Foreign shipping cos. vie for Indian flag

By siliconindia   |   Monday, 08 January 2007, 18:30 IST
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MUMABI: India?s bull-run in the world market has drawn yet another player to its shores, literally. Foreign sipping companies are coming in to establish coastal trade in the country, the latest one being an AP Moller Maersk group company. Several others are also firming up their plans to come to the India shores. Svitzer Wijsmuller (an AP Moller Maersk group company) presently has four modern tug boats under Indian flag. These vessels are on a long-term contract with the Shell LNG facility at Hazira. The decision of flag for a vessel is based solely on business considerations such as costs, manning, quality of registry and commercial/cargo considerations," said Hans-Ole Madsen, managing director of Maersk India. Another major player in the shipping trade space, Amsterdam- based Seaarland Shipping Management is also following the Maersk route. Said Dr Antonio Zacchello, the MD, "We have been studying the tonnage tax scheme and the markets and if it justifies we will flag a few of our ships in India. Our trade is more concentrated on the product tanker side. With the single hull being phased out over the next two years, we feel we will have an advantage on the Indian coast. India has a triangular shape and it will not be so easily possible to move the products from one side to the other except by ship." "With several refineries coming up near various ports the coastal trade has grown in prominence as there is a need to move oil by ship which offers a better scale of economy," said Snehal J Mehta of dry cargo chartering segment major Trans Ocean Agency, also India's leading ship broking house for tankers. "With energy consumption escalating, ships will be the medium for moving such cargo from east to west and vice versa." Chevron Shipping Co already has a tie-up with Reliance for one of their refining businesses. Alexander Walker, VP of the company, said, "We have taken 5% share with the option of going up to 28%. We look after the down streamside, the refining side and the shipping side of the business." The government has of late received many applications from foreign vessel companies for the waiver of the Cabotage law so as to allow their vessels to ply between Indian ports. A record number of 670 approvals, double that of last year, were granted during the last calendar year to foreign vessels for coastal trade, pointed out a spokesperson for the director general of shipping (DGS. ?This year the approvals are for larger vessels and for longer durations,? he added. "Approvals are given to foreign vessels to ply between two or more Indian ports on the coast after exercising the first right of refusal. Such permission can extend even up to two years depending on the contract entered into." Several foreign operators moving into the offshore sector have high expectations too. Recently, Sir Michael Bibby of Bibby Line Group, who has been making frequent visits to India exploring opportunities said, "There is going to be a major growth in the Indian offshore requirements. We are world leaders in diving support vessels in the North Sea. Our new vessel will be the first vessel to help send divers to the bottom of the North Sea in about 10 years. We also have support jack ups in the Middle East. We are looking to expand with offshore licensing what is underway here in India. There are major opportunities that we are looking to use our expertise to assist Indian companies to meet the demand for this market."