Ports & Ships Maritime News

Jan 13, 2010
Author: Terry Hutson

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  • New life for Dar es Salaam – Zambia railway link

  • Transnet signs order for new locomotives

  • Customs tips from Customs@Wylie

  • News from the shipping lines

  • German ferries for Kenya

  • News clips – Keeping it brief

  • Today’s recommended Read – East Africa looks to revive its railway network

  • Pics of the day – SEA LION 1



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    The offshore supply vessel HELLESPONT DEFIANCE (2,177-gt, built 2009) which was in Cape Town in the last few days. The modern vessel is owned by Norway’s NFC Offshore AS. Picture by Aad Noorland

    New life for Dar es Salaam – Zambia railway link

    A USD39 million interest free loan by China will inject new life into the Tazara Railway linking the Tanzanian port of Dar es Salaam with Zambia and regions further south and north.

    Zambia’s Transport Minister Professor Geoffrey Lungwangwa said the money would be used to acquire six new locomotives, four wagons and would see to the repair of 120 other wagons.

    He said the finance came available following a meeting held in China in December. “It will go towards improving the operations of the company (Tazara),” the minister said. Zambia requires a reliable link with the coast following increased production of copper and improved agricultural activities.

    He said a team of experts from China would arrive soon to work with the Tazara management with the aim of improving the rail linkages between Zambia and its neighbouring countries. Meanwhile, Presidents Rupiah Banda of Zambia and Jakaya Kikwete of Tanzania have called on the board of directors of Tazara to speed up the process of concessioning the railway to a competent railway operator from China.

    Tazara was built by the Chinese in the 1970s to provide Central African states with an alternative route to the sea. However, in recent years the 1860-km long railway has deteriorated from poor maintenance and operating procedures to the extent that mining interests as far north as the DRC opt to rail copper and other commodities to the more distant ports of Durban, Richards Bay and Maputo.

    Announcing the financial assistance from China, the Times of Zambia this week said that once new equipment has been acquired and the infrastructure rehabilitated, there will be improvements in service delivery and ultimately in profit levels because clients would be attracted as a result of quality service.

    “Employees' salaries and conditions of service will also improve and the firm will have a motivated workforce. Tazara should therefore, be redeemed in earnest so that the country can reap the benefits and ensure that loan repayment is on course.”

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    Port of Dar es Salaam

    Transnet signs order for new locomotives

    The following announcement was issued by Transnet during late December while PORTS & SHIPS was taking a break:

    Transnet Limited is pleased to announce that it has signed an agreement with General Electric South Africa Technologies (Pty) Ltd, paving the way for GESAT to supply 100 new diesel locomotives for use primarily in the Transnet’s general freight business (GFB).

    The transaction was signed at a ceremony held in Johannesburg by Mr Pradeep Maharaj, the acting Group CE of Transnet, and Ms Swaady Marie Martin, GE’s regional director for Southern Africa and acting chief executive of GESAT.

    In terms of the commercial contract, GESAT will work with Transnet Rail Engineering in
    executing the order. This is part of Transnet’s efforts to localize supply of imported equipment of its R80 billion capital investment programme to promote industrial development.

    “This is a very exciting transaction for us. We are thrilled at being able to leverage the transfer of skills, protect local employment and transfer technology into South Africa from the OEM”, says Mr Chris Wells, the acting Group CE at Transnet, referring to the Company’s continued participation in the government-inspired Competitive Supplier Development Programme (CSDP).

    This is the biggest CSDP commitment by Transnet which has pioneered this programme since its inception more than a year ago.

    Mr Wells says Transnet is committed to expanding the CSDP programme to the acquisition of port equipment as well.

    Mr Wells says: “We are appreciative of the dedication and hard work of all the bidders and look forward to a continued relationship on current and future fleet renewal programmes”.
    To expedite the supply of the order, this tender was open only to original equipment manufacturers (OEMs) in keeping with Transnet’s procurement policies.

    Mr Wells says: “As we progressively implement Transnet’s fleet renewal strategy to augment the aging GFB fleet, we expect service levels to our customers, including safety, to improve significantly”.

    According to the agreement with GESAT, the first locomotive is to be delivered in 2011 and the last in 2012.

    Customs tips from Customs@Wylie

    Customs@Wylie have issued another of their useful flyers which contains the following:

    Retrospective amendments to the Customs & Excise Act 91 of 1964

    On 31 December 2009, the South African Revenue Service instituted a few changes
    which have been implemented with retrospective effect from 1 January 2007.

    An example of this is Government Notice 1235 dated 31 December 2009, which effectively removes Rebate Item 317. from Schedule 3 of the Customs & Excise Act 91 of 1964 ("the Act").

    In other words, importers are no longer entitled to a rebate of duty on "Goods of any description (excluding two-wheeled tractors and trailers whether or not presented together and excluding chassis fitted with engines) for the manufacture of dumpers with articulated chassis of a G.V.M. exceeding 5 tons of tariff subheadings 8704.22.90 and 8704.23.90".

    Furthermore, Government Notice 1237 dated 31 December 2009 goes on to amend
    Rebate Item 317.07 of the Act.

    This Government Notice amends the definition of heavy vehicle listed in Note 1(c) and (d) to include "dumpers with articulated chassis of a G.V.M. exceeding 5 tons".

    This amendment effectively allows the importer the following:

  • a rebate of the full duty less 15% on pneumatic tyres, whether or not fitted to wheel rims, imported under tariff heading 98.01; and

  • a rebate of the full duty on other original equipment components imported for these vehicles.

  • Importers and Clearing Agents must be wary of these changes and must ensure that the correct information is reflected on their Customs documentation.

    Did You Know?

  • Comments relating to the Draft Customs Duty Bill and Draft Customs Control Bill are due by the 26 February 2010?

  • You could market your mining and agricultural related products during May 2010 at the Copperbelt Mining, Agricultural & Commercial Show in Kitwe, Zambia? For
    more information visit HERE

  • The Alternative Dispute Resolution process applies to various taxes e.g. Skills Development Levy; Estate Duty; Income Tax etc.?

  • This flyer is created by Customs @ Wylie, an initiative of Shepstone & Wylie's, International Transport, Trade & Energy Division, with offices in Durban, Cape Town, Richards Bay and Johannesburg.

    News from the shipping lines

    Japan’s K Line to restructure

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    K Line intends a stronger emphasis on non-container ships

    Japanese shipping company "K" Line is forecasting an ordinary loss of JPY71 billion (USD766.24 million) and net deficit of JPY79 billion for fiscal 2010 on operating revenues of JPY810 billion.

    This comes amid projections that the worldwide container shipping industry will record a maximum annual deficit of JPY2 trillion in 2010. “In view of the adverse circumstances and in the absence of a clear road map for overcoming this unprecedented global economic crisis, it is necessary to be realistic and pragmatic,” said president and CEO Hiroyuki Maekawain his New Year's message.

    “We should not expect much improvement in the business environment for the next several years, and as such, it is imperative that we concentrate our efforts on paving our own new way for the future of the company.”

    Henceforth, the group will focus on earnings improvement, business restructuring, and the pursuit of “aggressive” reform across the entire organisation in a bid “to rebuild the company and reinforce its strong competitive standing,” the group's president said.

    “In the short term, we have held back on capital investment plans in order to focus on the immediate restructuring of the containership sector, which has suffered the greatest damage, by scaling down and reorganising freight services to North America and Europe in accordance with the decline in demand.

    “Our fleet has been reduced by selling, demolishing or returning up to 30 vessels for a swift streamlining of our shipping operation. Additionally, for the purpose of improving cash flow, orders that had been placed for the construction of new vessels have been postponed or changed to other vessel types, and early termination of chartered vessels has been implemented as well. To achieve this restructuring it has been decided to allocate around JPY50 billion,” said Mr Maekawa.

    “All the containership group members have been requested to continue conducting a zero-based review of their operations including rate restoration and augmenting cost-competitiveness as well as an overhaul of existing services with a view to future potentials,” he added.

    The original investment plan of JPY500 billion for the three-year period between 2009 and 2011 has been cut 50 per cent, to improve the group's financial indicator.

    Another task of 2010 will be to expand the Energy Transport Sector as “the new pillar of profitability, through new businesses including offshore support vessels, ultra deepwater drill ships, and floating LNG producers.”

    Lastly, “new business strategies” are currently under consideration within the logistics department, which will be incorporated into "K" Line's mid-term management plan and announced in the near future.

    The president also added that "K" Line's “profit-earning capacity has already seen rapid improvement,” and owing to the measures the group is planning to take in 2010 to turn the business around, “our hopes are now much higher that we will likely return to profitability for FY2010 ending March 2011.” – source HKSG & "K" Line


    CMA CGM denies Iran link

    French container giant CMA CGM says there is no truth in Iranian reports that CMA CGM had ‘begun operations’ into the Iranian port of Bushehr. The carrier said that a call at the port by the container ship SIMBA had been “exceptional” and did not signify that future calls would be made.

    Earlier, the Tehran Times reported claims by a Bushehr deputy port director as saying that traffic from CMA CGM was about to increase tenfold. This apparently followed a lengthy investigation by personnel from the French company into the port infrastructure and handling capability.

    CMA CGM said the Iranian port call was an exception to the line’s routine rotation of Khor al Fakkan, Mina Qaboos, Sohar, Khor al Fakkan on which the Simba is deployed. The attention the ship’s call attracted is possibly related to a weapons haul found on board another CMA CGM-related company ship, the ANL AUSTRALIA after it underwent a routine check in the Persian Gulf that uncovered ten containers of North Korean weapons allegedly destined for Iran. The vessel was under charter to an Italian company and ANL, a CMA CGM subsidiary has since been advised it will not be facing prosecution.

    German ferries for Kenya

    Two new ferries built in Germany are due to arrive in Kenya in March and will take up service with the Kenya Ferry Services. Each ferry will have a maximum capacity of 1,550 passengers and 60 motor vehicles.

    According to a report from the Kenya Broadcasting Services the two vessels, costing just under €6 million each, will be named MV KWALE and MV LIKONI and once in service are expected to provided some much needed breathing space for the company’s other ferries allowing them to undergo maintenance and servicing.

    Regular passengers of the ferry services have expressed concern over the condition of the existing fleet, saying that the vessels are a disaster waiting to happen because of persistent mechanical breakdowns.

    A spokesman for the ferry company said that government had made finance available to acquire spares and begin maintenance operations on one of the ferries which is grounded, MV KILINDINI.

    When all are available Kenya Ferry Services operates with a fleet of five vessels, providing a ferry service across Kilindini Harbour between the island city of Mombasa and the mainland town of Likoni. The five ferries are MV MVITA and MV PWANI, which were acquired new in 1969 and 1974 respectively, and three secondhand vessels bought in 1990, MV HARAMBEE, MV NYAYO and the now grounded MV KILINDINI.

    News clips – Keeping it brief

    Proposed EAC railway will cost USD900 Billion

    The proposed new railway network for the East African Community which was announced in 2009 will cost an estimated USD900 Billion, the Uganda Ministry of the EAC has revealed.

    Money for the mammoth project is expected to come from development partners and regional banks, said the Ministry. It is proposed to build the railway to European standard gauge from the port of Mombasa and reaching into Uganda and other neighbouring states – eastern DRC, Rwanda, Burundi, and Southern Sudan. Similarly a new railway network extending from the Tanzanian ports of Dar es Salaam and Tanga will extend inland to the Great Lakes area, linking the EAC region.


    Coal ships travel via Cape of Good Hope

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    Picture courtesy TNPA, Richards Bay

    Dry bulk vessels carrying coal from South Africa to the Mediterranean will do so via the Cape of Good Hope in order to avoid piracy off the coast of Somalia, according to a report in Hellenic Shipping News. This adds about ten days to the voyage and traders in Italy, Greece and Israel are having to pay higher shipping costs as a result. The report said that about 60 percent of South Africa’s 61 million tonnes of export coal is destined for Europe, with the balance going to India and Asia. The report quoted a shipping source at a large international trader who said that about 80 percent of the owners that he deals with are refusing to allow ships to go from South Africa through the Gulf of Aden. ”They have a standard clause in freight contracts now which gives the master the freedom to choose whichever route he thinks is the safest, even if it doubles the voyage time,” he said.


    Train accident costs Transnamib R5 million

    A derailment along the Namibian railway between the port of Walvis Bay and Windhoek on 1 January will cost Transnamib an estimated R5 million to clear, the railway company has announced. The train was travelling from the port towards the capital and between Brakwater and Windhoek the two locomotives, three coaches and four fuel wagons derailed because of a broken rail. Of the 25 passengers on board the train, five received injuries. Rain has hampered clearing up operations. An investigation is underway.


    Washaway closes vital Tanzanian railway to port

    Heavy rains in Tanzania have closed a section of the railway between the port of Dar es Salaam and Dodoma after a bridge over a river was washed away. It is feared the washaway may close the Central Railway line for as long as several months. In other rain-related incidents rail services to Mwanza, Tabora and Kigoma have been suspended.

    Today’s recommended Read – East Africa looks to revive its railway network

    The collapse of the Uganda Railway Corporation 15 years ago opened up lucrative opportunities for privately-owned road transporters. But the high cost of maintaining the highways, used by heavy trucks and buses, is making governments to take a fresh look at the railway. Read more HERE and also see the report Proposed EAC railway will cost USD900 Billion earlier in this Bulletin.

    If you have any suggestions for a good read please send the link to info@ports.co.za and put GOOD READ in the subject line.

    Pics of the day – SEA LION 1

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    The chemical and oil products tanker SEA LION 1 (8,503-gt built 2007) which arrived in Cape Town on Monday this week. Pictures by Ian Shiffman

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