Paper on Paper on

1
Paper on Paper on Ease of doing business
in Dry Bulk Sector- Highlight current issues and
suggest possible solutions Presented by Mr. M
K Palanivel President All India Bulk Division
SAMSARA GROUP , INDIA

• At
• 3rd Edition of Cargo Scope International
  Conference Exhibition 2015
• On 10th and 11th July, 2015
• At Chennai Trade Center , Chennai
• Chennai
• 11.07.2015

2
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Culture , Ethics and Ethos of the country
  naturally reflects on individuals and
  institutions
• Yatha Raja thatha Praja
• As the Ruler so the ruled
• Ports and other authorities also reflect
  Indias current state of affairs
• Port and Port Users - Two Players involved both
  contribute to present status
• Port Services Providers Terminals / Ports
• Port Users
• a) Trade (Cargo Trade consisting Shippers
  Consignees)
• b) Service Providers
• Steamer Agents, Stevedores , Shore Cargo
  Handlers, Transporters, Shore
  Equipment suppliers ( Grabs, Cranes etc ), CHAs,
  Surveyors, Bunker Suppliers,
  Ship Chandlers , Ship Repair
  Workshops and others
• For present status of difficulties experienced in
  Ports both the Ports and Port Users have to be
  equally responsible for .
• Both to blame Collision ( or Collusion !)

3
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Corruption
• As in Every transaction there are two parties in
  this also
• Bribe Giver
• Bribe Taker
• It goes in the name of Speed Money Energy
  Money , Nuisance Money Paper Weight etc
• Starting from small issue of Port Pass issue for
  visitors of Service Providers to other port
  services, corruption is all pervasive
• Many times one party or the other is on the
  wrong track
• Everyone is in a hurry and wants to overtake
  competitor and show his
• efficiency to get more business
• Why blame Port alone? Political and Bureaucratic
  system and ethos has to change mindset has to
  change on both sides
• Port Users should agree to bite the bullet to
  eradicate corruption

4
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Lack of Transparency main reason for Corruption
  
• Starting from Berth allotment there is a
  lack of transparency in some of the port
• services provided. Favouritism is seen in
  many cases
• Conflict of interests, in various activities of
  Port Promoters which kills competition and force
  users perforce use these services / supplies
• Private Ports and their group companies
  has non-port activities
• Coal and other commodity trading,
• Stevedoring ,
• Transport / Trucking ,
• CHA Steamer Agency
• Grab, Cranes and other Shore equipment
  supplies
• and other Port users services which
  normally not directly done by major/
  government ports
• This desire to make some extra income by
  private ports compromise their
• neutrality as Port Services provider
  which is main job / function / purpose

5
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Port Tariff related issues
• Increases frequent and high and some times
  unwarranted ( some ports levy charges for crew
  change also !! )
• As it is the Indian Port costs are one of the
  highest in the world
• Atleast when you consider the productivity of
  ports and Turnround of vessels there is a case
  for holding the tariff for longer periods if not
  reduce it!
• The Private Ports and PPP berths / Terminals
  on BOT / BOOT/BOOST etc basis usually
  justify their higher costs and consequent high
  Tariff by citing high cost of present
  investment on port facilities and newer
  technology which their equipment provide as
  compared with major / government ports old
  equipment which have older technology and
  virtually zero book value
• Some times adequate advance notices not
  given and also tariff increases come in piece
  meal
• Restrictive Tariff to wean away cargo from
  neighbouring ports to the detriment of ship and
  cargo interests

6
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Lack of Concessions and Incentives and port
  facilities for nascent Coastal Trade
• Usually Major / Government Port gives 40
  discount for coastal vessels on foreign going
  vessel tariff
• Some private ports give only a token / small
  discount only for coastal vessels
• Again normally coastal tariff is quoted in
  Indian Rupees to protect trade / Shipping lines
  from vagaries of exchange rate variations .
  Still some private Ports give coastal tariff
  in US Dollars
• The above constraints deter the development
  of Bulk Cargo Feedering from deep draft ports
  to smaller ports which are nearer to end users
• Separate Terminals for coastal cargo is
  available in only a few Indian Ports e.g.
  Paradip , Ennore and a few others have separate
  berths
• All Ports dont give priority berthing for
  coastal cargo / ships

7
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Solutions
• Port Regulatory Authority and other measures
• Sooner this Regulator is in place with sufficient
  punitive powers and minimum procedures the better
• Face to face transactions and meetings should be
  eliminated to control corruption partially at
  least
• Electronic Data Interchange ( EDI ) for most of
  the port facilities allocations Paperless
  transactions . This will also expedite final Port
  Bills which are delayed now, by a few ports
• Websites of ports should be very transparent
  giving all data up-to-date
• Daily meetings with all concerned interests to
  decide on Berth , Cargo Stack Yard Space, Cranes
  , Equipment and other allocations for various
  cargo interests / ship agents

8
Paper on Ease of doing business in Dry Bulk
Sector- Highlight current issues and suggest
possible solutions

• Control oligopoly in private ports ownerships
• Proper Berth and other port facilities
  utilisation commensurate with demand. Future
  expansion should be preceded by cargo demand
  estimates in hinterland
• Demand for EXIM of Commodities , particularly dry
  bulk commodities like Iron Ore, Coal ,
  Fertilisers / their raw materials etc are closely
  linked to Government policies. Therefore the port
  facilities should be planned with future demand
  forecasts for bulk cargo in different regions
• Both Authorities and users should be accountable
  for their conduct and business dealings with
  efficiency and integrity as top priority. The
  latter also should change with times

9
SAMSARA GROUP , INDIA

• THANK
• YOU ALL