INDIA's Ministry of Civil Aviation ministry is considering reviving public-private partnerships (PPP) to modernise 35 non-metropolitan airports and a few larger ones in major cities, after scrapping the idea in the face of airport union resistance.

"We are exploring the PPP mode for developing airports," said Civil Aviation Minister Ajit Singh, reported Live Mint-Wall St Journal.

The state-owned Airports Authority of India (AAI) modernised Chennai and Kolkata airport with cost overruns and missed deadlines rather than face down union opposition to privatisation.

"AAI has no money to modernise all airports of the country. It has invested substantially in two airports-Chennai and Kolkata. PPP is the most acceptable mode," said a senior aviation ministry official.

After eight years, the bidding process for modernisation of the Mumbai and Delhi airports started in May 2004 and bids were finally awarded in January 2006, signalling a landmark deal in Indian civil aviation history.

Delhi International Airport Pvt Ltd (DIAL), a consortium headed by the GMR Group, won the mandate to manage and develop the Indira Gandhi International Airport for 30 years, which can be extended by another 30 years.

Mumbai International Airport Pvt Ltd, a GVK group-led consortium, won the bid to manage and operate the Chhatrapati Shivaji International Airport, on the same terms.

Many of India's large industrial groups, including Anil Ambani's Reliance Group, Bharti Airtel Ltd, Sterlite Industries (India) Ltd, Essel Group and DSC Ltd had participated in the bidding. Companies such as IVRCL Infrastructures and Projects Ltd, Zoom Developers Pvt Ltd, Gammon Infrastructure Projects Ltd, L&T Infrastructure Ltd, Soma Enterprise Ltd and Unitech Ltd, apart from the groups that bid for the Mumbai and Delhi airports, took part in the government's plans to modernise 35 non-metro airports.

In August 2008, the government approved AAI's modernisation and expansion programme for the airport at Chennai at an estimated cost of INR18.08 billion (US$34.4 million) and for Kolkata airport at INR19.4 billion. Chennai airport was expected to be completed within 26 months of the award and Kolkata in 30 months. Both airports have missed their deadline.

"The terminal building of Chennai airport has been completed and it should be ready by the end of May. The civil works at Kolkata airport are finished and it will ready by July," said AAI official GK Chaukiyal.

Apart from the delay in completion, there has been a cost overrun as well. AAI is investing INR20.1 billion to build a facility that can handle 23 million passengers a year at Chennai and 25 million passengers at Kolkata INR23.2 billion. That translates into an overrun of 11.4 per cent at Chennai and 19.7 per cent for Kolkata.

"It missed the deadline for both the airports. AAI-led modernisation is not going to change the way airports are being operated. It's not their cup of tea," said a second unidentified civil aviation ministry official.

Source Shipping Gazette - Daily Shipping News

NEW YORK-listed United Continental Holdings (UAL) posted a year-on-year first quarter net loss of US$286 million - excluding one-off special charges - drawn on revenues of $8.6 billion, an increase of 4.9 per cent.

The loss excluded $162 million in one-off costs, mostly related the United-Continental merger process. Including that figure, first-quarter net loss stood at $448 million.

"This was a difficult quarter, but we made significant progress with our integration and we're now able to serve customers as a single airline. We can look forward to delivering more benefits from the merger in the remainder of the year," said UAL president and CEO Jeff Smisek.

First quarter consolidated passenger revenue rose 5.5 per cent to $7.5 billion year on year and consolidated passenger revenue per available seat mile (PRASM) increased 5.2 per cent year on year.

During the first three months, consolidated revenue passenger miles (RPMs) and consolidated capacity (available seat miles) both increased 0.3 per cent year on year, resulting in a first-quarter consolidated load factor of 78.1 per cent.

Air cargo and other revenue in the first quarter of 2012 was up 0.8 per cent or $9 million year on year.

But mainline RPMs dropped 0.2 per cent on a mainline capacity increase of 0.2 per cent year on year, resulting in a first-quarter mainline load factor of 78.5 per cent. Mainline yield for the first quarter rose 4.5 per cent year on year and the mainline PRASM grew 4.1 per cent year on year.

UAL's first-quarter consolidated fuel expense increased 20.8 per cent or $557 million year on year.

"Our revenue results were impacted by the integration of our revenue management and booking systems, which included reducing our booking levels so we could better serve our customers during the reservations conversion," said UAL vice president and revenue officer Jim Compton.

United Airlines and United Express operate an average of 5,605 flights a day to 374 airports on six continents from Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York/Newark, San Francisco, Tokyo and Washington.

Shipping Gazette - Daily Shipping News

 

NIGERIAN Aviation Minister Stella Oduah has won moral support for her idea of re-establishing a state-financed national flag air carrier from Air Gold Aviation managing director Ifeanyi Okocha, reported Nigeria's This Day.

But other than This Day's newspaper article, little appears on the web about Air Gold Aviation or Mr Okacha, other than sparse Facebook and Linkedin entries, the latter listing him as a "civil engineer at Federal Airports Authority of Nigeria".

Mr Okocha urged the federal government to establish a national carrier, noting that this would provide employment to 19,500 Nigerians, adding that a NGN985 billion (US$6.27 billion) loan would be enough to start the airline.

Mr Okocha said that he and his team of aviation professionals had carried out a feasibility study which would soon be submitted to Nigerian President Goodluck Jonathan.

"If Nigeria Airways Limited was managed professionally, the national carrier would still be operating today. But it was run on a civil service structure," he said.

Mr Okocha claimed that as at the time NAL was liquidated, the national carrier had four large maintenance departments, which should have been converted to maintenance, overhaul and repair facilities.

"Instead, NAL was closed down, thereby denying the government the opportunity of generating revenue. If NAL had been in existence, other domestic and international airlines operating in Nigeria would have been carrying out their maintenance checks from NAL hangars, thereby generating revenue," he said.

Shipping Gazette - Daily Shipping News


VISAKHAPATNAM, a major port city on the south east coast of India, is to launch air cargo services to allow exporters to get products to Europe, Africa and the US, reports the Deccan Chronicle.

At least two to three freight operations will be launched from the city commonly referred to as Vizag by US and Dubai-based NAKI Air from June with frequency to go up should cargo loads increase, the cargo operator told the Air Travellers Association (India) (ATA).

NAKI Air has been invited to visit the city to meet exporting companies including IT companies and other industrialists of the products its exports of pharmaceutical products, sea food, fresh vegetables and fruits, automobile products and other exports.

Shipping Gazette - Daily Shipping News

 

INDIA's Ministry of Civil Aviation ministry is considering reviving public-private partnerships (PPP) to modernise 35 non-metropolitan airports and a few larger ones in major cities, after scrapping the idea in the face of airport union resistance.

"We are exploring the PPP mode for developing airports," said Civil Aviation Minister Ajit Singh, reported Live Mint-Wall St Journal.

The state-owned Airports Authority of India (AAI) modernised Chennai and Kolkata airport with cost overruns and missed deadlines rather than face down union opposition to privatisation.

"AAI has no money to modernise all airports of the country. It has invested substantially in two airports-Chennai and Kolkata. PPP is the most acceptable mode," said a senior aviation ministry official.

After eight years, the bidding process for modernisation of the Mumbai and Delhi airports started in May 2004 and bids were finally awarded in January 2006, signalling a landmark deal in Indian civil aviation history.

Delhi International Airport Pvt Ltd (DIAL), a consortium headed by the GMR Group, won the mandate to manage and develop the Indira Gandhi International Airport for 30 years, which can be extended by another 30 years.

Mumbai International Airport Pvt Ltd, a GVK group-led consortium, won the bid to manage and operate the Chhatrapati Shivaji International Airport, on the same terms.

Many of India's large industrial groups, including Anil Ambani's Reliance Group, Bharti Airtel Ltd, Sterlite Industries (India) Ltd, Essel Group and DSC Ltd had participated in the bidding. Companies such as IVRCL Infrastructures and Projects Ltd, Zoom Developers Pvt Ltd, Gammon Infrastructure Projects Ltd, L&T Infrastructure Ltd, Soma Enterprise Ltd and Unitech Ltd, apart from the groups that bid for the Mumbai and Delhi airports, took part in the government's plans to modernise 35 non-metro airports.

In August 2008, the government approved AAI's modernisation and expansion programme for the airport at Chennai at an estimated cost of INR18.08 billion (US$34.4 million) and for Kolkata airport at INR19.4 billion. Chennai airport was expected to be completed within 26 months of the award and Kolkata in 30 months. Both airports have missed their deadline.

"The terminal building of Chennai airport has been completed and it should be ready by the end of May. The civil works at Kolkata airport are finished and it will ready by July," said AAI official GK Chaukiyal.

Apart from the delay in completion, there has been a cost overrun as well. AAI is investing INR20.1 billion to build a facility that can handle 23 million passengers a year at Chennai and 25 million passengers at Kolkata INR23.2 billion. That translates into an overrun of 11.4 per cent at Chennai and 19.7 per cent for Kolkata.

"It missed the deadline for both the airports. AAI-led modernisation is not going to change the way airports are being operated. It's not their cup of tea," said a second unidentified civil aviation ministry official.

Shipping Gazette - Daily Shipping News


IRU General Assembly calls on the European Union and its Member States to support the Smart Move campaign, reintroduce the TIR system in the EU, lift restrictive barriers on international freight and passenger road transport and acknowledge the vital role that road transport has to play in driving economic growth in Europe.

The IRU General Assembly adopted a Resolution on Driving the Europe 2020 Growth Strategy calling upon the European Union and its Member States to lift, without delay, the impediments and barriers imposed on the road transport sector and to recognise the vital role of road transport in driving economic growth.

IRU President, Janusz Lacny stressed, “The European Union’s 2020 Growth Strategy aims to create a smart, sustainable and inclusive economy. Commercial road freight and collective passenger transport have a pivotal role to play in each of these mutually reinforcing principles. To ensure that the road transport sector can play its role in driving EU growth, it is imperative that road transport is facilitated and further promoted, and restrictive barriers on road transport repealed.”

The IRU resolution specifically calls for:

  • an end to the indexation and introduction of new taxes, charges and duties on road transport and the earmarking of revenues to support investments in road transport and infrastructure initiatives;
  • the creation of a level regulatory playing field between transport modes in taxation, excise duty, and VAT;
  • an end to the continual subsidies for unprofitable rail freight services and to the discrimination between modes, created by the railways through the use of public funding to purchase road transport firms;
  • the adaptation of the legal framework to ensure a return on the investment in innovation, efficient, clean and safe technologies, to encourage further innovation and greening at source;
  • the facilitation of access for road transport operators to investment funds for the greening at source of their services;
  • the modification of the EU Customs Code to allow the use of the TIR system in the EU for goods transported under customs control and thereby releasing 600,000 road transport companies from the constraints of the current T system;
  • an increase in the efficiency and capacity of the EU’s transport system by promoting the use of the European Modular System (EMS) for all inter- and intramodal applications;
  • the promotion of an EU policy, based on the Smart Move principle objective of doubling the use of buses and coaches within the next decade.

“Through simple measures the EU could help to create up to 4 million new green jobs in the bus and coach sector, by adopting the IRU lead Smart Move campaign goals and stimulating growth and trade by freeing 600,000 road freight operators from the constraints of the T System by allowing the use of TIR in the EU for goods transported under customs control. Simple actions can have a major impact in creating a growing, dynamic, greener and more efficient Europe,” the IRU President concluded.

IRU

"The setup of a transnational logistics network in the south-eastern Baltic Sea region is the most important goal"

The potential of the Amber Coast region and its natural hinterland for the transport and logistics sector in Europe must not be wasted. This and other postulations were expressed by representatives of the transnational project called "Amber Coast Logistics" at the Baltic Sea Days in Berlin. Guests included international ambassadors, members of the Bundestag and representatives of companies and associations, besides German Foreign Minister Guido Westerwelle.

"The southern and eastern Baltic Sea region as well as Northwest Russia, Belarus and the Ukraine are among the most promising logistics regions of Europe. However, development of the transport and logistics infrastructure in these countries has been inadequate at best," said Axel Mattern, CEO of Port of Hamburg Marketing, the marketing organization for the Port of Hamburg, as he explained the background of the "Amber Coast Logistics" project (ACL) during the foreign trade conference "Baltic Sea Forum on the Baltic Sea Region” in the Federal Foreign Office in Berlin. "There are regions with low accessibility for the transportation of goods. We want to change this with ACL." Port of Hamburg Marketing is the lead partner of the EU-funded project, which has existed for around half a year. 19 other partners from Poland, Lithuania, Latvia, Belarus, Denmark and Germany are involved, including representatives of ports, logistics locations, public authorities and research institutes.

The Baltic Sea Forum took place as part of the Baltic Sea Days to which invitations were extended by the Federal Foreign Office on the occasion of the 2011/2012 German Presidency of the Council of the Baltic Sea States. The conference was mainly directed at companies and institutions of industry and trade from member states of the Council of the Baltic Sea States. German Foreign Minister Guido Westerwelle opened the event. He reminded everyone that cooperation between neighbouring Baltic Sea countries is not self-evident. There must be consistent and continuous work on the establishment of this important economic community.  

ACL workshop at the foreign trade conference

During its presidency of the Council of the Baltic Sea States, Germany put modernisation of the south-eastern Baltic Sea region on its agenda, especially elimination of the economic and infrastructure difference between the north-western and south-eastern Baltic Sea region. Through the project "Amber Coast Logistics" this task will be conferred on the transport and logistics industry. Backgrounds and the objectives of ACL were discussed at the foreign trade conference with around 50 international guests in the context of a workshop. The event was moderated by Kurt Bodewig, Federal Minister (ret.) and Chairman of the Board of the Baltic Sea Forum: "The Baltic Sea Forum on the Baltic Sea Region with around 550 participants provided a unique opportunity for the project to establish additional contacts to representatives of neighbouring Baltic Sea countries. The establishment of a transnational logistics network in the south-eastern Baltic Sea region is one of the most important goals of ACL. This is because only with strong partnerships can we also achieve the necessary organisational improvements for optimisation of the transport connections." The Baltic Sea Forum, a non-governmental association for promotion of the Baltic Sea region, is one of the 20 partners in the project. Besides Axel Mattern, speakers included Dr. Eugenijus Gentvilas, CEO of the Klaipeda State Sea Port Authority, as well as Mathias Roos, Project Manager of the EU project "East West Transport Corridor II" and Project and Communication Manager at Region Blekinge.

Parliamentarians informed about ACL

ACL project partners also presented their goals and results thus far to around 20 parliamentarians in Berlin during the course of the 11th port breakfast in the Hamburg embassy. Marina Rimpo, Project Manager of "Amber Coast Logistics" with Port of Hamburg Marketing, pointed out a few examples of some problems that confront logistics players in the southern and eastern Baltic Sea region. They included the different gauges of the railway network between the former Soviet Union and Western Europe as well as different VAT rates for imports from third countries into the common customs union of White Russia, Kazakhstan and the Russian Federation. During the course of the project, challenges like these are analysed and recommendations for improvement are compiled in policy papers that are submitted to politicians at national and EU levels. "The port breakfast brought together members of the Bundestag from all fractions and informed them about the EU project. We are delighted that the parliamentarians have already signalled their support," says Kurt Bodewig.

Port of Hamburg Marketing e.V.

GUANGDONG provincial ports, which include all ports but Hong Kong in the Pearl River Delta, posted a first quarter 3.4 per cent increase in container volume to 10.37 million TEU, Xinhua reports.

Municipally, Guangzhou lifted 3.25 million TEU, up 12.1 per cent; Shenzhen was up 0.4 per cent to 5.1 million TEU; Zhanjiang increased 21.2 per cent to 94,100 TEU and Shantou handled 270,400 TEU, up 12.3 per cent.

Overall provincial cargo throughput came to 302.23 million tonnes, up 5.2 per cent year on year. Guangdong's foreign trade cargo throughput increased 9.4 per cent to 108 million tonnes. Domestic trade cargo grew 3.2 per cent to 194.23 million tonnes.

Guangzhou handled 98.51 million tonnes, up 5.2 per cent. Shenzhen's increased 6.4 per cent to 53.48 million tonnes. Southern Guandong's Zhanjiang port lifted 42.79 million tonnes, up 11.9 per cent. Eastern Guangdong's Shandong port lifted 10.51 million tonnes, 11.5 per cent more than in the same period a year ago.

Shipping Gazette - Daily Shipping News

NEW YORK-based American Feeder Lines (AFL) has suspended its nine-month feeder service running between Boston, Halifax, and Portland, Maine and the carrier is now undertaking a restructuring process.

"Even one year into the service, we failed to generate sufficient cargo from the carriers and did not get the support of the trade," said CEO Tobias Koenig, reported American Shipper.

"The service has been suspended and we have been in talks with investors to continue. But unfortunately, these talks have died and AFL has therefore taken the decision to cease trading," said Mr Keonig, who started the service last July with a 700-TEU chartered vessel AFL New England.

"There is an iron curtain around the Jones Act industry and all participants are too scared of the outside world," he said.

"We have figured out how much money you need to spent to start a Jones Act pilot service, which we have tried to get approved, but I think that you can simply double or even triple the costs, after we have made our experience in the northeast. And I don't think that I will be there to spend that kind of money. My missionary efforts have come to an end," Mr Keonig said.

Shipping Gazette - Daily Shipping News

THIRTEEN of the world's 19 biggest shipping banks have stopped lending to the industry because too many ships are chasing too little cargo value, cutting cash flows and leading to vessel seizures, reports Bloomberg.

Investors who had been promised annual returns of 15 per cent have instead lost EUR37.5 million (US$49 million) when Germany's Container Flotten-Fonds went bellyup last year.

German tax exemptions for shipping funds, designed to provide cheaper financing than banks, are becoming meaningless, said Christian Nieswandt, head of domestic shipping clients at HSH Nordbank.

"The shipping fund market is more or less dead for years to come," he told Bloomberg. "There will be further insolvencies."

Like the US housing crisis, ships were bought at the price peak in 2007. After values slumped, the size of the loan in relation to the value of the ship used as collateral for the funding from banks rose.

The contract price for a 8,500-TEU ship dropped 31 per cent to EUR92.5 million in 2011, from a peak of EUR134 million in 2007, according to Morgan Stanley. Values will decline to EUR89.5 million this year, said the bank.

With even big players like AP Moeller-Maersk and Hapag-Lloyd showing losses last year as fuel costs rise, overcapacity persists and a price war threatening on the Asia-Europe route, many carriers cannot pay their debts, according to the VDR German shipowners' association.

Shipping funds financed purchases with borrowed money from banks, leaving them vulnerable when lenders raised interest rates, said Christian Luber, a Munich lawyer representing investors in failed German shipping funds.

"It is like when you buy a house: the less equity you put in, the more interest you pay," said Mr Luber, adding that banks financed 70 per cent of newbuildings with investors providing the rest.

Christian Murach, transport finance head at KfW IPEX-Bank, said some German shipping funds have been unable to service their debt "for years" and their ships may have to be sold. This prompted banks to write down the value of their portfolios, thus increasing expectations of further bank loan losses.

Shipping Gazette - Daily Shipping News

The Port of Los Angeles will spend more than US$3 billion on terminals, on-dock rail and intermodal links in a fight to retain its No 1 ranking as America's biggest container port against threats from Canada and the Panama Canal.

"Protecting and retaining discretionary cargo market share in the face of changing economic conditions and intensifying competition is the key to the future of the port and the region," said the recently released Port of Los Angeles 2012-2017 Strategic Plan.

With containers accounting for 80 per cent of its revenue, and Canadian ports diverting more cargo to themselves and US east coast ports siphoning off boxes via Panama, Los Angeles is in a fight to keep its 21 per cent share of US box volume.

Fifty per cent of the container shipments to LA are discretionary, according to the plan, making the future threat of an expanded Panama Canal in 2015 a clear and present danger as the waterway doubles capacity from an old 4,500-TEU ship limit to accommodate 12,000-TEUers.

Shipping Gazette - Daily Shipping News

CHINA's island province of Hainan province has posted a 11.3 per cent year on year first quarter freight volume increase to 19.05 million tonnes, Xinhua reports.

In the same period, the province recorded passenger number of 39.19 million people, up 12.9 per cent year on year.

Shipping Gazette - Daily Shipping News

CHONGQING has posted a 14.1 per cent increase in first quarter container throughput year on year to 97,000 TEU, Xinhua reports.

The city's international shipment tonnage totalled to 1.92 million tonnes, up 16.5 per cent.

International air freight surged 160 per cent to 25,100 tonnes. Waterway foreign trade containers jumped 59.7 per cent to 72,000 TEU, tonnage increased 15.5 per cent to 1.88 million tonnes.

Shipping Gazette - Daily Shipping News

BALTIC Container Terminal (BCT) in Gdynia Port in Poland handled 41,108 TEU in March, an increase of 38.9 per cent over the same month last year, the Baltic Transport Journal reported.

The throughput was the highest since October 2008 and also the highest after the first wave of the financial crisis. BCT is one of the biggest terminals in the Baltic region and the leading container facility in Poland.

During the first quarter of this year, BCT Gdynia handled 103,962 TEU, a surge of 23 per cent year on year.

Shipping Gazette - Daily Shipping News

GLOBAL logistics provider, Agility, has won a contract to move 420 railcars from Spain to Kazakhstan for TALGO, a Madrid-based Spanish manufacturer of railway rolling stock.

The company's teams across Europe - from Spain, Finland and Kazakhstan - will handle this complex, heavy-lift project. The company had earlier succeeded in delivering the initial shipment of railcars against extremely challenging deadlines.

Under the contract, Agility will provide all logistics services starting with the collection of the railcars at factories in Spain through delivery to Talgo's works in Astana, Kazakhstan.

Alejandro Goicoechea and Jose Luis Oriol founded TALGO (Tren Articulado Ligero Goicoechea Oriol, or Goicoechea-Oriol light articulated trains) in 1942.

Agility intends to apply its specialised expertise, global network and partnerships to manage the movement of the rolling stock from origin to final destination.

"Agility has a strong presence in Russia, Ukraine, Kazakhstan and Turkmenistan," said Francesc Casamitjana, managing director of area south. "We understand fast moving economies and bring experience and know-how to industries such as engineering, energy, mining and heavy equipment supply."

Shipping Gazette - Daily Shipping News
 

The magazine SEA has been published since 1935
International business magazine JŪRA MOPE SEA has been published since 1999
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The magazine JŪRA has been published since 1935.
International business magazine JŪRA MOPE SEA has been
published since 1999.

ISSN 1392-7825

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