remitted in US Dollars through the New York banking system, to an owner or charterer and freeze it as security. Hence its rapid rise in popularity.

    Rule B, considered quick and inexpensive, has been so popular that US financial institutions were reported to spend as much as $ 14million a year in staff salaries to monitor transfers daily and check for transfers being made to or from named respondents (or their so-called alter egos) in Rule B attachment orders.

    However, contrary to what many US attorneys may say, it is becoming increasingly difficult to get a Rule B attachment order in certain courts in New York State. “Literally it depends on who the judge is and it seems that some judges are very anti the recent prevalence of Rule B applications, requiring ever more strict compliance with execution of the orders, if granted,” says Dwyer.

    Furthermore, companies are increasingly finding ways to avoid Rule B by either concluding contracts designated payment in other currencies or opening an office in New York which constitutes nothing more than a desk, chair and a VAT registration, and most often does not trade. This has recently been held to be sufficient to create a situation where the company is said to be "found" in New York, so the Rule B procedure cannot be resorted to.

    Another drawback is that in a claim, for millions of dollars, it is possible that the first transfer that is attached may be a nominal amount and Rule B then “fails” in that the ‘guilty’ company becomes aware of the claim and makes alternative arrangements for transfers in the future.

    The economic meltdown and Rule B becoming increasingly contentious (with defendants being more prepared to contest proceedings or lodge counter-claims) has seen the number of enquiries regarding ship arrests in South Africa escalate tenfold the past few months, says Dwyer.

    Pic of the day – SV CONCORDIA

    The sailing ship CONCORDIA arrived off Cape Town yesterday for a short visit, during which she will take on a small group of young South Africans as crew for the next leg of her voyage (see yesterday’s News Bulletin for details). Picture by Aad Noorland

    Don’t forget to send us your news and press releases for inclusion in the News Bulletins. Shipping related pictures submitted by readers are always welcome – please email to info@ports.co.za

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