Ports & Ships Maritime News

Jan 27, 2010
Author: Terry Hutson

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  • First View – SKUA

  • NYK looks to invest in Brazil port

  • WSC proposes Global Vessel Efficiency System to reduce carbon emissions

  • Africa-US tanker rate nears 17-month high

  • Piracy – more frustration at lack of action

  • New deal likely for troubled Rift Valley Railway

  • News clips – Keeping it brief

  • Today’s recommended Read – How plan to privatise railway became country’s public sector reform nightmare

  • Pic of the day –GEOWAVE MASTER


    First View – SKUA

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    The offshore tug SKUA (1207-gt, built 1976) in Cape Town harbour during January. Previouslynamed PENTOW SKUA in the service of Smit Amandla Marine, the tug which dates back to the days of Pentow Marine was sold to Indian interests last October. Picture by Ian Shiffman

    NYK looks to invest in Brazil port

    According to Codesa, the port authority for the Brazilian state of Espirito Santo, Japan’s NYL Line has expressed an interest in investing in Brazilian ports and in particular the USD300 million deepwater port project known as Superporto, which is under development outside the port of Tubarao.

    Angelo Baptista, the man in charge of the ports of Vitoria (breakbulk and containers) and Tubarao (coal and iron ore), said that NYK representatives would be visiting the Superporto site during March. He said that NYK’s interest had begun developing after Codesa and a business delegation from the State of Espirito Santo attended trade shows in Japan and China and paid NYK a visit.

    He said the deepwater project for containers and cars had attracted the interest of a number of leading players in addition to NYK Line.

    WSC proposes Global Vessel Efficiency System to reduce carbon emissions

    The World Shipping Council and its members have proposed to the International Maritime Organization (IMO) and its member governments a new global Vessel Efficiency System, which would improve the carbon and fuel efficiency of the world’s fleet and therefore reduce greenhouse gas emissions.

    The proposal is for the IMO to apply vessel efficiency design standards for both new and existing vessels in the world’s fleet. Newly built vessels would be subject to mandatory efficiency standards requiring new ships to be built with features and technologies that further improve the energy efficiency of the vessels to reach defined levels. These standards would be similar in nature to the fuel efficiency standards required of cars and trucks in many countries around the world today. The standards would also be tiered with higher standards required over time as technology developments allow further improvements.

    Under the Vessel Efficiency System (VES) proposal, existing vessels, like the newly built, would also be subject to improved efficiency standards. Recognising that existing vessels have more limited ability to improve efficiency, existing vessels would be subject to less aggressive standards. These standards would be tiered over time. Establishing efficiency standards for existing vessels is important due to the long life of vessels. Most vessels today operate for 25 to 30 years before being recycled, meaning that improvements in the existing fleet can contribute to reduced CO2 emissions sooner than a system that would rely solely on application of standards to newly built vessels.

    Under the VES proposal, existing vessels that meet the established efficiency standards would operate free of any fees. Existing vessels that fail to meet the standards would be subject to a fee assessed for each ton of fuel consumed. Fees would be deposited into a fund managed by the IMO. The specific fee assessed would vary depending on how close the vessel was to meeting the standard, with the fees being higher for those vessels with the lowest efficiency. As such, the proposed system would reward improved efficiency across the fleet and discourage operation of the least efficient vessels.

    “The IMO achieved significant success recently in reaching a legally-binding global agreement that will dramatically reduce NOx, SOx, and particulate matter (PM) emissions from ships around the world. It is appropriate for the IMO to build on that success and establish an international regulatory system that can reduce carbon emissions as well,” said Chris Koch, President and CEO of the World Shipping Council.

    “The World Shipping Council and its members hope that the Vessel Efficiency System proposal will help the IMO develop a specific regulatory regime that would ensure improved efficiency across the world’s maritime fleet and reduce CO2 emissions. Such action will demonstrate the continued leadership of IMO and the maritime industry in forging progressive solutions that will protect the environment and provide an effective global response to this global issue.”

    Greenhouse gas emissions and their effect on the Earth’s climate has been the subject of intense study and debate. Recent discussions by the world’s governments in Copenhagen did not produce a legally-binding global agreement, and, given the notable differences on key issues, it appears that such an agreement would be very difficult to reach in the near-term. The Copenhagen debate did, however, reveal a broad consensus on the need to pursue greater energy efficiency across the world and across multiple industrial sectors. Focusing on improved efficiency is appropriate for the transportation sector generally, as noted in a separate paper about emissions policy submitted to the IMO by the World Shipping Council.

    Although the Copenhagen meetings provided no specific guidance, the International Maritime Organization in March will continue its efforts to explore what global agreements may be feasible to contribute to reducing GHG emissions from shipping across the globe. Ships are the most-carbon efficient mode of transporting goods today. They are more efficient in moving a given volume of goods than air, rail, or truck. Nevertheless, while ships are already very efficient when compared to other transportation modes, improvements can be made that will further improve efficiency with a consequent reduction in carbon emissions.

    The proposal by the World Shipping Council to establish a global Vessel Efficiency System shares the same strategic focus of rewarding improved vessel efficiency as proposals recently made at the IMO by Japan and the United States. The VES also would provide for a Greenhouse Gas (GHG) fund that could be used for carbon efficiency research and development and other carbon reduction initiatives.

    Editor’s Note: World Shipping Council members operate approximately 90 percent of the global liner ship capacity, providing more than 400 regularly scheduled services linking the continents of the world. Collectively, these services transport about 60 percent of the value of global seaborne trade, or more than USD 4-trillion worth of goods annually.

    Africa-US tanker rate nears 17-month high

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    MOL’s VLCC Iwatesun picture courtesy MOL

    Shipping rates for supertankers on the Africa – US route have soared on the back of rising shipments of crude, a Clarkson Research Services report states.

    VLCCs will ship at least 19 million barrels of oil (2.6m tonnes) to the US from Africa during January, up from 18.2mt in December as the US ramps up its imports from West Africa.

    This has led to VLCC rates between West Africa and US Gulf Coast refineries reaching around USD76,000 a day after fuel costs. With the decline in availability of smaller Suezmax vessels the rate on VLCCs has increased in proportion.

    Piracy – more frustration at lack of action

    While there may have been a lull in pirate attacks off the Somali coast in the past week (none have been reported), this will no doubt prove to be of a temporary nature. In the meantime Shipping Australia, the body that represents the interests of shipowners and ship agents in Australia has joined other representative bodies (see yesterday’s News Bulletin) in expressing frustration at the apparent impotence of the international community over rampant piracy.

    “The unacceptable situation prevailing now, with seafarers lives being threatened on a daily basis - and Somali pirates still operating with impunity - cannot be allowed to continue,” said Shipping Australia CEO Llew Russell.

    To date around 1,500 seafarers have been held hostage for ransom, some for periods of six months or more, despite the presence of international naval vessels and comprehensive measures taken by ship operators to deter the pirates.

    He too questioned why the pirates’ mother ships were allowed to operate with impunity up to a thousand miles from the nearest Somali coast, from where they launched attacks on commercial ships.

    In most instances, small boats or skiffs that conducted unsuccessful attacks are allowed to proceed back to Somalia without military intervention, giving the message that the military will not pursue operations to their natural conclusion. Similarly, intercepted pirates are often released only to return to Somalia without being arrested and prosecuted.


    Somali pirates are reported to be negotiating with Zodiac Maritime Agencies, the operator of two cargo vessels that were captured recently. One of the vessels, the chemical tanker ST JAMES PARK (13,924-dwt, built 1993) has a crew of 26 on board and was seized while en route from Spain to Thailand between Christmas and New Year. The other ship is the car carrier ASIAN GLORY (44,818-gt, built 1994) which has a crew of eight on board and was captured early this month outside the area covered by naval patrols. Both ships fly the British flag.


    Meanwhile it has been reported that the 15 seafarers on board the cargo ship LAYLA (1,010-gt, built 1975) which has been detained by port authorities at the Somali port of Berbera for over five months, are in failing health. The ship’s master spoke to a Berbera newspaper and claimed his ship had not been charged by the authorities but was also not allowed to sail. The ship arrived in Berbera on 17 August 2009 and after discharging cargo was prevented from sailing.

    New deal likely for troubled Rift Valley Railway

    A meeting is being held this week to settle the question of shareholder control of the non-performing Rift Valley Railway (RVR).

    Friday (29 January) is the deadline when RVR has to move into a new ownership structure and financing arrangement. This follows the introduction of Egypt’s Citadel Capital as the leading shareholder in the company, with Citadel having acquired a 49 percent share in Sheltam, the former South African-controlled company that originally secured the concession to operate the former Kenya and Uganda railway networks.

    According to sources both Uganda and Kenya have lost patience with RVR over poor or non-performance since taking on the concession in 2006 and are expecting a new ownership agreement and a fresh start to the concession.

    If this is not achieved insiders believe that the two East African governments will follow the example of neighbour Tanzania and cancel the concession – see that report in PORTS & SHIPS HERE.

    It is hoped that a new agreement will lead to the unlocking of development money from the original investors in RVR.

    Now read Today’s recommended Read – How plan to privatise railway became country’s public sector reform nightmare below.

    News clips – Keeping it brief

    No change at the Reserve Bank

    The SA Reserve Bank said yesterday that there would be no change to the repurchase (repo) rate which stands at 7 percent per annum. However, the decision was not unanimous, said Reserve Bank Governor Gill Marcus. “There were strong voices for a cut but no one discussed an increase,” she said. Marcus said the long-term inflation outlook was relatively favourable despite certain base effects that were likely to have an adverse effect on inflation outcomes in the shorter term. According to the bank the GDP growth will average 2 percent in 2010 and 3 per cent in 2011.


    Plans to send QE2 to Cape Town are abandoned

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    The retired Cunard liner QUEEN ELIZABETH 2 (QE2) will not be relocating to Cape Town. Istithmar, the investment division of Dubai World confirmed yesterday that the proposal has been scrapped and that no new plans for the ship have been drawn up. It said that there were a number of options under consideration for QE2. “Istithmar World is considering which option will best maximise value of the vessel.”

    QE2 is currently in Dubai where the ship was supposed to have become a floating restaurant and entertainment centre on a man-made island outside Dubai. This plan was also abandoned following the credit crunch of 2008/09. The company said later that it was sending the ship to Cape Town to become a floating hotel and tourist attraction for a ‘limited period’ which would have included the period during the FIFA soccer world cup.


    CEVA Logistics renews partnership with Mannatech in South Africa

    Johannesburg – CEVA Logistics, a leading global supply chain management company, has renewed its partnership with Mannatech, a company developing innovative, high-quality, proprietary nutritional supplements, skin care solutions and weight management products.

    Over the course of the three-year contract, CEVA will take charge of Mannatech’s supply chain in South Africa. CEVA will continue to manage inbound logistics and warehousing activities, oversee product distribution and home deliveries throughout South Africa. CEVA will also offer picking and packing solutions, product tracking and returns management. CEVA has dedicated an area of warehousing space in Johannesburg to Mannatech and will handle around 300,000 items per year.


    Famous Pacific Shipping plans global expansion

    Asia-based Famous Pacific Shipping (FPS) Group, which is represented in South Africa, is looking for new members to share in its access to some of the most profitable and attractive freight markets in the world. In particular, FPS is looking for new freight forwarding members from the Commonwealth of Independent States, North Africa, and parts of the FSU, such as Poland, Romania and Bulgaria. The FPS Group is already represented in more than fifty markets throughout Asia, North and South America, Europe and the Middle East.


    Nigerian shipowners say they can handle oil deliveries

    Nigerian shipowners say they have sufficient capacity to handle the shipment of crude oil from offshore platforms to the NNPC refineries in Port Harcourt and Warri. The Nigerian National Petroleum Corporation (NNPC) said last week it was considering moving crude oil by sea rather than by pipeline because of ongoing sabotage on land. Local shipowners have immediately come forward asking to be given the opportunity of moving the oil by ship, particularly as this movement falls under Nigeria’s cabotage regime.


    Auditors question Kenya Port Authority procurement practices

    An auditors report says that Kenya Port Authority’s tendering process is fraudulent and has incurred additional costs of KSh416 million on the modernisation of Mombasa’s port power supply and distribution project. The auditors claim that KPA allowed a 64 percent variation on the contract whereas the Public Procurement and Disposal Act of 2005 allows only a 15 percent variation on contracts.

    “The variation of the project was not advertised and tendered for competitively as they were completely new works not included in the original tender documents. The variation is above the allowed thresholds as per the Procurement and Disposal Act 2005,” the audit report says. It adds that the contract was fixed-sum and that no variation should have been carried out without first changing the contract entirely.


    New ferry service links Maputo with Matola

    Two new ferries named MALUAZE and PALUA SANTOS have inaugurated a maritime passenger service linking Maputo with Matola and complementing the existing bus and train services. The ferries, which can carry up to 70 people and require a five-man crew, take 30 minutes from the Maputo terminal to Matola-Rio, with a stop at the Maputo Fishing School on the way. The government hopes to expand the service to operate between Maputo and Costa do Sol and to the island of Inhaca. The two vessels cost a total of €2-million.

    Today’s recommended Read – How plan to privatise railway became country’s public sector reform nightmare

    If you have been somewhat confused over the privatisation debacle surrounding the former Kenya and Uganda railway networks, since renamed Rift Valley Railway, don’t feel embarrassed. The matter has become highly technical and convoluted. The bottom line is that the South African company that won the concession to operate the railway has failed to make any improvements in terms of operational efficiency and performance, leaving the port of Mombasa further congested and shippers entirely reliant on an expensive road transport system. There have been reasons why the venture has failed to get off the ground, and not all the fault must lie with the management of RVR – for one thing they did inherit a run-down excuse for a railway that successive governments in both Kenya and Uganda had allowed to deteriorate almost beyond revival – a fact that has since been acknowledged by Kenya’s transport ministry. On the other hand the RVR management knew this going in.

    In the attached article Nick Wachira of the Nation newspaper sets out the background to the concession and this week’s meeting that will decide whether RVR remains a privatised railway or reverts to government control.

    Read the full article HERE

    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.

    Pic of the day –GEOWAVE MASTER

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    The Norwegian seismic research ship GEOWAVE MASTER (11,368-gt, built 2000) completed her 20-day sojourn in the Durban Dry Dock yesterday (Tuesday), where the vessel underwent a maintenance refit and some necessary repairs after spending several months at work offshore of Namibia. After sea trials this week the highly specialised ship will head for the Rovumo block off northern Mozambique to conduct seismic research there, before returning later to Namibia. Picture by Steve McCurrach http://www.airserv.co.za/maritime.htm

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