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8/13/2019 SMP Expo-Post Summit Report
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Shipping, Marine & Ports Exposition 2012Post-Summit Report
June 2012
www.deloitte.com\in
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Foreward
The SMP Expo 2012 is a one of its kind international conferences organized by Chemtech Foundation
of Jasubhai Shah & Group. 8th February 2012 marked the 38th year of operation of the Chemtech
Foundation.
The theme for this years conference, Maritime Exposition A Gateway to growth, highlighted the impor-
tance of the maritime industry in the development of Indias growth. The conference was visited by several
dignitaries representing the government & the private sectors in the Ports & Shipping industry. The confer-
ence also brought forth the representation of countries such as Korea & Japan.
Deloitte India is proud to be associated with the event as the Knowledge Partner and as part of the associa-
tion, has published this Post-Conference Knowledge Paper for the Shipping Marine & Ports Exposition 2012.
This knowledge papers aims to bring forth the moments experienced and scent of knowledge sprinkled
during the conference in the SMP EXPO. This being a Post-Summit Report, it highlights the key points of
discussions & presentations addressed by the speakers at the conference.
The successive sections will take readers through day 1, 2 & 3 sessions of the conference. We hope that this
paper becomes an important way forward to work collectively and face the challenges experienced by the
shipping and port industry
Best wishes,
Hemant B. Bhattbhatt
Senior Director, Consulting
Deloitte Touche Tohmatsu India Private Limited
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Contents
Day 1 6
Inauguration of the SMP EXPO 2012 7
Session 1: Shipping a new era 11
Session 2: Future Trends in Shipping 23
Session 3: Panel Discussion: Wither Indian Shipping for the next decade 32
Day 2 34
Session 3: Indigenous Shipbuilding & Naval Construction 35
Session 4: Panel Discussion on Maritime Exposition-A Gateway to Growth 40
Day 3 44
Session 1: Regulation & Policy Environment 45
Session 2: Panel Discussion on Connectivity of Rail, Road to Sea Ports 49
Session 3: Reducing Transaction Cost 55
Contact 59
Deloitte Offices in India 60
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Day 1
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Inauguration of the SMPEXPO 2012
The inaugural session of the Conference started with the
lighting of the auspicious lamp at the hands of the Chief
Guest, Shri K. Mohandas, Secretary, Ministry of Shipping
and other dignitaries.
The conference was addressed by Mr. Jasubhai Shah,
Chairman, Chemtech Foundation
Following were the speakers for the inaugural
session:
Welcome Address: Mr. Jasu Shah
The Welcome Man as he addressed himself,
Mr. Jasubhai Shah, Chairman, Chemtech Foundation
extended a warm welcome to the guests, advisory
board members & delegates from the shipping industry
from across the globe.
Mr. Jasubhai took pride in stating that in its 38 thyear
of operations and after organizing numerous exposi-
tions and conferences for various industries, Chemtech
Foundation is respected and regarded as one of the
leading organizations striving to gather industry intel-
lectuals and players at one place and discuss various
issues, share knowledge and advancements made by the
countrys shipping industry as a whole.
While explaining reasons behind inauguration of the
SMP Expo before the Ocean Tech Expo, he praised the
industry and government alike by calling it One of the
most vibrant and friendly industry. He echoed the views
of all dignitaries that the conference can be instrumental
in bringing out a roadmap for the industry to chart out
its way forward.
Chairman Address Shipping Overview: Mr. S.
Hajara
Mr. S Hajara, the Chairman & Managing Director of
Indias largest public sector shipping company, The
Shipping Corporation of India, presented the overview
& current status of the shipping industry in India. He
praised the SMP EXPO and viewed it as having a great
significance on the annual calendar of maritime events.
To state in his words, these conferences involving
technology & knowledge transfers are important for
maritime growth.
Mr. Hajara expressed optimism for the shipping industry
despite the turbulent times it is presently going through.
In his opinion, though demand and supply for trade
Sr. Topic Speaker Designation & Company
1 Welcome Address Mr. Jasu Shah Chairman, Chemtech Foundation
2Chairman Address
Shipping OverviewMr. S. Hajara
Chairman & Managing Director - The Shipping
Corporation of India Ltd
3
Address by Global Brand
Ambassador SMP WorldExpo 2012
Capt. J. C. Anand
Chairman Emeritus, IRS and Global Brand
Ambassador, Shipping, Marine & Ports World Expo2012
4Address by International
GuestMr. Yoshida
Director for Boat Affairs Office, Shipbuilding & Ship
Machinery Division, Maritime Bureau, Ministry of
Land Infrastructure, Transport & Tourism, Japan
5Keynote Address by
International GuestMr. Oh Kong Gyun Chairman & CEO, Korean Register of Shipping
6 Address by Chief Guest Shri. K. Mohandas Secretary of Shipping, Govt. of Ind ia
7 Vote of Thanks Mr. Navpreet SinghJoint Managing Director, Dolphin Offshore
Enterprises India Ltd
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were not evenly matched, and supply far exceeded the
demand, this was a time to put all heads together & see
how to improve the situation.
Initially, high priced estates & high growth in supply of
ships were the two primary dangers for the ship owners
and shipping companies as the demand for ships
outnumbered the supply of ships. Due to this the ship
owners faced competition and the rates / tariff dropped.
According to Mr. Hajara, the global demand-supply
scenario where supply surpasses demand was witnessed
from 2008 and is going to be experienced in 2012
as well. Statistics show that in most of the cases like
Oil trade & dry bulk trade, the demand falls short of
supply by almost 1.5% to 2%. The demand supply for
container segment has however remained more or
less constant.
He added that the Indian scenario however, is moder-ately better than the global one. India is not only the
second fastest developing economy in the world but is
also turning out to be a major refining hub with the 4th
largest refining capacity and 4thlargest imports of crude
oil. In the recent past Ind ia has witnessed a growth of 8
to 9 % against which the current growth of around 7%
seems inadequate. However, the Indian industry must
see it as a healthy growth.
Containerization is yet another segment, which will
be witnessing boost due to India becoming a manu-
facturing hub. Offshore business also has tremendouspotential due to the booming EMP market and therefore
all round shipping prospects seem to be bright.
Concluding his address, Mr. Hajara said that investments
in Indian shipbuilding industry and ports are expected to
increase in the coming years owing to 100% FDI being
permitted in almost all maritime industry segments,
and the steps taken towards towards strengthening the
shipbuilding engineering and steel making industries.
Traffic at ports is expected to go up to 5 billion tonne by
2030. Indian Maritime Industry thus offers an important
opportunity to the investors / stakeholders across the
world in addition to the Indian players..
Address by Global Brand Ambassador, SMP
World Expo 2012: Capt. J.C. Anand
About Capt. Anand:
Capt. J.C. Anand rose from the ranks as a Navigating
Cadet and eventually became the President of the IRS.
Also a ship owner himself, Capt. Anand was elected as
President of Indian National Shipowners Association for
three successive terms. He was instrumental in estab-
lishment of the national ship classification society viz.,
Indian Register of Shipping. He retired as the Chairman
of IRS recently in 2010 and has been appointed as
Director in IACS Limited.
Address as the Global Brand Ambassador, SMP
World Expo 2012:
Capt. Anand praised the governments efforts to
develop the maritime industry. He substantiated by
giving example of how the government spent a fortune
for establishing the Indian shipping industry, training
of shipping personnel and developing ports and alliedsectors. Till today, around 50,000 sea farers have been
trained in India who have done India proud. In his
words, There is not one country that will not approach
us for our sea farers.
One of the commendable contributions of the Indian
Government towards the development of the maritime
industry has been to make loans (covering 90% of the
project cost) available at a minimal rate of interest of
4-6% for various segments. This has not been seen
anywhere else.
According to Capt. Anand, economic ups and downs
follow each other and these are the times to synergize
and foster team work between stakeholders & the
government. The unified growth of the maritime
industry cannot be achieved unless it is transparent,
clear and not fragmented with personal interests.
Indian maritime industry should learn from and share
experience with various foreign delegations through
conferences such as SMP Expo, especially in technolog-
ical areas where Indian has a comparative back footing.
Capt. Anand was of the opinion that the Ministry of
Shipping should work more closely with the Ministry
of Finance to be more precise and meaningful in what
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is expected of the Indian Government by the Indian
maritime fraternity. Introspection, staying united in
times of crisis, making proposals to the government
& involving them as partners will go a long way in the
development of maritime industry.
Address by Special Guest: Mr. Yoshida, Japan
Mr. Yoshida is the Director for Boat Affairs Office,
Shipbuilding & Ship Machinery Division, Maritime
Bureau, Ministry of Land Infrastructure, Transport and
Tourism, Japan. His participation in this capacity made
it the Japanese Ship Machinery Industrys first official
participation in an Indian Maritime Industry event.
A man of few words, Mr. Yoshida announced Japans
deep interest in developing Indian Maritime industry
& its resources. Though the current capacity of Indian
Shipping tonnage is quite small (only 109 gt in 2010
according to Lloyds), India is poised to grow to No. 1
in the world by the year 2030. Mr. Yoshida echoed the
thoughts of all present when he said that growth ofthe maritime industry is very important for a countrys
growth and hoped to hone relations between the
shipbuilding and ship machinery industry of two great
nations through such conferences and expositions.
Keynote Address by International Guest: Mr. Oh
Kong Gyun from Korea
About Mr Oh Kong-Gyun, Chairman and CEO,
Korean Register of Shipping
Mr. Gyun, International Guest for the SMP Expo 2012,
Chairman and CEO, Korean Register of Shipping repre-sented the Korean Shipping industry.
Mr. Oh graduated with Bachelors in Machinery from
Korean Maritime University in 1975. He obtained his
Post Graduation in Law from the same university in 1975
after which he pursued and successfully completed the
Ph.D programme in Maritime Law in 2006. Alongside
being the Chairman and CEO of the Korean Register
of Shipping, Mr. Oh is also the Vice Chairman of
International Association of Classification Societies and
Chairman of Korean Society of Marine Engineering. He
has held various management positions in his career in
the maritime industry.
Address to the Conference:
Mr. Oh expressed his sincere gratitude towards
Chemtech Foundation for inviting KRS to one of the
important events in the maritime industry of India. Mr.
Oh touched the point of witnessing the paradigm shift
of shipping from the west to east. Importance of Asia in
shipping and shipbuilding has risen significantly in the
past 2 decades. Today Asian ship owners control nearly
half of the worlds commercial fleet and produce nearly
90% of the new building ships in the world.
Asian banks are becoming more sophisticated in ship
finance and Asian countries are embarking on a voyage
where we need to clearly express a louder Asian voice to
better position ourselves in the world market.
The formation of organizations namely (i) PermanentSecretary for Asian ship owners (ASF), representing Asian
ship owner interests in Singapore, (ii) Association of
Asian Classification Societies and (iii) Consulted efforts
to form and achieve the NGO status in the International
Maritime Organization & to support the R&D and other
aspects are the three most singular achievements in this
direction.
More time and work is needed to solidify the internal
organization structures and processes. To establish
marine insurance companies under a single umbrella
would be an initiative which will ensure check andbalance in the Asian maritime sectors.
Mr. Oh talked about maritime regulations having
a profound effect on the operations of maritime &
shipping companies. The current IMO discussion about
climate change and air emissions is important. Issues like
Ballast Water Treatment and ship recycling are also vital
for Asian industry.
Mr. Oh was positive that through one coherent and
strong voice as well as representations made in the
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international maritime discussions by the Asian countries
will help in addressing all these issues and challenges.
With this he closed his speech.
Address by Chief Guest: Shri. K. Mohandas.
Secretary of Shipping, Government of India
Shri K. Mohandas Secy. of Shipping
As the Chief Guest for the conference, Shri K. Mohandas
released the Exhibitors Directory and later addressed theinaugural session of the conference.
Mr. Mohandas reiterated the fact that the maritime
industry was passing through a difficult phase as the last
2-3 decades have not been very encouraging in terms of
trade and the economic shocks have affected all walks
of life and philosophy of business. Despite the odds, the
Indian economy fares well as compared to most other
countries. Incidentally, 2011 provided achievement
of the Indian Port capacity crossing capacity of
1 billion ton.
Indias control over the global shipping industry is very
meagre of around 1% and the tonnage stands at 4%.
Mr. Mohandas talked about the proposal for a system
under the Ministrys evaluation in which it is proposed
that a certain percentage of Indian cargo should be
carried by Indian boaters only. It seems quite a feasible
and practical option to secure Indian Cargo. Another
option of starting a fund for Indian flagged ships and
development of Indian Cabotage for coastal shipping
and related infrastructure such as dedicated minor ports
is also being considered. He stressed on the need for
developing the shipbuilding industry to take control of
the global market share.
He also extended thanks to Mr. Oh from KRS for
supporting the Indian Maritime Industry when needed.
With a positive view towards the future of shipping
industry, Shri Mohandas ended his speech
This was followed by presenting mementos to the
distinguished guests.
Vote of Thanks by Mr. Navpreet Singh, Joint
Managing Director, Dolphin Offshore Enterprises
India Ltd
The closure of the inaugural session was addressed by
Mr. Navpreet Singh, Joint Managing Director, Dolphin
Offshore Enterprises.
He extended a vote of thanks to the guests and
delegates present in the conference, on behalf of the
Chemtech Foundation, for taking out time to attend
the conference. Mr. Singh added that a better under-standing of where we are today and what the future
holds for us is what is wanted of conferences. On the
behalf of Chemtech foundation, he acknowledged the
sponsors and Chemtech Team who have made contribu-
tions and efforts to make the conference successful.
He urged all present to participate in the coming
sessions to make the conference a success.
With this the session ended, followed by a tea break.
Despite the odds, the Indian economy fareswell as compared to most other countries.Incidentally, 2011 provided achievement ofthe Indian Port capacity crossing capacity of1 billion ton.
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Session 1: Shipping a new era
Session Chairman
Mr. Arun Sharma, MD & Chairman, Indian Register of
Shipping
About Mr. Arun Sharma
Mr. Arun Sharma joined the Shipping Corporation of
India as a sea going engineer, gradually moving to shore
establishment of SCI in 1978. He was Vice President
Commercial and Operations with Varun Shipping
Company between 1993 and 1999 and the President
of Great Eastern Shipping between 2000 and 2006. Mr.
Sharma joined the Indian Register of Shipping on 1st
September 2011 as MD and Chairman designate. He
has been on the board of Indian National Ship-owners
Association and South East Asia Committees of various
Classification Societies Association for the year 2012.
Mr. Sharma was the chairman of the first session on
Day 1 of the conference with the theme for the session
being Shipping a new era.
Session commencement
The session marked the beginning of the technical
discussions of the conference. Eminent personalities
were present in the forum to discuss new trends in
shipping.
Mr. Arun Sharma took charge as the session chairman
and said a few words on classification and the evolving
role of IRS & classification society as a whole.
He admitted that ship classification is a challenging
job as it has moved from merely being a Register and
Evaluator of Ships in 1760 when the class was founded
to being Manager of safety and protector of environ-
ment as it is today. Even this does not limit the respon-
sibility of the class and now there is still a fundamental
change in the role played by the class. Besides becoming
a maritime regulator it is becoming maritime innovator
to constantly come up with new ideas and technology
for overall shipping safety and efficiency improvement.
He thanked the organizers for the opportunity and with
the set of very good presentations lined up, expressed
hope that each speaker within the allotted time of 15
minutes will do justice to the presentations on topics
allotted to them. This would then be followed by theQuestion & answer session which will mark the end of
the first session.
Sr. Topic Speaker Designation & Company
1 Ballast Water Treatment Mr. Akshay Jain CEO, Vedam Design & Technical Consultancy Private
Limited
2 Energy Efficiency Design Mr. Patrick Baan Director, Ship Performance, Wartsila, S.p.A
3 Zero Emission Ship Mr. Holger Jefferies Dipl.-Ing., Naval Architect Vice President, Ship New
Building ASEA Germanischer Llyod SE
4 New Ship Designs for
next decade
Mr. Gert Christensen Senior Naval Architect & Master Mariner, Knud E.
Hansen A/S, Denmark
Session presentation topics and the speakers
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Ballast Water Treatment Retrofitting Challenge
Speaker: Mr. Akshay Jain, CEO, Vedam Design &
Technical Consultancy Private Limited
About Mr. Akshay Jain:
Mr. Akshay Jain started his career in New Building
Department of OMI Shipping and later founded Vedam
design along with his colleagues in 2007. Vedam has
been awarded as Fast Growth 25 company by All
India Network, initiated in Harvard Business School,
USA. Akshay has a B.Tech in Naval Architechture
from IIT-Madras and is a Level-1 qualified CFA. He
is also a Professional Affairs Secretary in Institution
of Naval Architects and is an active member of the
Indus Entrepreneurs, Mumbai Chapter and Institute of
Directors, Mumbai Chapter.
Presentation glimpse:
Mr. Akshay addressed the topic Ballast Water Treatment
Retrofitting Challenge as a very apt & relevant topic
in current times for shipping industry. He spoke on theBallast Water Convention, when it is expected to come
into force, treatments and types approved under the
convention for treatment of bal last water.
Following section gives an overview of the presentation
made by Mr. Jain at the SMP Expo 2012 conference.
Secretary General IMO 2003 quoted that The introduc-
tion of harmful aquatic organisms and pathogens to
new environments, including via ships ballast water, has
been identified as one of the four greatest threats to the
worlds oceans
In February 2004, International Maritime Organization
(IMO) adopted a convention for the Control &
Management of Ships ballast Water and Sediments
commonly known as Ballast Water Convention (BWC)
The objective of the BWC is to regulate the water and
reduce the risk of introduction of non-native species
from ships ballast water. It is applicable to all vessels
operating in aquatic environment designed to carry
ballast water and are entitled to fly the flag of a Party to
the convention.
The BWC regulates the discharge of ballast water either
by BW exchange under Regulation D1 or by treating
ballast water to meet the certain standards specified
under Regulation D2 depending on ships build date and
quantity of ballast carried on board.
The convention also issued Guidelines from G1 to G14.
The requirement of Ballast Water Treatment comes
from the Regulation D2. Following are some guidelines
for BWC D2 Regulations for organisms permitted in
Ballast Water during discharge
Organism category
permitted in ballast
water during discharge
Regulation
Plankton, >50 m in
minimum dimension< 10 cells / m3
Plankton, 10-50 m < 10 cells / ml
Toxicogenic Vibrio cholera
(O1 and O139)
< 1 cfu* / 100 ml or
less than 1cfu /g (wet
weight)
Escherichia coli < 250 cfu* / 100 ml
Intestinal Enterococci < 100 cfu* / 100 ml
The BWC sets standards for treatment systems to
comply with. The treatment systems must be tested and
approved in accordance with IMO guidelines G8 & G9.
There are different regulations in place for BWT in
various regions and this makes it difficult for shipping
companies to comply with all the regulations and provi-
sions. To make it easier for compliance, a uniform set of
regulations is being set which is known as Ballast Water
Convention, wherein the BW US Regulations play animportant role.
Under the BW US Regulations, USCG has proposed a
regulation to be implemented in two phases:
Phase 1 which is same as IMO-D2.
Phase 2 which is a 1000 times stringent and if it
comes into force then it will be applicable for ships
built after 2016
The BWC Entry in Force will be after 12 months after
at least 35% of the worlds merchant shipping gross
tonnage ratifies the convention. Following table shows
us the status of ratification till date:
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The BWC is not yet ratified however once any of the
major states like Gibraltar or Greece ratifies it, then it
would immediately come into force.
Implementation of BWC:
The BW Convention is dependent on Built date and
ballast capacity of the ship, as given in the table below.
Applicability of D2 Standards
Built Date 3 Categories
Before 20092009 2012
After 2012
Ship Type
(Ballast
Capacity)
2 Categories
5000 CuM
1500 5000 CuM
BWC Implementation Schedule:
Ships built in after 2012 etc. should immediately
comply with this regulation
For ships built between 2009 & 2012 less than 5000cu M capacity comply immediately and ships with
greater than 5000 cu M capacity should comply after
2016.
Vessels built in and after 2009 with Ballast capacity less
than 5,000 CuM are required to immediately comply
with the BWT D2 standards. Deadlines for the imple-
mentation of the BWT D2 standards ratification have
been missed due to the slow pace of adoption
BW Treatment Process:
There are two main processes for treatment of Ballast
Water namely (i) Filtration i.e. to filter out organisms
greater than 50 microns (ii) Disinfection i.e. using
chemicals like chlorine or means such as Ultra Violet
rays etc. to kill the microorganisms of smaller size by
physical disinfection and chemical disinfection.
Each ship being unique, has a d ifferent BWT require-
ment. Even within the same fleet it is not necessary to
have same BWT for the ships. Following are some of
the basic steps which should be followed to select the
equipment for BWT.
BWT Engineering:
Feasibility & Selection of Equipment
Installation Location
Piping Design Electrical Design
BWT Installation:
Methodology
Execution
Project Management
BWT Retrofit Challenge:
The major challenge is that around 60,000 ships are
required to be retrofitted in a short period of time.
Under the existing conditions all the existing ships must
start retrofitting by 2015. Many ship owners in US andUK have already started with the retrofitting exercise.
Though the price of equipment has drastically reduced
in the last two years, it may see a reverse trend post
the ratification as the sudden demand for retrofits will
cause:
Equipment - High Cost / High Lead time / Non
Availability
Long Class approval time
Premium Engineering hours
The presentation ended with a sample slide from a pres-
entation by Ministry of Infrastructure and Environment in
one of the Ballast Water Conventions, which said Ship
owners be prepared, yesterday was better
States % Tonnage States Already Ratified
Required: 30 Required: 35% Albania, Antigua and Barbuda, Barbados,Brazil, Canada, Cook Islands, Croatia, Egypt, France, Iran, Kenya, Kiribati, Republicof Korea, Liberia, Malaysia, Maldives, Marshall Islands, Mexico, Netherlands,Nigeria, Norway, Saint Kittsand Nevis, Sierra Leone, South Africa, Spain, Sweden,
Syrian Arab Republic, Tuvalu, Lebanon, Trinidad & TobagoRatified: 33 Ratified: 26.46%
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Energy Efficient Design by Mr. Patrick Baan
Mr. Patrick Baan, Director, Ship performance,
Wartsila Italia S.p.A
About Mr. Patrick Baan:
Mr. Baan started to work for Wartsila in the Netherlands
as Application Engineer for four stroke engines in
its marine division. In 2002, Patrik was relocated to
Wartsila office in Italy. After having been responsible
for the marine engineering team in Italy he was made
responsible for marine engineering for the ship power
division. Mid 2009 he started in his current position as
Director, Concepts and Solutions
Presentation glimpse:
Mr. Baan gave a brief introduction of Wartsila Italia and
stressed that though shipping is extremely efficient, yet
emissions from merchant shipping are going to be the
source of concern in the coming future. Statistics from
IMO show that while in 2007 and 2011 the shipping
emissions equal to 2.7% and 5% of global carbonemissions, it is poised to be around 72% of the total
carbon emissions by 2020 if no action is taken.
Energy Efficient Designs (EEDs) for ships along with
operational care are some of the steps for reducing the
carbon emission & saving energy.
He presented a typical cost structure of a merchant ship
& the factors within the design and operations which
have impact on energy consumption. These can be seen
in the diagram and the table below:
Factors impacting energy consumptions:
Design Operation
Concept, design
speed and capabilityEnvironmental conditions
Hull and
superstructure
Fleet management, logistics
and incentives
Power and propul-
sion systemsVoyage optimization
Energy management
Energy EfficiencyDesign Index
Energy Efficiency OperationalIndex
Reduction potential
50% compare to
average fleet 2009
Reduction potential 50%
compared to business as
usual 2009
Sales
Typical cost stucture of a merchant ship
Capital costs
Cargo handling costs
Bunkers
Port dues
Canal tolls and misc
Manning
Repairs and maintenance
Insurance per annum
Administration/Management
Stores and lubes
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Key highlights of actions taken by IMO on Energy
efficiency:
March 2010 - MEPC actively considers making the
technical and operational measures mandatory for all
ships irrespective of flag and ownership July 2011 - MARPOL Annex VI regulations adds a new
chapter 4 for EEDI and EEOI
EEDI entry into force in 2013 for all new ships
Entry into force by 2013, IMOX expects EEDI will
reduce CO2 from shipping 45 - 50 million tonnes
annually by 2020
Energy efficient designs are advantageous since they
reduce a lot of carbon emissions and also reduce cost
by optimizing the utilization of energy on ships. Mr.
Baan reiterated that optimizing the operations of shipsby utilizing right ships for right operations and saving
of time is also one of the key factors in addition to
adopting energy efficient ship designs. Following are
some of the points presented by Mr. Baan
The following diagram shows the energy efficiency leavers:
Fleet energy efficiency optimization
Best vessel for the jobOptimal fleet capacity usage
Voyage energy efficiency optimization
Navigation Clever routingJust in time arival
Ships energy efficiency optimization
Trim optimizationHull cleaning
Poser plant efficiency optimization Advise optimum machinery usage to match
required output needs
Machinery efficiency optimization
(re) tuning or configuration of the product foroperational conditionsUpgrade machinery to higher performance levelMaintain the original performance
A
B
C
D
E
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Energy Efficient Design Considerations
Sr. Step / consideration Results / energy savings
1
Optimization of Propeller & Hull Interaction: The acceleration of water due to propeller
action has a negative effect on resistance of the ship or appendages. This effect can
today be predicted and analyzed more accurately using computational techniques.
Redesigning the hull, appendages & propeller
together improves performance by upto 4% at
a low cost.
2
Advanced propeller blade sections: It improves the cavitation performance and frictional
resistance of a propeller blade.
As a result the propeller is more efficient;
improved propeller efficiency of up to 2%.
3Propeller tip winglets: Winglets are known from the aircraft industry. The design of
special tip shapes can now be based on computational fluid dynamic calculationsIt will improve propeller efficiency up to 4%.
4 Propeller nozzle: Installing nozzles shaped like a wing section around a propeller will
save fuel for ship speeds of up to 20 knots.
Up to 5% power savings compared to a vessel
with an open propeller.
5
Pulling thruster: Steerable thrusters with a pulling propeller can give clear power
savings. The pulling thrusters can be combined in different setups. They can be
favourably combined with a centre shaft on the centre line skeg in either a CRP or
a Wing Thruster configuration. Even a combination of both options can give great
benefits. The lower power demand arises from less appendage resistance than a
twin shaft solution and the high propulsion efficiencies of the propulsors with a clean
waterflow inflow.
The propulsion power demand at the
propellers can be reduced by up to 15% with
pulling thrusters in advanced setups
6 Acceptance of Wartsila Low Loss Concept for power generation & Constant versus
variable speed operations
Can reduce a considerable amount of energy
consumption as against the traditional models
7
Variable speed electric power generation: The system uses generating sets operating in
a variable rpm mode.
The rpm is always adjusted for maximum efficiency regardless of the system load. The
electrical system is based on DC distribution and frequency controlled consumers.
This reduces number of generating sets by
25%.
Optimized fuel consumption, saving 5-10%.
8 Reduce ballast & optimize main dimensionsCan reduce considerable amount of energy
consumption
9Ducktail waterline extension: A ducktail is a lengthening of the aft ship. It is usually 3-6
meter long. The basic idea is to lengthen the effective waterline and make the wetted
transom smaller. This has a positive effect on the resistance of the ship. In some cases
the best results are achieved when a ducktail is used together with an interceptor.
Lower propulsion power demand by 4% to
10%.
Corresponding improvement of 3-7% in total
energy consumption for a typical ferry.
10Minimizing resistance of hull openings, Waste heat recovery, use of Natural gas as
marine fuel
Can reduce considerable amount of energy
consumption as against the traditional
methods
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Mr. Baan concluded the presentation by saying that the
shipping industry has to take responsibility in reducing
its environmental footprint. Significant savings can be
achieved in sea transportation by optimizing design &
operations of ships. To ensure optimal use of assets, ship
performance management should be used by shipping
companies.
Zero Emissions Ship by Mr.Holger Jefferies
Mr. Holger Jefferies, Dipl.-Ing., Naval Architect, Vice
President, Ship New building ASEA-Germanischer
Lloyd SE
About Mr. Holger
Holger Jefferies graduated in Naval Architecture
and subsequently joined the Engineering Service of
Germanischer Lloyd in Hamburg. In 2004, he changed
to the Ship Newbuilding Division, Hull Structure Plan
Approval and took over the responsibility of the ASEAShanghai Office. He has been in charge of the ASEA
Offices of Germanischer Lloyd in Shanghai, China and
Busan, South Korea. In 2009, Mr. Holger was appointed
VP of Germanischer Lloyd in charge of Ship Newbuilding
in Asia.
Presentation glimpse:
Mr. Holger thanked the Chairman of the session Mr.
Arun Sharma for his brief and warm introduction and
then set out on the never before heard venture of
Zero Emission Ship. The coming sections outline the
important points outlined by him on this special project:
Need for the Zero Emission Ship:
With expected fleet growth to meet world transport
demand for the next decades, CO2-emissions from
shipping will increase. Even if known and available
measures are implemented, shipping will likely not meet
the discussed emission targets. At the same time, fuel
prices will continue to increase with future oil reserves
being more remote and requiring advanced technology.
Therefore, it is time to consider novel solutions to enable
future zero-emission shipping. GL Strategic Research
and Development looks at novel technologies beyond
current applications. The presentation outlines a vision
for a zero-emission container feeder vessel, possibly
operating after 2025.
Solution: Hydrogen as fuel
Fuel cell systems using Hydrogen is the answer to all
the questions as it can deliver a zero-emission power
generation. The new container feeder vessel has fuel
cells & special tanks to hold liquid Hydrogen for a typical
round trip length in Northern Europe. The vessel would
be required to stop every 10 days at an offshore stationfor bunkering.
Overview of technical aspects of the Hydrogen-
fuelled container feeder vessel
The new container feeder vessel is set to target the
Northern European trades.
It is has a full open-top 1000 TEU intake with 150
reefer slots, 700 TEU @14t
Its service speed is 15 knots
It is driven by two podded propulsors and thruster for
maneuverability and redundancy The vessel will have zero CO2, SOX, NOX and PM
emissions
The new container feeder vessel runs on liquid
Hydrogen. It converges energy into two power genera-
tion rooms, forward and aft. It has 5 MW fuel cell
systems, with 3 MW battery systems to provide peak
power, multiple type C tanks with 920 cubic mt to hold
liquid Hydrogen for a ten-day round trip. The bunkering
time is estimated at 3 hours with two bunker stations.
The fuel for the vessel namely liquid Hydrogen is
produced on-site of an offshore wind-energy park.
Liquid Hydrogen offshore production potential:
In 2020, about 3GW is assumed being delivered from
offshore wind energy parks in North Sea area and the
German Exclusive Economic Zone (EEZ). Up to 30% of
the generated power may not be put into the grid and
could be available for Hydrogen production (up to 3600
GWh/a). A 500 MW wind farm may thus produce up to
10,000 tons of liquid Hydrogen (LH2) using its surplus
power. This could serve 5 feeder vessels. An interme-
diate storage of LH2 for up to 10 days requires insulated
tanks of up to 5000 cu mts. The costs for LH2 are based
on investment for production, liquefaction and storage.
Following diagram represents various costs of offshore
generated liquid hydrogen.
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According to the above graph, it is realistic to assume
that LH2 will not be competitive compared with LNG
driven vessels. Cost is quite high but it could becomeanswer to our questions and could become commer-
cially viable too.
Installed power and liquid Hydrogen tank capacities
At design draft of 8m, the vessel will sai l with 15 knots
running on 4000 KW. Installed power of 5000 KWand an equivalent full ten-day operation, the amount
of Hydrogen needed is 920 cu mts with the fuel cell
system operating at 55% efficiency. Based on the study
At 4000 h/a production, we estimate a price of up to 7500$/t LH2. This includes production, liquefaction and storage
on-site.
Sources: GL Research, bunkerworld, apxgroup, x-rates, LBST wind hydrogen study
May 2011
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2
010$/mmB
TU
80
70
60
50
40
30
20
10
0
LNG Zeebrugge (w/o distribution)
LH2 North Sea (lower extimate)
Historic and predicted fuel prices
MGO Rotterdam (delivered)
LH2 North Sea (upper extimate)
Costs of offshore generated liquid Hydrogen
1.000 2.000 3.000 4.000 5.000
Full equivalent operating hours per year
= 1.35$
Source: Potenziale der Wind - Wasserstoff - technologie, LBST, April 2010
6.000 7.000 8.000
16.000
14.000
12.000
10.000
8.000
6.000
4.000
2.000
0
$/t
LH2
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for LNG-fuelled container feeder vessel in 2009, GLestimated that around 6% of the TEU capacity needs to
be sacrificed for the Hydrogen fuel tanks.
Investment for LH2-fuelled container feeder vessel
The LH2-fuelled container vessel has significant higher
investment costs than a traditional design of similar
size. Where an HFO fuelled vessel will require an invest-
ment of USD 22 mn, the hydrogen LH2-fuelled vesselrequired around USD 35 mn. This additional investment
is required mainly for the type-C tanks (37%), the fuel
cell systems (57%) and the battery system (6%).
Data from the 2009 LNG-fuelled feeder study and from
the GL market study on fuel cell systems were used as
principal source to estimate the costs.
MGO-fuelled LH2-fuelled
Fuel consumption 19, 38 5,56 t/day
Fuel price 2020* 40 65 $/mmBTU
1728 7800 $/t
Equiv. full op days 270 270 days/year
Annual fuel costs 9, 04 11,72 m$/year
Other costs 1,43 1,43 m$/year
Total capital required 25, 11 39, 51 m$
Lifetime 25 25 years
Interest 5,00% 5,00%
Annuity 1,7 8 2, 80 m$/year
Total costs 12, 25 15, 95 m$/year
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According to Mr. Holgers, the LH-2 fuelled containervessel will be competitive only after 2020 when the
MGO prices are expected to rise steeply due to high
demand. At that time Hydrogen Fuel can be considered
to be a lucrative fuel option. The following graph shows
chart for the same:
Mr. Holgers concluded the presentation by creating avision for a zero-emission container feeder vessel. A set
of fuel cell systems, batteries & pressurized tanks facili-
tate a ten-day round trip at 15 knots. Investment costs
for the LH2-fuelled container feeder vessel are about30% higher. The vessel will run on liquid Hydrogen
produced by offshore wind farms. The cost of offshore-
produced LH2 could match MGO-levels (compared by
energy content) after 2020 at current LH2 production
cost estimates. The LH2-fuelled vessel may become an
economically attractive alternative when MGO pricesincrease beyond 2.000 $/t.
The presentation ended.
1816
14
1210
8646
20
LH2-fuelled (lower estimate)
Annual cost for container feeder vessel
LH2-fuelled (upper estimate)MGO-fuelled
MGO historic high:1319 $/t, June 2008
500 1000 1500
$/t MGO
2000 2500
m$
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Ship Recycling by Mr. Pravin Nagerseth
Mr. Pravin Nagarseth President, Iron & Steel Scrap
& Ship Breakers Association
About Mr. Nagarseth
Mr. Pravin Nagerseth continues as President of Iron
Steel Scrap & Ship breakers Association of India since
1991. He is in ship breaking and steel scrap activity
since 1965. He represents the Association in India on
various Committees including Ferrous Scrap Committee
under Steel Ministry. He had presented papers at various
International seminars and workshops. He was elected
as the Chairman of the Federation of Ship recyclers
Association of the three countries (Bangladesh, Pakistan
and India) for the first year.
Presentation glimpse:
Mr. Nagarseth introduced the conference to some main
issues and presented some perspectives on benefits,
environment and regulations for the ship recycling
operations. In his words, Ship recycling is the sameas Ship breaking as nearly 90% of the output of ship
breaking is either recycled or re-used
Ship Recycling is a must for ship owner as the ship loses
its commercial life in about 25 years. The only eco-
friendly way to replace the ship is by recycling it in the
shipbreaking yards. Around 4% of world fleet has to
get recycled every year.
Ship recycling is an ecofriendly and time saving method
of shipbreaking. It saves four times nonrenewable
natural resources like iron ore, coal etc. and generatesalmost no solid waste.
Not only is it environment oriented, but also helps in
generating employment to workers. Production of 1
ton of steel from ship breaking provides employment
of 4 man days. It saves energy as it does not require
electric power or water in its processes. The land
required for total yard is about 100 acres only. A mere
capital investment of Rs. 150 crore can produce about
4 million tonnes of steel. Even the Supreme Court has
taken a strong stand to enforce environment friendly
mining leading to closure of number of mines. Import
of coking coal has become expensive and thus imports
of steel scrap in form of ships for demolition should
be encouraged.
The ship recycling industry supplies substantial quantity
of re-rollable and steel melting scrap for scrap based
re-rolling mill and induction and arc furnace. It is viable
where scrap based re-rolling mills are operative.
More than 90% of the ship recycling in the world is
taking place in India, Bangladesh, Pakistan, China and
Turkey
Ship recycling conversion from ship to scrap costs about
Rs. 3,000/ton. Direct rolling of re-rollable scrap saves
one process of melting and thus helps the industry to
increase the availability of such semi-finished material
India is one of the leading ship breaking countries in
the world. Although it had lost its premier position to
Bangladesh during the last few years, in the current
year it has again recaptured the premier position in ship
breaking.
Mr. Nagarseth further briefed about some national and
international regulations affecting ship breaking industryand also pointed out the unnecessary involvement
of IMO into making guidelines for areas not covered
under its jurisdiction. He also pointed out instances of
regulations set by the European Union which were not
successful in some countries.
Owing to time deficit, Mr. Nagarseth quickly summed up
his extensive presentation by talking about the future of
shipbreaking in India and once again handed over the
floor to the session chairman.
Environmentally sound and sustainable ShipRecycling by Mr. Dilip Mehrotra
Mr. Dilip Mehrotra,Deputy Chief Surveyor cum
Senior Deputy DG(Tech),Directorate General of
Shipping
About Mr. Mehrotra
Mr. Dilip holds Mechanical Degree from Regional
Enginering College, Rourkela and M.Sc. Degree in
Maritime Safety Environment Protection from World
Maritime University, Malmo, Sweden. He is currently
working as Dy. Chief Surveyor at the DG Shipping,
Mumbai. He is a qualified lead auditor for International
safety Management audits. He has presented papers at
various regional seminars as a representative from India.
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Presentation glimpse:
Mr. Dilip thanked the chairman and reflected his
memories of the MEPC convention wherein the previous
speaker Mr. Nagarseth had contributed much to the
ship recycling convention. India played a major role in
the MEPC convention preparation.
Mr. Dilip informed the delegates that the main countries
in ship recycling are Pakistan, Bangladesh, China &
Turkey. During his visit to ship recycling facilities in China
and Turkey he noticed that the Indian facilities at Alang
were at par with those in China and Turkey. The only
difference being the need for improvement in labour
conditions in Alang.
As known by many, there are various methods of ship
recycling the primary being (i) Tidal Beaching Method:
as practiced in Bangladesh, India, and Pakistan, provides
65% or more of the worlds recycling capacity in GT
terms, (ii) Non Tidal beaching Method: as practiced
in Turkey, provides about 2% of the worlds capacity,(iii) Alongside : as practiced in China, provides around
31% of the worlds capacity and (iv) Graving dock or
dry-dock: used in very limited cases.
International Maritime Organization plays an important
role in the development, promotion and regulation of
the shipping industry as a whole. A convention called
the Hong Kong Convention or HKC was passed at one
of the diplomatic conferences held at Hong Kong,
China. Mr. Dilip explained briefly the process followed by
the IMO for passing of any convention and then high-
lighted the main points of the HKC convention.
The HKC Convention is also called Convention on Safe
and Environmentally Sound Recycling of Ships and is
applicable to Ship Yards & Manufacturers, Owners /
Operators of: (i) Newbuilds > 500GT, (ii) Existing Ships
> 500GT, (iii) New installations on ships > 500GT, (iv)
Ship recycling facilities India played a major role in the
conference by contributing paper on bleaching. In the
words of Ex-Secy General IMO If India was not there,
the conference would have been a flop
Mr. Dilip explained the structure of the conven-
tion and its salient features. The overall structure of
the HKC / International Convention for the Safe and
Environmentally Sound Recycling of Ships can be seen
below:
The structure of the convention includes:
21 Articles, establishing the main legal mechanisms
25 regulations, containing technical requirements,
divided in four chapters:
General (regulations 1-3)
Requirements for ships (regulations 4-14)
Requirements for ship recycling facilities (regula-
tions 15-23)
Reporting requirements (regulations 24-25)
7 appendices, with lists of Hazardous Materials, formsfor certificates etc.
Separately, 6 non-mandatory guidelines are currently
being developed providing clarifications, interpreta-
tions, and uniform procedures for technical issues
arising from the provisions of the Convention.
Following table summarises the schedule for develop-
ment of the guidelines associated with the HKC
Preamble
Articles
"establish the main legal mechanisms"Explicit amendment procedure
Tacit amendment
procedure
Guidelines - "mainly procedures to assist the requirements"
Regulations- "contains techinical requirements"
Chapter 1 Chapter 2 Chapter 3 Chapter 4
Appendices- "contains forms for certificates etc"
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Mr. Dilip quickly summarized the session by listing out
some critiques against the convention and briefing
about Indian contribution to the recycling industry.
Coastal Shipping A growth driver for India by
Sarvesh K. Shahi
Mr. S. K. Shahi - CMD, SKS (Ship) Ltd
About Mr. ShahiMr. Sarvesh Kumar Shahi has trained in Training Ship
Rajendra as cadet officer. In 1985, he ventured into
the shipping business with one vessel as a partnership
company which went on to grow and now has more
than 30 vessels operating in India for various lighterage
operations for bulk cargo, POL products etc. He has
presented papers at various national and international
conferences. He has served as a Member of the National
Shipping Board of India. He is the Director of Indian
National Ship Owners Association.
Presentation glimpse:
There have not been many changes in the coastal
shipping regime except the various taxes added for
operations of coastal vessels and the more and more
preference for large carriers over coastal ships as the
former can offer more revenues.
The beginning of Indian Maritime industry can be traced
back to 3000 years but the modern maritime industry
began in 1840 with the establishment of Bombay
Steam Navigation Company. The other notable steamers
were the Tata Line in 1894, the Swadesh Company in
1906, the Bengal Steamship Company in 1907 andthe Scindia Steam Navigation Company in 1919. After
giving a statistics on the Indian coastal vessels and
Gross Tonnage he highlighted various positive points
of Coastal shipping including the current proportion of
cargo transport through various means of transport,
the cost savings by coastal shipping and the benefits on
environment due to reduction of emissions and other
factors found only in coastal shipping.
While he emphasized the fact that the optimal mix
of coastal shipping, inland water transport, road and
rail will provide an efficient transport infrastructure
with mobility, flexibility and cost efficiency, in his
view adequate investments have not been made for
developing coastal shipping as compared to the other
MEPC Session: MEPC 59 MEPC 60 MEPC 61 MEPC 62 MEPC 63 MEPC 64
Date (for 2012 the dates are tentative): July 2009 March 2010 Sept-Oct 2010 July 2011 March 2012 October 2012
Guidelines for the development of the Inventory of
Hazardous Materials (Inventory Guidelines)
Guidelines for safe and environmentally sound shiprecycl ing (FacilityGuidel ines)
Guidelines for the development of the ShipRecycling Plan (SRP Guidelines)
Guidelines for the authorization of ShipRecycling Facilities (Authorization Guidelines)
Guidelines for survey and certification
Guidelines for inspection of ships
AdoptedMEPC.179(59)
RevisedMEPC.197(62)
Planned adoption
AdoptedMEPC.196(62)
Planned adoption
Develop and then refer to FSI 20(end March 2012) (or FSI 21?)
Adoption?
Develop and then refer to FSI 20(end March 2012) (or FSI 21?)
Adoption?
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transport infrastructure. Lack of policy measures,
unfriendly attitude of major ports towards the coastal
ships and lack of dedicated ports / jetties for coastal
operations are the primary reasons for the lack of
domestic cargo movement.
Mr. Shahi presented the views of the coastal shipping
companies and ship owners & listed their expectations
& support required from the government. Following
section enlists a few of them:
Construction of exclusive 200 mts long coastal jetty in
each and every major port outside the EXIM area free
of custom formalities, DLB etc. facilitated with modern
equipments to handle containers & heavy cargo
Second preference to coastal vessels in berthing facili-
ties and tariff charges as per tariff guidelines
Developing financial institutions to fund coastal
shipping vessels and operations
Understanding and granting difference between the
repair charges for foreign going vessels and coastalvessels and availability of dry dock for repairs
To evolve a case for providing tax concessions both
for fuels, spares and import of vessels as already the
coastal ships pay a lot of tax.
Building a separate cadre of sea farers for coastal
shipping with qualifications different from those
for ocean going vessels as the lack of availability
of qualified officers who prefer going on foreign
vessels has caused a concern in the coastal shipping
companies
In the Union budget 2005, Tonnage Tax has not been
forwarded to coastal ships. This acts as a further disin-
centive for investment in coastal tonnage. Tonnage
Tax should also be extended to coastal fleet.
If the income tax benefits are extended to the
seafarers, manning coastal vessels, it will attract good
offices & sailors.
Industries situated within 50 kms of sea should be
mandated to use coastal vessels or at least 10% of
cargo produced by the industries
Formulation of separate coastal tariff should be done
in order to reduce the handling cost of cargo
Reduction in the survey fees, vessel survey inmaximum 2 visits by surveyor
Availability of long term funding of 25 years with 90%
LTV at the rate of 6% interest
Availability of bunker on credit and berth at arrival,
port dues not to exceed 50% of freight and a
welcome attitude by ports and port officials towards
coastal vessels will go a long way in assisting the
development of coastal shipping
Possible policy initiatives which can be given to
encourage the coastal shipping were also presented in
the conference some of which are already discussed
above and others are mentioned below:
Strict implementation of CABOTAGE Laws.
Exempt Custom Duty on import of coastal vessels,
spares & bunker fuels
Design specifications for Coastal Vessel.
To improve connectivity between ports and the road/
rail network
One Time Service Tax for coastal operations.
Increase in Marine Training Colleges with affordable
fees.
Mr. Shahi expressed his trust that the Government
appreciated the role played by coastal shipping in the
movement of cargoes and will through promotion and
development of coastal shipping ensure the smooth
flow of cargo to the hinterland of India.
Role of Shipping in LNG Transportation by Capt.
B. B. Sinha
Capt. B.B. Sinha Senior Vice President, (Specialized
Vessel Cell), The Shipping Corporation of India
About Capt. Sinha
Capt. Sinha is a Senior VP with the SCI. After passing
out of training ship Rajendra in 1976, he joined SCI
as a Cadet where he rose to the rank of Master &
commanded various types of ships. He made the
transition from sea to shore in 1994 joining SCIs head
Quarters at Mumbai as a Marine Superintendent. He
has wide & varied experience in break bulk, container,
offshore, bulk, gas & chemical tanker shipping both in
technical and commercial operations.
He was SCIs representative in USA and has represented
SCI on various trade bodies and committees. Presently
he is working as a Senior V.P. in Bulk & tanker division
of SCI looking after Bulk & specialized vessel cell. He has
been associated with LNG business of SCI since 2008.
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Presentation glimpse:
Captain Sinha gave an excellent presentation on the
technical aspects of LNG transport in a very crisp and
simple manner. The key points of the presentation
were focused on the introduction of the concept of
LNG transportation to the delegates present in the
conference.
LNG is a gas which when in liquid state is 1/600 thof the
volume of its equivalent gaseous state at atmospheric
pressure and ambient temperature. The transportation
of LNG on ships is when it is near its boiling point. Other
properties of LNG are (i) nil solubility in water (ii) high
dielectric power (iii) low conduction of electricity (iv)
Nontoxic, colorless & odorless.
There are some risks associated with LNG like the
damage caused to the living tissue if it comes in contact
with LNG, metals lose their ductility and causes brittle
fracture of many materials. Due to these risks, the
construction of LNG ships is done by using the metalsand technology suitable to LNG, which also becomes
the cause for the increase in cost.
Due to the growing demand of natural gas in India the
LNG as a fuel is going to rise.
Capt. Sinha further explained the LNG value chain and
gave details on the types of ships used for LNG transpor-
tation namely (i) Moss Type (II) Membrane type.
The journey of LNG transport dates back to 1917 where
it first began in West Virginia in USA, followed by 1959
in UK. The typical commercial characteristics of LNG
shipping industry are:
Conservatism, strong tendency to favour ship owning
companies established in LNG shipping, politics, nation-
ality of shipping company and flag state, custom built
specifications for customers who take them on 20-25
years charter and absence of pools / associations for
LNG transportation.
LNG shipping is a very capital intensive segment wherein
the standard ship costs approximately USD 220 million.
Typically the vessel is built on long term charter for
specific requirements due to which its revenues are fixed
in advance for a long period of time while the operating
expenses vary from time to time. Thus creating a
negative case for the LNG transport business.
Currently globally around 362 ships carry the role of
LNG transporters out of which almost 36% are Moss
type, 61.4% are Membrane Type and 2.6% are inde-
pendent (IHI & CSI). This fleet is projected to go up to
408 ships by the year 2014.
There are many factors driving LNG ship charter rates
such as ship price, yard availability, standard specifica-
tion, financing rate achieved based on project merits,
promoters financial standing & experience, international
financial market conditions, importing countrys rating,
ship size, type of propulsion & containment etc.
The future of LNG shipping is seen to be dynamic. New
LNG Ships are being ordered, ship owners confirming
advance bookings of LNG ship charters for long term
contracts where they carry only the residual value / scrap
Moss type Membrane type
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value risk, & 20 year old vessels becoming available for
short term trades are some of the indicators.
Capt. Sinha further explained the future developments in
the LNG shipping such as FSRUs, On-board regasification
units and Floating LNG units and their advantages and
operational specifications.
He then spoke about the foray of SCI in LNG Shipping.
SCI has entered in this segment in 2001 along by
forming a consortium with other partner firms in this
segment. SCI currently owns and manages 3 LNG
carriers from Qatar to India on long-term charter of 25
years to Petronet LNG Limited.
SCI visualizes being a major player in the field of energy
transportation by sea. It intends to participate in the
upcoming Kochi project and plans to enter into strategic
alliance in all the future LNG projects coming up on the
Indian Coast.
Capt. Sinha concluded the session by mentioning of
SCIs future plans.
Shipping Finance by Mr. Sudipan Bhaduri
Mr. Sudipan Bhaduri, Senior Advisor (Finance), SKIL
Infrastructure Ltd., Mumbai
About Sudipan Bhaduri
Prior to joining SKIL Infrastructure, Mr. Bhaduri worked
as a General Manager at State Bank of India. He has
worked in various important assignments in CorporateAccounts Group and Mid Corporate Group for 12 years
in SBI. He has a vast experience of exposure in shipping
and shipyard functioning. Mr. Bhaduri headed the
Overseas Branch of SBI for 3 years which has the only
Shipping Division of SBI.
Presentation glimpse:
Shipping finance by the virtue of being a singular topic
was one of the most sought after topic by the confer-
ence attendees. Mr. Sudipan gave a simple and lucid
explanation of the various facets of shipping finance
and various sources from which the finances could be
obtained. He also recommended the way forward for
the industry, banks and financial institutions to start
considering financing of shipping as a viable and profit-
able business venture. The gist of the presentation made
by Mr. Sudipan is outlined below.
The basic characteristics associated with the
shipping industry are:
Capital intensive facing volatility in market,
Cyclical in nature
Contains provision of international services and
thereby the involvement of currencies other than the
domestic currency.
As far as India is concerned the options available for the
Indian Shipping industry are:
1. Equity Finance: Owners equity and IPOs till now
hardly 10 shipping sector companies have been able
to access this mode and through IPOs
2. Mezzanine Financing: Private Placement Currently
no public banks provide finance through this mode.
The players open for funding the shipping companies
by this mode are private parties3. Senior Debt: Bonds, Commercial Banks, Loans, Infra
Debt funds
4. Lease: Financial and operating lease
Mr. Sudipan highlighted that the shipping companies
depend on the traditional approach of debt finance for
raising funds. Usual modes like External Commercial
Borrowings, Foreign Currency Loans, Rupee Term
Loans Letters of credit etc. are backed by collaterals,
mortgages, assignment of income and insurance and
personal guarantees.
Shipping companies look for funding where they have:
Low equity contribution and high return on
investment
Minimum collateral against loans / debts
Maximum loan period to match life of assets, balloon
and bullet terms
Cheap finance by the way of low interest rates
Fast response time to loan applications, advises on
better source and newer financial products tailored to
match their needs
Minimum documentation to avoid loss of time
The obvious mismatch between the lender-borrowers
expectations from each other is the root cause for the
high cost finance available to shipping companies.
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Some other problems associated with ship finance
include:
Lack of expertise with Indian banks to assess shipping
projects
Finance is made during boom period leading to over
supply
Financing is made without time chartered contracts
This breaks link between Demand & Supply
No system of forecasting shipping cycles in banks
appraisals. Banks generally dont give loans beyond 8
years
Shipping sector is not given infrastructure status
Prohibits long term financers and take out finance
No secondary market for institutional investors,
insurance companies and pension funds
After explaining the challenges faced by the shipping
industry for raising finance and the reasons for such
phenomenon, Mr. Sudipan laid some steps to dissolve
the differences so as to address the shipping finance in amore organized way.
Following are some of the suggested steps:
Sophisticated products Securitization, Credit
Derivatives should be innovated which can cater
specifically to shipping needs
Venture Capital funds should take interest in the prof-
itable business of shipping
Maritime joint ventures should be made between
various banks and insurance companies to facilitate
the financing of maritime projects and ship finance
Adoption of Mezzanine Finance by the institutions andshipping companies
Shipping Sector be accorded infrastructure status
Develop Secondary Market for such debt instruments
and loans so that it attracts the private players due to
easier liquidity
Banks should go for more syndication of loans to
reduce risk
Mr. Sudipan closed the session with a positive outlook
towards shipping finance.
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Session 3: Panel Discussion:Wither Indian Shipping for the
next decadeSession Chairman:
Mr. A. Banerjee, Chief Surveyor, Directorate General
of Shipping
The panel discussion was proposed for the topic Wither
Indian Shipping for the Next Decade. The panelists
included Mr. A. Banerjee, Mr. Dilip Mehrotra, Mr I.N.
Bose, Mr. Soli Engineer & Mr. J.N. Das. The panelists
presented their views in a short span of 2-3 minutes
each and then the floor was opened to questions and
answers.
The observations of Retd. Commander Pirman, Officer
from Navy, and currently the HOD, Naval Architecture
at University at Chennai on the lack of R&D efforts
in shipping industry and absence of any government
body or NGO for monitoring the efforts made in these
directions was commended by the session Chairman
Mr. Banerjee. The Commander was invited to the D.G.
Shipping to work on assignments & volunteer the efforts
to track them.
Introduction to the panelists:
Mr. A. Banerjee: Chief Surveyor, Directorate General
of Shipping
Mr. Banerjee is an Extra First Class in Engineering
Certificate of competency (Motors) and M.Sc from
Malamo, Sweden. Mr. Banerjee has been in Directorate
General of Shipping since 2009. He has been associated
with IMO for many projects.
Mr. Dilip Mehrotra: Deputy Chief Surveyor cum
Senior Deputy DG (Tech), Directorate General of
Shipping
Mr. Dilip holds Mechanical Degree from Regional
Enginering College, Rourkela and M.Sc. Degree in
Maritime Safety Environment Protection from World
Maritime University, Malmo, Sweden. He is currently
working as Dy. Chief Surveyor at the DG Shipping,
Mumbai. He is a qualified lead auditor for International
safety Management audits. He has presented papers at
various regional seminars as a representative from India.
Mr. J.N. Das, Director, The Shipping Corporation of
India Limited
Jnanendra Nath Das is Former Member of the Board
of Directors at SCI-Forbes Ltd. and was on the Board
of Directors of the Standard Steamship Owners and
Indemnity Association (Bermuda) Ltd. Mr. Das joined SCI
after graduating from DMET. He worked as Technical
Manager & Assistant General Manager in Bulk Carrier
& Tanker Division. Thereafter, grew up the hierarchy
across the organization and was appointed as General
Manager in Bulk Carrier (Tech) Dept. and later General
Manager (SVC) consisting of LPG, LNG and Chemical
Tankers
Mr. Soli Engineer, Executive Director, Great Offshore
Limited
Mr. Soli Engineer has four decades of experience in the
shipping and offshore sectors. He is associated with the
offshore sector, ever since the time of conceptualization
of the offshore oil field services business in 1978, under
the auspices of The Great Eastern Shipping Co. Ltd.
In 2009 was appointed as Executive Director at Great
Offshore Limited
Mr. Indra Nath Bose, GM (Quality, Safety & Training),
the Great Eastern Shipping Co. Ltd.
Mr. I.N. Bose is a member of the governing board and
Chairman of the Academic Council of Great Eastern
Institute of Maritime Studies. He has been representing
India at Marine Environment Protection Committee
(MEPC) and Diplomatic Conferences of International
Maritime Organization for more than a decade. He
has been closely associated with the development of
measures for reduction of Green House Gas from shipsat national and international levels as INSA representa-
tive. He was a member of the Market Based Measures
Expert Group of IMO
Discussion:
The format of the discussion was that each of the
panelists would speak on the topic one by one and
would be supplemented by a quick question answer
session. During the discussions a variety of interesting
facts and experiences were shared by the experts.
The suggestions and discussions ranged from competi-
tive pricing of global ships, high bunker fuel costs, IMO
coming down with regulations on sulfur w.r.t. fuels, the
challenges for containers trade in India due to non-
operations of big size ships having container capacity of
18000 TEUs along the Indian Ports.
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The debate about Cabotage being good or bad was
still carried on in this session and Mr. J. N. Das voiced
his support to the implementation of Cabotage Policy.
According to him if Cabotage was that bad a rule then
why would the USA, UK, China still persist with it. The
Cabotage is a tool by which a country can secure its
trade & cargo for its own shipping industry and prevent
it from being carried away by foreign flagged ships.Insurance and re-insurance business needs to flourish
in order to make Indian Shipping competitive and to
acquire financing at competitive costs.
The shipyards that have now focused on Shipbuilding
should shift their focus on ship repairs too. Already
excess supply of ships causes problems due to which the
new ships business may take a turn. Ship repairs on the
other hand are required for every existing and running
ship and after almost every voyage. It has much larger
potential than other areas like shipbuilding.
Government should take interest in advancing soft
term loans to shipping companies in India. It should
follow the model of DBS bank in Shanghai, China which
promoted the shipping operations.
Competitive pricing of charters is also affected by the
differences in safe manning levels of Indian and Foreign
ships. While the foreign ships have safe manning level
of 7 persons, the Indian ships have manning level of
14 persons which increases the cost substantially. This
should be reconsidered by the Ministry and the industry.
A need for building LNG Bunker fuel terminals all over
the coast of India may be witnessed owning to thedirection of the choice of fuel. Managing costs of opera-
tions of ships is an important challenge faced by the
shipping industry and the plethora of regulations lined
up will only add to the costs of operations. Regulations
for low sulfur fuel, ballast water treatment, bunkering
operations, electronic chart display etc. will have a
profound impact on the way shipping industry
operates today.
Thus the panel discussions ended with a note on the
way forward and the topics of concern for the shipping
industry. It listed out various issues to be considered by
various sections of the industry to make Indian shipping
successful in the coming turbulent times.
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Day 2
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Session 3: IndigenousShipbuilding & Naval
ConstructionDevelopments in Design of Dry Docks for Ship
Repair & Shipbuilding
Speaker: Gary Courtnadge - Director, Shipyard
Advisory Group, Royal Haskoning, UK
About Mr. Gary Courtnadge:
Gary Courtnadge is a chartered civil engineer with over
30 years of experience in civil and structural engineering,
particularly in managing the shipyard procurement
and construction process for clients. He has worked
extensively on maritime projects throughout the UK and
overseas. He has worked extensively on naval base and
dockyard facilities, working on numerous projects for
the UK Ministry of Defence.
Presentation glimpse:
The presentation focused on advances in design which
are now being applied in new and existing yards to
reduce capital cost and improve efficiency. Examples
of proven innovations were also provided. Summary of
topics discussed are listed as follows:
Dry Dock Construction
Mr. Courtnadge explained that the size and depth of
dry docks is continually increasing. The typical length is
400m; widths are 66m, 80m and 125m; and depth is up
to 16m. The cost of a dry dock depends on its size, site
conditions, form of construction and extent of marine
construction. There are 3 types of graving docks:
Gravity Docks
Anchored Docks
Drained Docks
Dock floors are bearing either on the ground or on piles.
Dock walls are constructed using:
steel sheet piling
mass concrete
reinforced concrete constructed in the dry
concrete caissons placed in the wet
diaphragm wall construction
There are three different types of dry dock
constructions to counteract hydrostatic uplift:
Gravity docks
Designed using weight of floor/walls, traditionally
used for small docks or naval docks comprising
altars
High cost due to large concrete quantities
Anchored docks
Dock floor held down by ground anchors or
tension piles
Can be costly
Anchors and piles have been known to fail due to
corrosion
Drained docks
Where there is low ground permeability, use
sub-floor drainage system, usually with cut-offs
Porous concrete layer and collector drains,
connected to pump house
Pumps remove seepage water to relieve uplift
pressure
Pressure relief system also installed
Dock gates
Dock gates are designed to suit the purpose and size
of the dock. Gates are traditionally designed to span
or arch across dock entrances. But wide docks make
spanning difficult. For very wide entrances, gates are
designed to stand by weight, cantilever or propping.
Types of dock gates
Floating
Caisson gates
Hinged
Mitre gates
Flap gates
Sliding
Dock and Lock Entrances Lift Out
Modular design
Several developments and innovations in Dry Dock
Design were discussed in areas such as:
Gravity Dock Gate
Pump Syphonic Discharge
Use Of Submersible Pumps For Dock Dewatering
Contaminated Water Removal
Dock Flooding Valves
Dock Entrance Silt Jetting
Removable Dock Blocks
Open Trunnion Hinge for Flap Gates
Gate Meeting Face Material
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Implications of the NATO Naval Ship Code
Speaker: R Simpson, Lloyds Register
Presentation glimpse:
Mr. Simpson began the presentation by describing
the limitations of Commercial Ship Safety Regulation
for Naval vessels and the justification for having a
Naval Specific Safety Regulation. The history of the
ANEP 77 NATO Naval Ship Code was discussed. The
speaker elaborated upon the challenges of Goal Based
Safety Regulation- such as the various perspectives
to be considered even for defining the word Safe.
He talked about how prescriptive standards are often
seen as constraining innovation. The Vee Model of
Naval procurement was discussed followed by role
and function of naval authorities and the challenges
faced by stakeholders. The differences in Contracting
Arrangements between Commercial practice and Naval
practice were brought to light.
The key points brought out in the presentation are asfollows:
The Naval Ship Code provides a mechanism for navies
to demonstrate: effective safety management system,
compliance (AFARP) with international conventions
(safety and environmental); and preserves a navys
exemption to deliver military effect.
Shipbuilders/ ship repairers and supply chain interme-
diaries need to understand the role of classification in
commercial shipping.
Naval authorities have significant responsibilities to
facilitate the adoption of the Code. Adoption ofcommercial standards in naval operations requires
deepening and widening of internal expertise. The
role of standards is also to act as repository of lessons
learned.
Ship repair Industry Challenges
Speaker: Mangala P. B. Yapa, Managing Director/
Chief Executive Officer, Colombo Dockyard PLC.
Presentation glimpse:
Mr. Yapa discussed the characteristics of the ship repair
industry, key criteria which define a good ship yardand the key challenges faced by the industry. They are
elaborated as under:
The characteristics of the ship repair industry are:
Capital Intensive
Large Infrastructure is needed for dry/floating
docks, cranes, workshops, equipment for large
volumes of work.
Labour Intensive since wide range of competen-
cies are needed along with high-level of tacit
knowledge
Technology which needs consistent updating &
ability to manage in a wide-spectrum
Heightened demand for logistics
Systemic approach - QMS, HES
Waste management - IMO, SOLAS and local
regulations
High working capital requirements
Cyclical in nature
The criteria of a Good Shipyard are:
Zero tolerance to Safety and Quality Deficiencies
Commitment to consistent Productivity Improvement Transforming to a Learning and Knowledge
Organisation
Demonstrate Professionalism and avoid corruption
Give Value for Money
Long-term Partnership vis a vis short-term price gains
The key challenges faced by the ship repair industry are:
How to adjust during Boom and Dips is the biggest
challenge!
CAPEX for expansion & ROI is a huge challenge
Labour How to adjust?
Subcontracting? How about Quality, HES? Permanent employees where to get trained
employees?
How to attract young blood to the industry
Salaries: cannot be adjusted according to volume!
Unfair practices
Poaching of performing employees
Unethical behaviours of people with responsibility
Price wars, Undercutting
Collusion between Yards and Responsible Officers
at the other end
Risk Management
High value assets of customers are being repaired &
any damage would result in heavy compensation.
Complex ships: performance needs to be
guaranteed.
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Heavy OPEX Requirements
Credit and Debt Management
Claims Management
Need to work/understand a wide range of customers-
from very large fleet owners to small timers
Developments in Naval Ship Construction
Company: Cmde. K. Subramaniam Chairman &
MD, Cochin Shipyard Limited (CSL).
Presentation glimpse:
The existing defense ship yards in India are MDL, GRSE,
GSL and HSL. However the global recession in commer-
cial shipping has now forced all the commercial yards
(like CSL, ABG, Bharti, L&T, Pipavav, etc.) to also look
at Defense orders. Cmde. Subramaniams presentation
tracked the Naval ship construction processes at CSL in
the following three phases:
a) CSL Pre 2000 Phase
From Inception till early 2000 CSL was only building
large merchant vessels (Bulk Carriers/ Tankers) - only 1 or
2 vessels per type. The Building cycle was long, marked
with low efficiency and high costs, as compared to
competitors in Japan/ Korea.
The major factors responsible for the delay were:
Design with Generic equipment
Procurement not focused/ more procedural
Detailed design/ engineering which can effectively
start only after procurement finalization Planning which goes out of control because of
design/ equipment delays/ lack of equipment info
b) CSL Transition Phase
Main equipment was finalized concurrent with
Shipbuilding contracts. CSL targeted medium size vessels
and hence was able to produce larger numbers of ships.
The detailed engineering time reduced drastically due to
the following:
Packaging of equipment from specialist vendors
Outsourcing part detailed engineering
Availability of binding data early in the project
Equipment procurement focused on project time
frames
Thus planning could be done much better and it
resulted in all round feel good factor which also
improved morale in the construction phase. CSL
delivered a 6 Vessel series ahead of schedule thus
earning a bonus. Howeve