Passenger ship SS Rotterdam for sale
ss Rotterdam. Picture Wikipedia Commons
Dutch corporation Woonbron said on Monday that it wanted to sell the former flagship of Holland America Line, the ss ROTTERDAM “for a reasonable price.”
The preserved ship was opened to the public in February 2010, since when more than 500,000 visitors went on board during that year alone, about five times the number expected.
Sales of tickets and memorabilia amounted to €40 million.
Refurbishment costs amounted to far more than was originally anticipated, partly on account of the large amount of asbestos that had to be disposed of, which delayed the
intended opening of the ship to the public in the summer of 2009 (northern hemisphere). Woonbron was also a victim of the economic downturn and was temporarily placed under
judicial management.
SS Rotterdam is berthed on the waterfront of the peninsula Katendrecht where it is being used as a hotel. The ship was launched by Queen Juliana in September 1958 and retired
from service in September 2000.
Death of Sammy Ofer, father of Israeli shipping
Rumanian-born Sammy Ofer, Israeli business tycoon and owner of Ofer Brothers Group, died on Friday (3 June) at his home in Tel Aviv. He was 89.
The Ofer Brothers Group has remained a family run business since its foundation in 1950. Thought to be Israel’s richest man, he and his brother Yuli ran a corporation
involving shipping, oil refineries, chemicals, banking and media. Among their shipping interests are Zim, Zodiac and the Singapore-based Tanker Pacific.
In May this year the US imposed sanctions on the Ofer Brothers Group and on Tanker Pacific because of alleged commercial dealings with Iran. The group was accused of selling a
tanker RAFFLES PARK (since renamed EMMA) to Iran. The Ofer Brothers Group has denied the allegation.
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MOMBASA DELAYS RAISE SPECTRE OF SURCHARGES
Port of Mombasa Container Terminal
British journal ‘Containerisation International’ is reporting that increasing congestion and delays at the Kenya port of Mombasa is again raising the possibility of surcharges
being imposed.
“Mombasa has major issues,” an executive of an Asian-based carrier told the London-based magazine. “Delays are averaging seven to nine days and have been consistent for the
past month. There has been active talk about imposing a port congestion surcharge although the quantum is still to be decided."
CI reported that cargo handling rates have dropped to “well under 10 containers an hour – well off the port’s target of 25 container moves an hour. The source said some of the
port’s problems go back to the dismissal of crane drivers and support staff following a dispute over wages and the Kenya Port Authority and government’s plans of privatising
the port.
Repairs to the quayside are also impacting on berth availability. “It is understood that problems with the KPA's cargo clearing system, and a more rigorous regime for weighing
containers before they leave the port, have exacerbated the delays,” said the CI report.
The magazine’s source said he was giving things another week to see if the situation improved, after which he said he would not be surprised if some carriers began by-passing
Mombasa “since the cost of calling will outweigh the benefit.” – source Containerisation International
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PIRACY: THE HUMAN COST EXAMINED
Pirate’s mistreatment of seafarers is grossly underreported – study

According to a new report issued on Monday (6 June), seafarers being held by Somali pirates are being systematically ill-treated and the matter is getting worse.
The report, commissioned by think-tank Oceans Beyond Piracy (OBP) said thousands of seafarers have been subjected to gunfire, beatings, extended periods of confinement and, in
some cases, torture in the Indian Ocean and Gulf of Aden at the hands of their captors.
It says that during the course of 2010, 4,185 seafarers were attacked with firearms and rocket propelled grenades (RPGs). Of these 342 survived incidents in citadels, or ship
reinforced security rooms. Just over one thousand seafarers (1090) were taken hostage while 516 were used as human shields.
OBP says that the crimes at sea faced by seafarers can be compared to similar crimes on shore using United Nations Office on Drugs and Crime (UNODC) categorisations. “The
rates of kidnapping and major assault (where life is put at risk) are the highest in the world in the waters off the coast of Somalia. While the murder rate at sea was below
the world median in 2010, it is expected to rise precipitously in 2011.”
It says that seafarers subjected to armed attack on vessels equated to 697.5 persons per 100,000 – the next worst according to the UN study is South Africa where 576 persons
were subjected to Major Assault per 100,000.
The cost to the Somali community was also concerning, the report said. “Piracy affects food security and endangers Somali youth.”
According to the UNODC, between 200 and 300 pirates have not returned from their expeditions since the resurgence of piracy off the Horn of Africa. It said that there is
evidence of coercion and exploitation of Somali youth, and gives the example of the capture by the Indian Navy of 61 pirate survivors from the highjacked Mozambique fishing
vessel Vega-5, which was being used as a pirate mother ship. Of the 61 survivors, 25 pirates were suspected to be under the age of 15 years, and at least 4 were as young as
11.
The economic cost of piracy is now well known, the report adds, but it makes clear that the extent of the human cost is much less well-known and is staggering.
Shipowners holding back on ill-treatment of seafarers
Coincidentally, a security company spokesman talking at a conference on piracy says that shipowners are holding back some of the worst news about the treatment of seafarers
taken hostage by Somali pirates.
The claims made by Andrew Palmer, CEO of UK security firm Idarat Maritime have been firmly denied. Nevertheless his statement that the truth is not in the interests of
shipowners is a difficult one to refute, particularly considering that providing details of the known physical and psychological suffering results in alarm among seafarers and
their families.
It’s also been widely observed that shipowners are extremely reluctant to speak about a vessel that has been highjacked (there are some exceptions) and instructions are
regularly issued to agents to avoid having crew from a previously highjacked vessel interviewed by media at the next port of call. This is undertaken even to the point of
spiriting the crew away the moment they arrive in the first port after being released. In many cases crew are required to sign confidentiality agreements upon their
release.
According to the International Shipping Federation (ISF), which represents shipowners in labour matters, there is no evidence to back these claims and the ISF says it has no
information concerning the torture or suffering set out in the Oceans Beyond Piracy study.
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COAL EXPORTS DOWN AS RESULT OF RAIL MAINTENANCE

Latest statistics made available by Richards Bay Coal Terminal RBCT) indicate a sharp decline in coal exports, presumably as a result of maintenance on the railway that saw
its closure for three weeks. See our report Transnet Freight Rail to shut down the coal line for three weeks
During May RBCT exported 3.572 million tonnes of coal after having received 4.406mt from TFR. In the previous month RBCT exported 4.807mt of coal indicating a sharp drop,
while in May 2010 it shipped 4.569mt. At the current rate if annualised, RBCT will achieve exports of 54.72mt of coal this year, compared with 63,427mt for 2010.
These figures stare in the face of the terminal having upgraded its facilities to handle up to 91mt a year. There is mounting concern among analysts and business interests
whether South Africa’s state-owned rail unit is able to cope with the fluctuating demands of coal exports.
TFR, or Spoornet as it was then called, has handled well in excess of the 62 million tonnes of export coal shipped to RBCT each year over the past few years. A series of
derailments, as well as claims that some of the mines do not have compatible rail systems or are unable to handle block trains, have led to setbacks that each year has
impacted on export figures.
However, an honest analysis will suggest that all the problems may not be caused by TFR. During May when the terminal shipped just 3.572 million tonnes of coal, it received
from TFR 4.406mt and was left with a reserve stockpile of 4.407mt at month end. On the face of things this suggests that RBCT could have exported up to 4.5 million tonnes in
May without compromising the stockpile.
Did falling coal prices perhaps have a role to play, having declined 8.7% so far this year and 4.6% in the final three weeks of May? These figures are according to London
researcher HIS McCloskey, which reported an increase in the first week of June to US$118.49 a tonne.
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SPECIAL FEATURE: FREE TRADE DEAL COULD BOOST TRADE INVESTMENT IN AFRICA
by Stephen Timm
Cape Town, 7 June 2011 - A grand free trade agreement among African states – under discussion next weekend – could boost intra-continental trade and investment.
The Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for East African States (Comesa) are to meet in Pretoria on June 11
and 12 to discuss the idea of a tripartite free trade agreement (FTA) first mooted three years ago.
But, while South Africa’s Minister of Trade and Industry Rob Davies, and some trade analysts believe such an agreement, along with work on several trade corridors in and
around southern Africa, will boost trade and investment on the continent, some trade experts are of the opinion that Africa is not ready for such a deal.
“What the combined FTA will do, is it will create a larger regional market where we can operate in those 26 countries with a combined GDP (gross domestic product) of $833
billion and 530 million people,” said Davies this week.
SADC has a partial free trade agreement which has been implemented since 2008 that allows for goods to be traded across member countries either at zero or very low tariffs,
but Davies said these tariffs only applied in SADC and not between the three communities.
Though he declined to reveal South Africa’s approach ahead of the summit, he said the summit would be an opportunity for South Africa to expand its market to assist other
least-development countries and therefore meet some of the needs of the Doha Development Round.
This could go some way to fulfilling commitments proposed by the World Trade Organisation (WTO), particularly after Davies announced last month that he did not expect the Doha
round to be concluded this year.
Rob Davies, minister of trade and industry
Davies said regional economic co-operation was all the more important given that the growth in the domestic market was an important driver of Africa’s resurgence, but he
pointed out that any move to boost regional trade would be contingent on infrastructure development.
McKinsey’s Lions on the Move, released last year, revealed that African governments and the private sector were investing $72 billion a year on infrastructure, but that the
continent still needed to spend another $46 billion a year to meet energy, water and transportation needs.
African Development Bank logo
According to the African Development Bank, trade between African countries remains low, making up just 10 percent of the continent’s total trade, compared with North America
where trade between that continent’s countries makes up 40 percent, or Western Europe where intra-continental trade makes up 60 percent.
Added to this the bank points out that because of poor roads and railways Africa has some of the highest transport costs in the world, with freight costs representing 13
percent of African import costs, compared to 9 percent for Asia, 7.5 percent for Latin America and 5 percent for western countries.
Nepad, the AU and African Development Bank have teamed up to address the infrastructure backlog and last year the three launched the Programme for Infrastructure Development
in Africa to develop regional and continental infrastructure policies.
More recently President Jacob Zuma was chosen by Nepad and the AU to champion the North-South trade corridor, which traverses eight countries in eastern and southern Africa –
linking the port of Durban to the east African port of Dar Es Salaam.
The trade corridor is being backed by US$262 million that the Development Bank of Southern Africa (DBSA) has pledged to the National Road Fund Agency (NRFA) to finance the
upgrading of five major roads in Zambia and South African companies are already involved in the bidding process for three roads in Zambia, which form part of the corridor.
Roelof van Tonder chief executive of the Built Environment Professions Export Council, who also chairs the Nepad Business Foundation’s infrastructure working group, says there
had been a number of expressions of interest from South African contractors for the projects when the tender process opened recently.
He says the foundation was focusing on the Zambian projects as it is where the big gaps in roads infrastructure in southern Africa lies.
Gilbert Khadiagala, head of Wits’ international relations department, believes setting up a free trade area with a mega customs area on the continent is a more realistic way
to bring about economic integration on the continent, rather than the African Economic Community the AU wants in place by 2028.
He says that by working together to improve infrastructure between countries will enable African states to conclude a tripartite trade deal of this kind.
But other trade experts believe Africa’s goal of regional integration is still a distant dream.
Standard Bank economist Simon Freemantle says though regional integration is much needed on the continent, the idea of concluding a grand FTA is “slightly premature”.
SADC and each of the regional blocs should rather focus on getting customs regimes in their own individual regions right, he says.
He says although the three respective regional blocs had all put in place trade tariffs – with the EAC being the most recent of the three groupings to do so, in January –
these took time to take effect as awareness of the tariffs and the necessary infrastructure needed to then be put in place.
Peter Draper, senior fellow at the South African Institute of International Affairs (Saiia), says African economic integration suffers from a “litany of problems”, ranging
from overlapping memberships, through unfulfilled commitments, to unrealistic goals.
He says many African countries were still run as authoritarian states which meant building viable national states, never mind intra or inter-regional organisations, is a
challenging proposition.
Draper believes Africa should mould its own version of regional integration, and not look to emulate the successful EU.
In a paper titled “Rethinking the (European) foundations of sub-Saharan African regional economic integration”, published in March by economics website voxeu.org, Draper
argues that an African model on regional integration should be underpinned by a security regime and should prioritise trade and regulatory cooperation.
Draper argues that while regional economic integration in Africa could yield net benefits, it is not likely to drive economic development in the manner of East Asian economic
growth, unless it is complemented by north-south economic integration.
Martyn Davies, chief executive of Frontier Advisory, says the idea of a free trade area between SADC-Comesa and EAC is very far from conclusion.
Davies believes a lack of political will and understanding of the benefits of liberalised trade was what was holding back the regional trade agreement and was why African
countries maintained bureaucratic procedures and “rent seeking” practices when it came to trade.
He believes that in South Africa the failure of business and the government to partner successfully together – as China was doing – was also a major stumbling block to
regional integration.
China, and to some degree India, had the capital, focus and ability, says Davies and were driving regional integration – which he pointed out didn’t just mean improving
infrastructure links, but also integrating capital markets by for example setting up a regional stock exchange.
He singled out the recent setting up of a stock exchange in Angola as a case in point, saying Angolan companies would perhaps be better of listing on the JSE.
“The Chinese and the Indians are going to chomp us up if we don’t understand capital markets,” explains Davies.
In May, state-owned China’s Export and Import Bank announced that it would lend Zambia $180 million to upgrade a road that should help boost trade with central African
countries. Work is scheduled to begin next month.
A working paper by Richard Schiere and Alex Rugamba for African Development Bank’s released in April, and titled “Chinese Infrastructure Investments and African Integration”
revealed that China had last year pledged $50.7 billion in commitments for African infrastructure projects up 32 percent from last year.
In 2008 China received 21 percent of the African Development Bank’s total procurement contracts and 35 percent of its civil engineering projects.
However the authors said most of China’s investments are with single countries, the disadvantage being that regional infrastructure projects are often overlooked, including
various trade initiatives in the Eastern and Southern Africa and the North South Corridor.
India too is getting in on the action. In May Indian Prime Minister Manmohan Singh announced during the 2nd Africa-India Forum in Addis Ababa that it would offer $5 billion
over the next three years to help Africa to set up new institutions and to help capitalise the AU and regional economic communities to achieve regional integration on the
continent.
And Brazil plans to invest $300 million in Mozambique to develop infrastructure in Mozambique to support its coal and biofuels projects in that country, according to a report
in Business Times Magazine in November last year.
The magazine also reported that the Brazilian government had in May last year pledged to support infrastructure development in the EAC. International companies are also
getting increasingly involved in work on the continent.
Ian Donalson, regional managing director of global quantity surveying firm Turner Townsend, says the international company was doing far more work on the continent than it was
10 years ago.
He says the company was handling 12 projects on the continent, outside of South Africa, Mozambique, Botswana and Zimbabwe – where it has regional offices. This is up from the
three or four it was handling in 2000.
Most of the projects were in pipelines, transportation and building construction – with about half of all projects in the mining sector.
However Donaldson says his company’s push into the continent was driven more by saturation in the South African market, than opportunities created by trade corridors and other
infrastructure projects.
He says while red tape and bribes were still a problem on the continent, such that the company avoided doing work for certain governments, Lindsey Dyer, technical director of
infrastructure development for consulting engineering firm Aurecon SA, believes the capacity of African governments had improved in recent years such that many were now
“extremely well developed and professional”. – BuaNews
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PICS OF THE DAY – FAIRMOUNT ALPINE AND FAIRMOUNT GLACIER
FAIRMOUNT ALPINE (outer tug) and FAIRMOUNT GLACIER at the ship repair wharf on 24 May this year, prior to going on the Eldock floating dock in Durban harbour where they are
at present. Here they are seen moored at Elgin Brown & Hamer’s quayside prior to docking. Pictures by Steve McCurrach
www.airserv.co.za

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