CHAPTER – I

Introduction
1.1.1 Ministry of Shipping was formed in 2009 by bifurcating the erstwhile Ministry
of Shipping, Road Transport and Highways into two independent ministries.

1.1.2 Maritime Transport is a critical infrastructure for the economic development

of a country. It influences the pace, structure and pattern of development.
The Ministry of Shipping encompasses within its fold shipping and port
sectors which also include shipbuilding and ship repair, major ports and
inland water transport. The Ministry has been entrusted with the
responsibility to formulate policies and programmes on these sectors and
their implementation.

1.1.3 Comprehensive policy package is necessary to address the diverse issues

facing the maritime transport sector. The capacity of the ports in terms of
their berths and cargo handling equipment needs to keep pace with the
growing requirements of the overseas trade. The shipping industry must be
enabled to carry higher shares of the sea-borne trade in indigenous bottoms.

1.1.4 Historically, investments in the transport sector, particularly in the ports,

have been made by the State, mainly because of the large resources
required, long gestation period, uncertain returns and a number of
externalities, associated with this infrastructure sector. However, the
growing resource requirements and the concern for managerial efficiency
and consumer responsiveness have led to the active involvement of the
private sector in infrastructure services in recent times. To encourage private
sector participation, Ministry of Shipping has laid down comprehensive policy
guidelines for the private sector participation in the Major ports.

1.2 Functions

1.2.1 The subjects allocated to the Ministry of Shipping are listed at Annexure - I.

1
1.3 Organisational set-up

1.3.1 Thiru G.K.Vasan is the Union Minister of Shipping.

1.3.2 Shri Mukul Roy is the Minister of State for Shipping.

1.3.3 Secretary (Shipping) is assisted by Joint Secretary (Shipping), Joint Secretary

(Ports), Chief Controller of Chartering, Development Adviser (Ports), officers
at the level of Directors, Deputy Secretaries, Under Secretaries and other
Secretariat/ Technical Officers.

1.3.4 The Finance Wing is headed by Additional Secretary & Financial Adviser who
assists in formulating and processing of all policies and other proposals
having financial implications.

1.3.5 The Accounts side is headed by a Chief Controller of Accounts who is inter-
alia responsible for accounting, payment, budget, internal audit and cash
management.

1.3.6 Adviser (Transport Research) renders necessary data support to various

Wings of the Ministry for policy planning, transport coordination, economic
& statistical analysis on various modes of transport with which the Ministry is
concerned.

1.3.7 The Finance Wing, Accounts Wing and Transport Research Wing are common
with the Ministry of Road Transport & Highways.

1.3.8 The Development Adviser (Ports) renders technical advice on matters

relating to the development of Major Port Projects, Andaman &
Lakshadweep Harbour Works (ALHW) and the Dredging Corporation of India.
He is also associated with processing technical and administrative matters
related to the International Navigation Association – Permanent
International Association for Navigational Congress (INA-PIANC) of which
India is a member country. DA(Ports) also coordinates the Research
Committee works of the Ministry in respect of Ports, Shipping and IWT
sector.
2
1.3.9 The following subordinate / attached offices, autonomous organisations,
societies/ associations and public sector undertakings are functioning under
the administrative control of the Ministry of Shipping:

(A) Subordinate/Attached offices

• Directorate General of Shipping,

Mumbai (including Minor Ports
Survey Organisation, Mumbai).
• Andaman & Lakshadweep Harbour
Works, Port Blair.
• Directorate General of Lighthouses
& Lightships, NOIDA
(B) Autonomous bodies

• Port Trusts at Kolkata, Kochi (Cochin), Kandla, Chennai, Mormugao,

Mumbai, Nhava Sheva (Jawaharlal Nehru Port), Paradip, V.O.
Chidambaranar(earlier named as Tuticorin), Visakhapatnam and New
Mangalore and Port Blair Port rust.
• Dock Labour Boards at Kolkata and Visakhapatnam.
• Inland Waterways Authority of India, Noida.
• Tariff Authority for Major Ports, Mumbai.
• Seamen’s Provident Fund Organisation, Mumbai.
• Indian Maritime University, Chennai.
(C) Societies /Associations

• National Ship Design and Research Centre, Visakhapatnam.

• Seafarers Welfare Fund Society, Mumbai.
• Indian Ports Association, New Delhi.
3
(D) Public Sector Undertakings

• Shipping Corporation of India, Mumbai

• Cochin Shipyard Limited, Kochi.
• Central Inland Water Transport Corporation Limited, Kolkata.
• Dredging Corporation of India Limited, Visakhapatnam.
• Hooghly Dock & Port Engineers Limited, Kolkata.
• Ennore Port Limited, Ennore.
• Sethusamudram Corporation Limited, Chennai

1.3.10 The Organisation Chart of the Ministry of Shipping is given at Annexure - II.

4
 CHAPTER-II

YEAR AT A GLANCE

Background:

2.1.1 The Maritime Sector in India comprises of Ports, Shipping, Shipbuilding and
Shiprepair and Inland Water Transport Systems. India has 13 Major ports and about
187 minor ports. Indian Shipping Industry, has over the years played a crucial role
in the transport sector of India’s economy. Approximately 90% of the country’s
trade by volume and 70% by value is moved through Maritime Transport.
Therefore, shipping and ocean resources, ship design and construction, ports and
harbours, issues relating to human resource development, finance, ancillaries and
new technologies need to be developed in the light of the emerging scenario.
Shipping continues to remain unchallenged as the world’s most efficient means of
transportation and we need to do all we can to recognize, reward and promote

quality within the industry.

Geographical features:

2.1.2 India has a long coastline of about 7517 km, spread on the western and
eastern shelves of the mainland and also along the Islands. It is an important
natural resource for the country’s trade.

2.1.3 Annual Plan 2010-11

Under the Annual Plan for 2010-11, an outlay of Rs. 2212.63 crore has been
approved for the Port Sector. This includes a Gross Budgetary Support for the 13
Major Ports to the tune of Rs. 144.97 crore and IEBR of Rs. 1372.15 crore. An
amount of Rs. 595.51 crore has been earmarked for Dredging Corporation of India
(DCI), Andaman Lakshadweep Harbour Works (ALHW), R&D Studies,
Sethusamudram Ship Channel Project (SSCP), Post-Tsunami Works, Survey Vessels,
Web Based EDI- Port Community System, IT for Ministry of Shipping and Studies on
Non-Major Ports with a Gross Budgetary Support of Rs. 143.51 crore.

5
 MAJOR INITIATIVES AND ACHIEVEMENTS DURING 2010-11

2.1.4 Maritime Agenda

India is a major maritime nation by virtue of its long cost

line. Maritime Sector plays vital role in the development of the
country. About 90% by volume and 70% by value of the
country‟s international trade is carried out through maritime
transport. As such Port and Shipping Sectors are required to
gear up themselves by modernizing their infrastructure and keep
pace with the global challenges to be at par with international
standards. With this end view the Ministry of Shipping has
released Maritime Agenda for the decade for 2010-2020 in
January, 2011 to create, build and sustained the maritime
infrastructural needs of the country for the next decade. The
Agenda aims to navigate and steer the Indian Maritime Sector
realistically into the premium maritime nation of the world

2.1.5 Sethusamudram Ship Channel Project

Sethusamudram Ship Channel Project, which is being implemented

through the Special Purpose Vehicle namely, Sethusamudram Corporation
Limited, envisages dredging of a ship channel in the shallow portion of sea
to connect the Gulf of Mannar and Bay of Bengal through Palk Bay so that
the ships, depending on draught required, moving between east and west
coasts of India could have a continuous navigable sea route around the
peninsula within India’s own territorial waters.

The project was inaugurated on 2nd July, 2005 by the Prime Minister. The
entire dredging work for the project was awarded to the Dredging
Corporation of India(DCI), on nomination basis. The dredging work in the
Channel has been suspended.

6
A court case in respect of Sethusamudram Ship Channel Project is being
heard in Hon’ble Supreme Court of India on the observation made by the
Hon’ble Court about an alternative alignment. The Govt. constituted a Expert
Committee to consider the suggested re-alignment of the Channel. The
Committee would examine the feasibility of the alternative alignment
between Dhanushkodi and Lands end on Rameshwaram Island. Keeping in
view the technical expert cost benefit analysis, social and cultural impact,
environmental impact, Law and Order aspect and any other related matters.
The Committee was constituted under Mr. R. K. Pachauri, Director General,
The Energy and Resources Institute vide Cabinet Secretariat order dated
29th July, 2008. Till date five meetings of the Committee have taken place. In
the last meeting held on 10.11.2009, the Committee finalized the Terms of
Reference of the proposed Environment Impact Assessment

(EIA) of the alternative alignment which is being undertaken by the National

Institute of Oceanography (NIO). The EIA is presently being done by NIO.

2.1.6 Bipartite Wage Negotiation Committee and Pay Revision Committees

Performance.

The recommendation of the PRC on revision of pay and pension of officers of

Major Port Trusts were accepted and the same were implemented in August,
2010 and February, 2011 respectively.

2.1.7 International Cooperation:

A Memorandum of Understanding (MOU) was signed on September 24, 1997

between the then Minister for Shipping, Government of India, and the Minister of
Public Works, Flanders, Belgium to cooperate in various fields relating to maritime
transport and port development. In order to implement the MoU, a Letter of
Intent (LOI) was signed on October 25, 2002 and subsequently on October 5,
2005. This Letter of Intent has been renewed on 6th October, 2009 for the period
2010-12 between the Ministry of Shipping, Government of India and Ministry of

7
 Mobility and Public Works, Government of Flanders. As per the renewed LOI for
2010-12, both Governments will mutually promote each other’s ports through
inclusion of promotion material in port exhibitions and continuous exchange of
information/documents/ material on Indian and Flemish ports. Flanders, in
cooperation with APEC, will organize tailor made short training courses for Indian
Officers in addition to other short training courses. On port related issues,
Flanders will provide a maximum of twelve scholarships per year for Indian staff
for standard short training courses/seminars in APEC. Flanders will also provide
advice on the projects of Major Ports of India and subordinate organizations
under the administrative control of Ministry of Shipping, Government of India.

2.1.8 Capacity of Indian Ports crosses 1 Billion MT

The capacity of Indian Ports including major and non major ports has crossed
1 Billion Tonne per annum on 28,01.2011. This is a major land mark for the
Indian Port Sector

2.2 PORT SECTOR ACHIEVEMENTS

2.2.1 Traffic, Capacity and Performance

(A) Traffic

The Major Ports handled a total traffic of 561.10 million tonnes

during the financial year 2009-10 and 416.60 million tonnes up to December
2010 in the financial year 2010-11.

(B) Capacity

The aggregate capacity of Major Ports, as on 31.3.2010, was 616.73

million tonnes per annum (MTPA). The Major Ports, therefore, continued to
maintain a favourable capacity cargo equation during the year.

8
(C) Performance

The average output per ship per day for all Major Ports taken together
has improved from 4495 tonnes in 2009 (April-Dec) to 10156 tonnes in 2010
(April-Dec). Average turnaround time has marginally increased from 4.54
days to 4.70 days, however, average turn around time on port account has
improved from 2.69 to 2.64 days over the same period.

2.2.2 Capacity Addition in Major Ports

It has been the endeavor of the Government to consistently enhance the cargo
handling capacity of the Major Ports keeping in view the projected traffic for the
country. The aggregate capacity in major ports as on 31.3.2010 was 616.73 MTPA.
Thus, the favorable capacity – traffic equation continued during the year.

2.2.3 Major Development Projects

International Container Trans-shipment Terminal (ICTT) at

Vallarpadam

The International Container Transhipment Terminal (ICTT), Vallarpadam

India’s first dedicated International Container Transhipment Terminal developed by
Cochin Port Trust and M/s India Gateway Terminal Pvt. Ltd (IGT), a subsidiary of
M/s Dubai Port World (DPW) through a Public Private Partnership on Build Operate
and Transfer (BOT) basis was dedicated to the nation by the Hon’ble Prime Minister
of India on 11th February, 2011. This is a major milestone achieved in maritime
sector in the development of the country’s logistics infrastructure. The ICTT has
been developed with facilities for handling mother container ships of 8000 plus
TEUs capacities and is a State-of-the-art terminal with modern cargo handling
equipments and related super-structures to have an annual throughput of 3 million
TEUs. The BOT operator has complete the construction of phase-1 of the Terminal
with an investment of approximately Rs. 1600 crores. The first phase has a quay
length of 600 mtrs. With a handling capacity of 1 million TEUs. This will be
increased to 1800 mtrs in the final phase.

9
 The supporting infrastructure of the ICTT project include a 17.2 KM long link route
connecting Kalamassery to Vallarpadam for efficient road connectivity constructed
by the National Highways Authority of India (NHAI), the rail connectivity with the
route length 8.86 KM from Edapally to Vallarpadam implemented by M/s. Rail
Vikas Nigam Ltd (RVNL) with grant-in-aid assistance from Government of India.
Capital Dredging of navigational channel and basin carried out by Cochin Port Trust
to enable handling container ships afloat with grant in aid assistance from
Government of India.

With the commissioning of this project, India will be filling the existing gap by
entering the global hub of port arena with its own world class facilities providing

interface for the large vessels and the feeders. This

project reduces our dependence on foreign ports for transhipment of India’s export-
import containers. The economies of transhipment which had been causing
competitive disadvantages for Indian export will become available to our EXIM
trade. Indian export sector will now be in a position to access mainline container
vessels calling at one of the most geographically well positioned port of India.
The terminal also opens up immense potential for the development of allied
industries like Container Freight Stations, Inland Container Depots, logistics and
warehouse centres, etc., which are expected to generate substantial employment
opportunities in the State of Kerala. It is expected that the full fledged operation of
the terminal will transform Cochin into a major economic hub in the region.

2.2.4 Private Sector Participation in Major Ports

In the current year 2010-11, 6 PPP projects have been awarded at an estimated
cost of Rs. 2693.08 crore and capacity of 33 MT. These include a Container
Terminal at Ennore Port Ltd., in Chennai which is a mega project involving an
estimated investment of about Rs. 1400 cores, a Multi-purpose Berth at Pardip Port
Trust, North Cargo Berth-II at V.O.Chidambaranar Port and 3 berths at Kandla Port.
29 private sector projects, are already operational and 20 projects are under
implementation. Apart from these, another 21 projects are under bidding.

10
The following PPP projects have been awarded for development and construction
of Berths /Mechanization in respect of Kandla, Paradip and V.O.Chidambaranar
Port.

S.No. Project Development Estimated Capacity(MT)

Cost (Rs.
Crore)
1 Development of Container Terminal at 1407 15
Ennore
2 Multi purpose berth at Paradip Port 387.31 5
3 Construction of North Cargo Berth No. II 332.16 7
at V.O.Chidambaranar
4 Development of 14th Multipurpose Cargo 188.87 2
berth at Kandla
5 Development of 15th multipurpose cargo 188.87 2
berth at kandla
6 Development of 15th multipurpose cargo 188.87 2
berth at Kandla

2.2.5 11th Five Year Plan

The 11th Plan document has been finalized and released by the Planning
Commission. The Plan document has targeted a GDP growth rate of 9%. The
manufacturing sector is expected to grow at 12% requiring high quality
infrastructure in roads, railways, ports, power and telecommunication. In the
backdrop of doubling of India’s share in the world trade in the next five years,
efficiency and speed in the movement of cargo through ports are vital. Shipbuilding
and cargo technologies are changing rapidly; ships are bigger and faster with large-
sized container vessels drawing 14.5 m draft and moving at speeds of 25 knots; and
containerization of traffic is growing steadily and significantly. To meet such
challenges, initiatives taken include Electronic Data Interchange (EDI)- based single
window clearance in many ports and development of an International Container
Transshipment Terminal at Cochin. Non-major and private ports have also seen
spectacular growth.

The 11th Plan has projected that the total traffic handled by ports in India will cross
one Billion Tonne mark and will reach 1008.95 Million Tonne by 2011-12 with the

11
Major Ports having a 70% share with a traffic target of 708.09 MT. The capacity
requirement is expected to be in the region of 1.5 Billion Tonne at 1589 MT with
the 13 Major Ports expected to have a capacity of around one Billion Tonne at
1016.55 MTPA. The total investment required in the Port Sector, including the
Major Ports, for the 11th Plan has been pegged at around Rs. 36868 crore with a
bulk of it coming from private sector in commercially viable activities such as
construction and operation of berths/terminals. The investment projected has been
estimated at Rs. 36868 crore. The Government Budgetary support for the overall
Port sector, which Includes Andaman & Lakshadweep Harbour Works, Post
Tsunami Reconstruction Works, Web Based EDI, R&D studies etc., has been
projected at Rs. 3749 crore. The allocation for the Major Ports stands at Rs. 2056.98
crore mainly on projects involving common user facilities such as dredging of
approach channels, etc.

2.3 SHIPPING SECTOR ACHIEVEMENT

2.3.1 Expansion of Indian Tonnage:

Indian tonnage for the first time has crossed 10 MGT mark. As
on 1.11.2010 Indian Tonnage stood at 10.14 million GT and ranked
16th in the world shipping Tonnage. The Indian flagged
vessels are carrying presently around 8.4% of Indian exim cargo.

2.3.2. Directorate General of Shipping:

 The Directorate and MMD continued their tasks of producing

competent maritime officers for the Indian and world fleet officers
through the rigorous exam schedules.
 The statutory inspections on PSC, FSI, ISM etc. were
strengthened during the year.

 The nation at present has 130 Maritime training institutes 82 of

them are pre sea training institutes and 48 post sea training
institutes.
12
 The nation has an approved pre sea training capacity of 13,300
in their institutes.

 11020 fresh CDCs were issued under various categories during

the year.

 441 new identity cards were issued to sailing vessel

personnel.

 India has ratified 18 international conventions.

 A 24x7 tele-helpline was started at the DG Shipping from
2.10.2010 by which any depressed seafarer will be connected to
a professional counselor to address his problem and get an
immediate counseling.

 82 ships were added to Indian tonnage and the total number of

ships in India‟s fleet at the end of October 2010 was 1035.

 The improvement of coastal trade in the country is of utmost

importance in the present day context to improve the National
economy. The Coastal Shipping Policy as a prelude to this effect
has been drafted.

 The coastal security measure initiated after the terrorist attacks

has tightened the procedures followed by the authorities on
granting shore leave to Indian seafarers. On constant persuasion
with Ministry of Home Affairs, the duration of shore leave which
was reduced to 8 hours was increased to 10 days by a special
order of Ministry of Home Affairs, New Delhi.
 Actions were initiated to simplify the procedure for
 registration of vessels under the Merchant Shipping Act, 1958
regarding
 allotment of name, call sign, Maritime Mobile Station

13
  Identification (MMSI) Number, etc. so that an applicant will be
able to get the allotment within short duration on line/by fax.
 Seamen by nature of their job, are not covered under any
pension scheme after their retirement from active sea carrier.
The requirement of a social security to the seamen in their
retired life was advocated by all concerned of shipping industry.
Considering the genuinity in the demand, the Seamen Provident
Fund Organisation has mooted a proposal for formulating a
contributory annuity scheme for seafarer during
this year.

2.3.3. SHIPPING CORPORATION OF INDIA:

Under the NMDP, the Shipping Corporation of India Ltd.

(SCI), to whom Government has conferred the Navratna status, has
been going for tonnage expansion. SCI has proposed to acquire 62

vessels during the 11th Plan at a cost of approximately Rs.13,000

crores. During the 11th Plan period, they have taken delivery of 16
vessels, out of which 12 vessels were ordered during the 10th Plan
period and 4 vessels during the 11th Plan. Out of the 62 vessels
proposed for acquisition, they have placed orders for construction of
33 vessels with different shipyards and have acquired 1 Resale
vessel, and the remaining 28 vessels will be processed in phased
manner between 2010 and 2012. Except for the last year (i.e. 2009-
10) when SCI‟s profit was affected due to the global economic crisis,
the SCI has been making profit of over Rs.800 crores for each of the
last five years. SCI, the largest Indian Shipping Company declared a
profit of Rs.376.90 crores for the year ended March, 2010 and
declared dividend of 50% of the paid up capital.

The Government approved issue of fresh equity of 10% by SCI

and sale of 10% of existing Govt. shareholding. With this, Govt.
holding has come down to 63.75% from 80.12%. This would provide
opportunity to general public to participate in the company‟s growth
and ensuring greater public accountability. Rs.582.364 cr. each was
raised by SCI & Govt.
14141414
2.3.4 INDIAN MARITIME UNIVERSITY

Indian Maritime University (IMU) has been established as a

Central University by the Government of India by an Act of
Parliament, namely, the Indian Maritime University Act, 2008. The
Act was brought into force on 14th November 2008 and notified in the
Gazette of India. The IMU have been sanctioned an amount of Rs.
282.25 crores to undertake developmental work at Chennai and its
campuses. Out of Rs.282.25 crore, Rs.35 crores have been allocated
for preparatory works prior to 2009-10 and Rs.58.73 crores have
been allocated during 2009-10. The total recurring expenditure of
the IMU was Rs.44.52 cores against the total revenue generated of
Rs. 54.13 crores.

Significant infrastructural development activities are being

undertaken in all campuses of the University in form of construction
of additional classrooms and new buildings for the support of
academic and administrative activities. Land has been developed and
construction works for Administrative building for headquarters at
Chennai has commenced and is in progress. Construction of
Periphery Compound wall for 1.5km length on western side of IMU
site is in completion stage.

Plans for introducing more courses are under formulation. The

intake of seats in existing courses in institutes subsumed in

Indian Maritime University is being enhanced to implement the

Central Educational Institutions (Reservation in Admission) Act,
2007. B.Tech in Naval Architecture and Ocean Engineering, MBA in
Port and Shipping Management, MBA in International Transportation
and Logistics and PG Diploma in Naval Architecture and Ocean
Engineering have been introduced.

15
2.3.5 Shipbuilding Sector

2.3.5.1. Cochin Shipyard Ltd.

 Cochin Shipyard achieved an all time high Net Profit of Rs 223
Crores for the year 2009-10 as compared to Rs 160 crores for
the year 2008-09

 The yard concluded a contract for construction of 20 Fast Patrol

Vessels for the Indian Navy on 20th October 2010

 The yard concluded a contract for 4 Platform Supply Vessels for

M/s Seatankers Management Company Ltd, Cyprus on 03rd
Sep 2010

 Delivered 5 Offshore Support Vessels in 2009-10 to owners in

USA and Western Europe and another 6 during the year 2010-
11.

 Declared dividend of 10% on equity shares and 7 % on

preference shares for the year 2009-10.

 Implemented long term wage revision for workmen

 60 T LLTT Crane commissioned on 28th May 2010

 Foundation Stone for a 500 T Bollard Pull Facility laid at

Vizhinjam on 03rd May 2010

2.3.5.2. Hoogly Dock & Port Engineers Ltd:

During the year 2009-10, under noted vessels were under

construction:

i) One 300 Ton Self Loading Cargo Vessel for IWAI was
delivered by HDPEL.
16
ii) Construction of 1 No. Hydraulic Surface Dredger for IWAI is
under progress and the vessel with her machinery and
equipment has been launched. The expected delivery of the
vessel is by March 2011.

iii) Construction of 6 Nos. Work Boats for IWAI is under progress.

Expected delivery of 1st two vessels in May‟2011, 3rd and 4th
vessels in June‟2011 and the last two vessels in July‟2011.

2.3.5.3. Hindustan Shipyard Limited:

Govt of India decided to transfer the administrative control of

Hindustan Shipyard Limited from the Ministry of Shipping to
Ministry of Defence . Notification to this effect was issued on 23-2-
2010. Since then HSL has been functioning under the
administrative control of Ministry of Defence.

2.3.5.4 Shipbuilding Subsidy Scheme

Government has been operating a shipbuilding subsidy scheme for

Central Public Sector Shipyards intermittently since 1971 with some
gaps and modifications from time to time. Government of India
extended the Shipbuilding Subsidy Scheme, for both export and
domestic orders to all the Indian shipyards including private sector
shipyards with the approval of Cabinet Committee on Economic
Affairs on 25.10.2002.

The scheme was applicable up to 14th August, 2007. In

implementation of the decision of the Government of India for
liquidation of liability for payment of subsidy, this Ministry has
issued the modified guidelines dated 25th March, 2009 for liquidation
of the liability for payment of subsidy for ongoing eligible
shipbuilding contracts entered by Central Public Sector shipyards
upto 14th August, 2007. The guidelines dated 25th March, 2009 have
been further modified by the Ministry issued on 29th September,
2009. This Ministry has also been reviewing the guidelines and
issuing instructions from time to time.

17
 A sum of Rs. 91.7288 Crore has been released to the private
sector shipyards/non central PSU shipyards during the current
year.

2.3.5 Directorate General of Lighthouses & lightships

 Two new Lighthouses at Mallipattinam and Poompuhar have

been established.
 One DGPS Station at Rameshwaram has been established.
 One lighted Beacon at Chidiya Tapu has been established.
 05 Radar Beacons (Racons) at Mumbai High Platform has been
established.
 Work order for Establishment of National Automatic
Identification System (AIS) Network has been placed.

 Work order for Automation & Remote Control of 78 Lighthouses

in Cochin, Chennai, Visakhapatnam and Kolkata Lighthouses
District has been placed.

 Trial run for Gulf of Kachchh-VTS for partial operations

started.
 A hybrid energy system consisting of wind energy and solar
energy has been established at False Point Lighthouse. Work at
two locations namely East Island (Andaman) and Kanhoji Angre
(Maharashtra) is in progress.

 Keating Point DGPS station, damaged during Tsunami has been

restored and put on trial run.

18
2.3.6 INLAND WATER TRANSPORT
Inland Waterways Authority of India is undertaking projects for
making National Waterways 1, 2 and 3 (Ganga, Brahmaputra and
West Coast Canal) fully functional by providing navigational channel
of 3 m/2m/1.5 m depth for about 330 days in a year, in various
stretches, fixed and floating terminals at selected locations and aids
for day and night navigation with DGPS connectivity. Many of the
projects made progress during the year viz, construction of Cutter
Suction Dredging units and Hydraulic Surface Dredger for NW-1, 2 &
3, installation of DGPS stations at Bhagalpur and Jogighopa, capital
dredging between Alapuzha and Edapallikota in NW-3, extension of
night navigation facilities in some stretches, construction work for
high level jetty at Patna terminal, high level jetty at Pandu terminal,
terminal at Kolkata (G.R. Jetty) and Kollam, etc. Six Cutter Suction
Dredgers (CSD) have been received. Two RO-RO jetties at Bolgatty
Island and Willingdon Island in Cochin Port Trust area have been
constructed to provide connectivity between NW-3 and International
Container Transshipment Terminal (ICCTT), Vallarpadam.

With regard to cargo transportation on three National

Waterways, regular transportation of stone chips on NW-1 and
transportation of ODCs on NW-1 & 2, introduction of cruise vessel
operation between Kolkata and Varanasi, apart from regular
movement of cruise vessels/house boats in NW-1, 2 & 3, show
revival of IWT. NTPC agreed for long-term commitment of
transportation of 3MT imported coal through IWT mode to Farakka
and Kahalgaon STPS for a period of 7 years. Under Indo-Bangladesh
Protocol on IWT, Ashuganj in Bangladesh and Silghat in India has
been added as a Ports of Call in the Protocol route and also Ashuganj
as a multimodal point for transportation of goods to North-East. MEA
has appointed an Indian contractor [M/s ESSAR projects (I) Pvt. Ltd]
for construction of port and IWT components of Kaladan Multimodal
transport project at a cost Rs 342 cr. based on the DPR developed by
IWAI. Contract was signed In May 2010 and the completion period of
the project is 3 years.

19
2.3.7 India-Sri Lanka Ferry Service:

An MoU has been signed between the Government of India and

Sri Lanka to operate passenger Ferry Service between Tuticorin –
Colombo and Rameshwaram – Talaimannar. The Ferry Service
between Tuticorin – Colombo is expected to start operating shortly
giving boost to the existing friendly relations between the two
neighbouring countries. Efforts are also being made to progress the
work for providing the necessary infrastructure for restarting the
ferry services between Rameshwaram – Talaimannar at the earliest.

2.4 CHARTERING SECTOR ACHIEVEMENTS

The Baltic Dry Index (BDI) opened the year 2010 with 3140
on 4 January and was 4074 on 1st June indicating signs of global
th

economic recovery. Thereafter, the dry-bulk market experienced

its longest drop in 15 years and the BDI nosedived to 1700 on 15th
July,2010. Most analysts attributed the fall to record levels of new
building deliveries, lackluster demand for cargoes like iron ore and
slowing growth in Europe, North America and South-East Asia.

The market remained bearish and volatile for the rest of the
year, which was attributed mainly to demand adjustment and port
congestion at iron-ore and coal handling facilities in Brazil, China
and Australia and closed the year with BDI at 1773 on the 24th
Dec.,2010 owning to widening the supply demand gap. The Baltic
Clean Tanker Index (BCTI)/Baltic Dirty Tanker Index (BDTI)
fluctuated throughout the year 2010 due to seasonal variation in
demand and the liquid market remained subdued. The year 2011
is likely to be the year of ‘survival of the fittest’ with ‘consolidation’
taking place in the shipping industry worldwide. Both dry cargo
freight market and the liquid cargo freight market are expected to
remain more or less flat in 2011 with some improvement likely
towards the end of the year due to demand adjustment.

20
During the period under report from 1st January’2010 to 31st
December,2010, a total 441 ships were chartered by the
Chartering Wing (Transchart) for shipment of total quantity of
approx.282.57 lakh Mts. of cargoes on government account. Out
of total 441 ships chartered 141 were Indian Ships which carried
approx. 94.25 lakh Mts. i.e. approx. 33.35% of the total quantity.
The main reason for low percentage of cargo carried by Indian
vessels was due to inadequate availability of required type of
vessels in Indian fleet for carriage of crude oil, Coking Coal and
Fertilizers as well as Indian shipowners preferring better alternate
opportunities available to Indian vessels in cross trades. The main
items under dry/liquid cargoes for which the shipping
arrangements were made during the period included Crude Oil,
Coking Coal, Fertilizer, fertilizer raw materials, Lime Stone and iron
ore etc.

Concerted efforts were made to provide shipping coverage at

competitive freight rate as per the requirement of indenting
departments. While making shipping arrangements, efforts were
made for maximum utilization of available/suitable Indian tonnage.

21
 CHAPTER III

PORTS

3.1 INTRODUCTION

3.1.1Ports provide an interface between the ocean transport and land-based

transport. There are 12 Major Ports in India out of which 6 are located in the
East Coast and 6 in the West Coast.

3.2 Major Ports in India

3.2.1 Kolkata Port

Kolkata Port is the only riverine major port in India having an existence of about
138 years. It has a vast hinterland comprising the entire Eastern India including
West Bengal, Bihar, Jharkhand, UP, MP, Assam, North East Hill States and the two
landlocked neighbouring countries Nepal and Bhutan. The port has twin dock
systems viz. Kolkata Dock System (KDS) on the eastern bank and Haldia Dock
Complex (HDC) on the western bank of river Hooghly.

3.2.2 Paradip Port

Paradip Port is the only major seaport in the state of Orissa. Pt. Jawaharlal Nehru
Ex-Prime Minister of India laid the foundation stone of the Port on 3rd January
1962 near the confluence of river Mahanadi on the east coast of Bay of Bengal. The
Port was opened to traffic on 12th March 1966 and declared as Major Port on 18th
April 1966. The port has handled 356.93 lakh tonnes of traffic during the period (i.e
up to 30.11.2010) as against 365.12 lakh tonnes handled during the corresponding
period of the previous year showing an decrease by 2.24% over the corresponding
period of the previous year.

3.2.3 New Mangalore Port

New Mangalore Port is the 9th Major Port located on the West Coast of India
midway between Mormugao & Cochin. This all weather Major Port was
inaugurated on 11th January 1975. The Port Trust Board was constituted for the
New Mangalore Port on 01-04-1980. The development of the Port was taken up in
stages.

22
At present, there are six General Cargo Berths with a draft varying from 9.50 Mtrs.
to 10.50 Mtrs. and a shallow draft berth with a draft of 6.50 Mtrs., one Oil Jetty
with a draft of 10.50 Mtrs., two Oil Jetties for crude/product of M/s. MRPL with a
draft of 14.00 Mtrs., one Multi User Liquid Jetty with a draft of 12.50 Mtrs., one
Iron Ore Berth with a draft of 13.00 Mtrs. and one Deep Draft Multipurpose general
cargo berth with a draft of 14.00 Mtrs. The total installed capacity of the Port is
44.20 MTPA as per the recent assessment.

3.2.4 Cochin Port

The modern Port of Cochin was developed during the period 1920-1940 due to the
untiring efforts of Sir Robert Bristow. By 1930-31 the Port was formally opened
for vessels up to 30 feet draught. Cochin was given the status of a Major Port in
1936. The administration of the Port got vested in a Board of Trustees on 29 th
February 1964 under the Major Port Trusts Act 1963. The entrance to Port is
through the Cochin Gut between the peninsular headland Vypeen and Fort Cochin.
The port limits extend up to the entire backwaters and the connecting creeks and
channels.

The approach channel upto the Cochin Gut, is about 1000 metre. long with a
designed width of 200 metre and maintained dredged depth of 13.8 metre. From the
Gut the channel divides into Mattancherry channel and Ernakulam Channel, leading
to west and east of Willingdon Island respectively and berthing facilities for ships
have been provided in the form of wharves, berths, jetties and stream moorings
alongside these channels.

3.2.5 Jawaharlal Nehru Port

Constructed in the mid 80's and commissioned on 26th May 1989, Jawaharlal
Nehru Port has come a long way by becoming a world-class international container
handling port. JN Port is a trendsetter in the matter of port development in India
through new initiatives like private sector participation. It is situated in between 18
56'43" North and 72 56'24" East along the eastern shore of Mumbai harbour off
Elephanta Island. Port handles vessels having draught up to 12.50 meters

23
3.2.6 Mumbai Port

Mumbai Port is a fully integrated multi-purpose port handling container, dry bulk,
liquid bulk and break bulk cargo. The Port has extensive wet and dry dock facilities
to meet the normal needs of ships using the port. There are three enclosed wet docks
namely, Prince's, Victoria and Indira Docks, having a total area of 46.30 hectares
and quayage of 7,776 meters inside the wet basin and 853 meters along the harbour
wall.

Prince's Dock, a semi-tidal dock, commissioned in 1880. It has 8 berths, each with a
designed draft of 6.4 meters. The Victoria Dock, commissioned in 1888, is also a semi-
tidal dock. It has 14 berths, each with a designed draft of 6.7 meters. The Prince’s and
Victoria Dock basins will be filled up and used as Container Storage Yard under the
Offshore Container Terminal Project. The Prince’s and Victoria Dock basins will be
filled up and used as Container Storage Yard under the Offshore Container Terminal
Project. The filling up operations of Victoria Dock basin have already commenced in
current fiscal.

There are 4 berths at Jawahar Dweep, to handle crude and POL tankers and an
offshore berth at Pir Pau to handle liquid chemicals and some of the POL traffic. A
full-fledged Container Terminal has been set-up at BPS, Indira Dock which is
equipped with two Gantry cranes for ship to shore handling of containers and three
Rubber Tyred gantry cranes for yard operations.

3.2.7 Ennore Port

Ennore Port Limited (EPL), the 12th Major Port, is the first Corporatized Major Port
of India and registered under the Companies Act, 1956 on 11.10.1999. The Port
commenced commercial operations on 22.06.2001.

The first phase of the Port development, with an investment of Rs.1000 crores,
comprises of the South Break Water (1070M), North Break Water (3080M), two
Coal Wharves with 560M length to accommodate two panamax size vessels of
260M length each and a depth of (-) 15 M alongside with approach channel and
port basin of (-) 16M and (-) 15.5 M respectively. A multipurpose general cargo
berth to facilitate export/import of cars, handling heavy lifts & other clean cargo
has been developed and commissioned at an estimated cost of Rs. 110 Crores.

24
3.2.8 Chennai Port

Chennai Port is an all weather artificial harbour with one Outer Harbour and one
Inner Harbour with a wet Dock and a Boat Basin with round the clock navigation
facilities. The Port was established in 1875 located at 130 06’ N latitude and 800 18’
E longitude on the Bay of Bengal. Chennai Port is in the fourth position in cargo
traffic among the Major Ports of India.

3.2.9 Mormugao Port

Mormugao Port, situated on the west coast of India, is more than a century old
port. It has modern infrastructure capable of handling a wide variety of cargo. It is
a natural harbour protected by a breakwater and also by a mole. Mormugao Port
was declared as a Major Port on December 2, 1963. A deep draft channel with 14.4.
mtrs. depth permits large vessels to enter the harbour. Existing railway and road
connectivity provides seamless transportation to the rest of the country. A modern
computer based Vessel Traffic Management System provides reliable marine
services. Mormugao port has about 40,000 sq.mtrs. of covered storage space and
about 2.25 lakh sq. mtrs. of open storage area. 44 tanks owned by different
agencies are available for storing liquid cargo. The port also has a dry dock and a
wet repair berth. Mormugao Port plans to expand its infrastructure as well as the
capacity by developing new berths, deepening the approach channel, augmenting
the capacity of mechanical ore handling plant, construction of berth for cruise and
other non cargo vessels, offshore support base, etc.

3.2.10 V.O. Chidambaranar Port (earlier Tuticorin Port)

The V.O. Chidambaranar Port is located on the South Eastern Coast of India,
540 KMs South west of Chennai in the State of Tamil Nadu at Latitude 80 45' N and
Longitude 78013'E. The Port is also strategically located close to the East – West
international sea route. The Port of V.O. Chidambaranar is an artificial lagoon
type Harbor protected by two Rubble Mound Break Waters. The approach channel is
2400 meters long and 152.40 meters wide at the entrance. V.O. Chidambaranar
was declared as the 10th Major Port of India on 11-07-1974. The erstwhile Tuticorin
Minor Port and the newly constructed Tuticorin Major Port
were merged on 01-04-1979 and the Tuticorin Port Trust was constituted under
the Major Port Trust Acts, 1963. It was renamed as V.O. Chidambaranar
Port on 19/02/2011. Since then, the V.O. Chidambaranar Port Trust is
functioning with two wings, Viz., Zone – A, and Zone – B.
25
Zone-A of the Port has seven general Cargo Berths, One Container Berth, Two
Shallow Water Berths and two Coal Jetties and One Oil Jetty.

The zone B of the Port is the old anchorage Port located at about 9 KM from New
Port. The ships lie in the road stead and the lighters transfer the cargo from ships to
shore and vice-versa. There are jetties and wharves to a length of one K.M. to
accommodate the lighters and sailing vessels.

3.2.11 Kandla Port

Kandla Port was established in the year 1950 as a Central Project and Union
Government took over the Kandla for its development as a Major Port. The need of
developing Kandla as a Major Port has arisen due to the loss of Karachi Port to
Pakistan after independence and in order to ease congestion in the Bombay and
Calcutta Ports thereby reducing the inconvenience and the cost to the EXIM Trade.

Kandla Port was declared as a Major Port on 8.4.1955 by dedication of the first oil
berth to the service of the Nation. Kandla Port was brought under the Major Port
Trusts Act and was declared as Kandla Port Trust on 29.2.1964. The Port grew
gradually in terms of EXIM Trade and infrastructure development. As on date
Kandla Port has 12 Cargo berths and 6 Oil Jetties besides 3 SBMs., in OOT, Vadinar.
The cargo berths are equipped with cargo handling gears like wharf cranes of
various capacities and the oil jetties are connected to storage installations with
pipelines.

3.2.12 Visakhapatnam Port

Port of Visakhapatnam, a natural harbour, was opened to commercial shipping on 7th

October, 1933. During its 76 years of service, the Port established many landmarks
and consistently upgrading its infrastructure in tune with changing technological
trends in the Shipping industry. Projects worth of Rs. 2621 crores for capacity
augmentation have been taken up during 11th plan. The Visakhapatnam Port is the
only Indian Port possessing three International accreditations viz., ISO 14001; 2004
(EMS) / OHSAS 18001 and ISO 9001:2000 (QMS).

26
The Port has two harbours viz., Inner Harbour with 18 berths to accommodate
ships upto 11 mtrs. draft and Outer Harbour with 6 berths to accommodate upto
17 mtrs. draft. The Port has mechanized handling facilities for iron ore, iron pellets,
soya extraction, alumina, fertilizer raw material, crude oil & POL products, liquid
ammonia, Phosphoric acid, edible oil, caustic soda and other liquid cargoes.
Approval for mechanization of finished fertilizers and coal on DBBOT has been
received from the Ministry of which mechanization of coal handling facilities are
already awarded. Visakhapatnam Port handled 65.50 million tonnes in 2009-10
surpassing the previous record of 64.50 million tonnes handled during 2007-08.
Handled record quantity of 33.53 million tones of import cargo during 2009-10
surpassing the previous record of 30.87 million tones achieved ruing 2007-08. The
Port of Visakhapatnam has been declared winner of Greentech Safety Award –
Silver (2009) in the service sector for outstanding Achievement in Safety

Management.

3.3. Performance of Major Ports

3.3.1 The Major Ports handled a total traffic of million tonnes 560.98 during the
financial year 2009-10.

27
3.3.2 Traffic handled at Major Ports:

(in million tones)

Port Target 2010 Actual 2010 Actual 2009

(April-Dec.) (April – Dec.) (April – Dec.)

Kolkata 10.575 9.52 9.63

Haldia 25.875 25.55 24.61

Paradip 47.25 41.01 41.73

Visakhapatnam 52.5 49.76 49.31

Chennai 9.9 45.76 45.83

V.O.Chidambaranar 49.1325 18.26 17.63

Cochin 18.8475 13.24 12.06

New Mangalore 14.325 23.59 27.11

Mormugao 29.055 32.43 31.26

Jawaharlal Nehru 37.5 48.05 44.55

Mumbai 4.2 40.69 40.36

Kandla 46.5 61.45 59.74

Ennore 63.75 7.28 8.13

All Major Ports 447.21 416.61 411.95

3.3.3 Road and Rail Connectivity

All the Major Ports in the country are at present having both road and
rail connectivity. However, the capacity and quality of the existing
connectivity require improvement so that the flow of cargo in and out of the
port is smooth and efficient.

28
 The projects on rails and road connectivity are implemented mainly by
the National Highways Authority of India (NHAI) and Railways, respectively.
In a number of instances, the ports have made significant financial
contribution for execution of the connectivity projects. For example, Kandla,
New Mangalore and Paradip Ports have made financial contributions in the
implementation of rail connectivity projects implemented by the Railways
through Special Purpose Vehicle (SPV). Similarly, Paradip, Chennai,
Visakhapatnam, New Mangalore, V.O.Chidambaranar , Ennore and Mormugao
Ports have contributed in the SPV set by NHAI for implementation of road
connectivity projects. However, for the rail and road connectivity projects for
the International Container Terminal (ICTT) in Cochin Port financing is being
done through Government grant.

For expediting the ongoing rail/road connectivity projects and to

recommend new connectivity, two Committees have been set up by
Ministry of Shipping namely; Apex Committee and Operational
Committee.

3.3.4 Cargo Handled at major ports

(in million tones)

Commodity 2010 (April- 2009 (April-Dec)

Dec)

POL 133.98 129.99

Iron Ore 59.35 69.47

Fert. & Raw Materials 16.57 14.17

Coal 53.81 53.63

Containerized Cargo 83.46 73.84

(5.59)
Others 69.44 70.85

Total 416.61 411.95

29
3.3.5 Select Port Performance Indicators

The details of major performance indicators of the Ports are given below:

(A) Average Pre-Berthing detention and Average Turn Round

time:
Port Average Pre- Average Turn round
Berthing Detention- Time
on Port Account
(Days)
(Hours)

2010 2009 2010 2009

(April to December) (April to December)

Kolkata 4.23 4.36 5.34 5.34

Haldia 25.10 37.35 4.60 5.20

Paradip 2.17 1.50 8.47 9.84

Visakhapatnam 2.53 23.89 6.19 5.17

Chennai 0.99 0.98 4.48 4.12

V.O.Chidambaranar 9.60 11.52 4.18 4.14

Cochin 4.84 3.08 2.24 2.14

New Mangalore 0.72 0.72 2.73 3.22

Mormugao 18.23 22.16 6.60 5.62

Jawaharlal Nehru 13.68 6.48 2.74 1.94

Mumbai 8.16 7.69 4.60 4.42

Kandla 36.72 26.88 5.86 5.16

Ennore 0.01 0.52 2.73 2.24

All Major Ports 12.19 13.44 4.70 4.54

30
(B) Average Output per Ship Berth Day:

Port Average Output Per Ship Berth

Day (in Tonnes)

2010 2009

(April to (April to
December) December)

Kolkata 2580 2320

Haldia 6309 6182

Paradip 13647 13298

Visakhapatnam 9900 10136

Chennai 11229 11708

V.O.Chidambaranar 6062 6409

Cochin 11312 9953

New Mangalore 13881 13392

Mormugao 16051 16412

Jawaharlal Nehru 24767 24927

Mumbai 7299 6947

Kandla 13749 13217

Ennore 17237 22070

All Major Ports 10156 9995

31
3.4 Major Developments in Ports
Capacity at Major Ports

It has been the endeavour of Government to consistently enhance the cargo

handling capacity of major Ports keeping in view of the projected traffic for the
country. The aggregate capacity in major Ports, as on 31/03/2010 was 356.93
lakhs tonnes. Thus the favourable capacity traffic equation continued during the
year. The table gives the capacity and traffic in major ports since 2001-02 :-

(In Million tonnes)

Year Port capacity Traffic Handled

2001-02 343.95 287.58
2002-03 362.75 313.55
2003-04 389.50 344.80
2004-05 397.50 383.75
2005-06 456.20 423.41
2006-07 504.75 463.78
2007-08 532.17 519.31
2008-09 574.77 530.33
2009-10 616.73 561.09

OTHER PORT RELATED ORGANIZATION

3.5
Besides the 12 Major Ports, there are 3 organisations under the Ministry which are
entrusted with port-related matters.

3.5.1 Tariff Authority for Major Ports

The Tariff Authority for Major Ports was created in 1997 by an amendment to the
Major Port Trusts Act, 1963 and was constituted by the Government of India
through a Gazette Notification on 10/04/1997. Tariff Authority for Major Ports
provide for an independent Authority to regulate all tariffs, both vessel related and
cargo related, and rates for lease of properties in respect of Major Port Trusts and the
private operators located therein. This Authority is empowered not only to notify the
rates but also the conditionalties governing application of the rates. The jurisdiction
of the Authority is restricted to major port trusts and private terminals operating
therein.

32
3.5.2 Andaman Lakshadweep Harbour Works (ALHW)

Andaman Lakshadweep Harbour Works (ALHW) a sub –ordinate office

under Ministry of Shipping was established during 1965 for the service of A& N
islands and Lakshadweep Islands. The ALHW is entrusted with the responsibilities
of formulating and implementing the programme of Ministry of Shipping for
providing Port and Harbour facilities in Andaman & Nicobar Islands and
Lakshadweep Islands. From its inception, ALHW has been implementing the Port
development schemes from the funds provided by Ministry of Shipping under
Central Sector Plan schemes starting from the Third Five Year Plan onwards. Apart
from the creation of Port infrastructures, ALHW is also entrusted with
maintenance of Port structures & Cargo Handling equipments under the funds
provided by Andaman & Nicobar Administration and Lakshadweep Administration.

3.5.3 Dredging Corporation of India

Dredging Corporation of India Ltd. (DCIL) was formed in 1976 to provide

Integrated dredging and related marine services for promoting the country's
national and international maritime trade, beach nourishment, reclamation, inland
dredging, environmental protection and ultimately to become a global player, in the
field of dredging.

Located strategically on the eastern seaboard of India at Visakhapatnam, DCI helps

ensure continuous availability of the desired depths in the shipping channels of the
major and minor ports, Navy, fishing harbours and other maritime organizations. It
further serves the nation in a variety of ways, be it capital dredging for creation of
new harbours, deepening of existing harbours or maintenance dredging for the
upkeep of the required depths at various ports along the 5,700 kms. long coastline
of India.

33
 CHAPTER – IV
SHIPPING

4.1. Introduction

Shipping industry is one of the most globalised industries operating in a highly

competitive business environment that is far more liberalized than most of the other
industries and is, thus, intricately linked to the world economy and trade. Indian
shipping tonnage, which was only 1.92 lakhs Gross Tonnage (GT) on the eve of
Independence now stands at 10.14 million GT with 1038 ships as on 30th November,
2010. India has been a founder member of the International Maritime Organization
(IMO), a specialized agency set up under the United Nations primarily dealing with the
technical aspects of shipping relating to Maritime Safety, Protection of Marine
Environment, Standards of Training and related legal matters. India has been
participating in various meetings of the IMO Committees, sub-Committees, Council and
Assembly and has actively contributed towards the development of various Conventions,
Protocols, Codes and Guidelines developed by the IMO.

4.2 NATIONAL SHIPPING BOARD

The National Shipping Board is a permanent Statutory Body established in 1959

under Section 4 of the Merchant Shipping Act, 1958 to advise the Government of India
on matters related to Shipping including development thereof. In terms of the aforesaid
provision, the Board is re-constituted after every two years.

The Board comprises 6 Members of Parliament (4 from Lok Sabha and 2

from Rajya Sabha), 5 representatives of Central Government, 3 representatives
each of shipowners and seamen and 5 representatives of other interests
including its Chairman.

The Board has been reconstituted for a period of 2 years from 01st
September, 2010.

National Shipping Board had three meetings during the period from
01.01.2010 to 31.10.2010 in which following important issues were deliberated.

34
1) During 112th NSB Meeting dated 08.01.2010 at Mumbai, following
important issues were deliberated:-
i) Issue of Income Tax waiver for Indian Seafarers.
ii) Extension of scheme of subsidy for the ship building industry.
iii) Piracy issues.
iv) “Coastal Policy” issues.
v) Recent casualties on ships loading iron ore fines ex-Indian ports.
vi) Formulation of Pilot SOPs for Port Security by ICG.
vii) Overcoming threat to marine environment from ships sunk off
India‟s Coastline.

2) During 113th NSB Meeting dated 09.04.2010 at Chennai, following

important issues were deliberated:-
i) Income Tax waiver for Indian Seafarers.
ii) Recent casualties on iron ore ships.
iii) Strengthening a legislative mechanism for Port Entry Rules.
iv) Proximity of Fishing Harbours to Major Ports-Way Ahead.
v) Availability of Emergency towing vessels.
vi) Location of new ports.
vii) Rail connectivity.
viii) a) Checking of ships by surveyors/PSCOs.
b) On line sharing of Data on notice of arrival of ships.
3) During 114th NSB Meeting dated 23.10.2010 at Goa, following important
issues were deliberated:-

i) Recent casualty in Mumbai Port – collision between MSC Chitra and

M.V.Khalijia – Lessons learnt.

ii) Creating awareness about Merchant Navy in Tier 3 & Tier 4 cities.

35
4.3 DIRECTORATE GENERAL OF SHIPPING, MUMBAI

The Directorate General of Shipping, an attached office of the

Ministry of Shipping, Government of India was established in 1949 for
administering the Indian Merchant Shipping Act, 1958 on all
matters relating to shipping policy and legislation, implementation of
various

International Conventions relating to safety, prevention of pollution and

other mandatory regulations of the International Maritime Organizations,
promotion of maritime education and training, examination & certification,
supervision of other subordinate offices for their effective functioning etc.
The Director General of Shipping enjoys statutory recognition under
section 7 of the Merchant Shipping Act, 1958.

The Director General of Shipping is assisted on the administrative

side by Joint. Director General of Shipping, Deputy Directors General of
Shipping (non-technical); on the technical side by the Nautical Adviser-
cum-Additional Director General (Technical), Principal Officers-cum-Joint
Director General (Technical); on the Engineering side by the Chief
Surveyor-cum-Additional Director General (Technical); Principal Officers-
cum-Joint Director General (Technical) and on the Naval Architecture side,
by the Chief Ship Surveyor-cum-Joint Director General (Technical)/
Deputy Chief Ship Surveyors-cum-Senior Deputy Director General
(Technical). The Heads of allied offices supported by their subordinate
officers also assist the Director General of Shipping in the overall
discharge of various statutory functions. The Nautical Adviser and Chief
Surveyor are also Chief Examiners of Master/Mates and Engineers
respectively.

4.4 Functions of offices under the administrative control of the Directorate

General of Shipping.

36
(A) Mercantile Marine Department, Mumbai / Kolkata / Chennai / Kochi /
Kandla.

The Mercantile Marine Departments (MMDs) were set up in 1929 with

Headquarters at Mumbai, Kolkata and Chennai followed by Kochi and Kandla in 2005
to implement the Safety of Life At Sea (SOLAS) Conventions and Load Line Conventions.
These Departments were directly under the Ministry till the establishment of the
Directorate General of Shipping at Mumbai in 1949. The main objectives of MMDs are
to administer the various Merchant Shipping laws and rules relating to safety of ships
and life at sea, registration of ships, tonnage measurement, crew accommodation,
survey for load line, safety construction, prevention of pollution, enquiries into shipping
casualty and wrecks, surveys of passenger ships, radio equipments on board, inspection
and approval of statutory equipment for life saving and fire fighting appliances, wireless
telegraphy, global maritime distress and safety systems, navigational aids, pollution
prevention equipments, supervision of repairs and construction of ship on behalf of
State and Central Government organizations, Port State Control inspection, examination
and certification of various grades of certificates of competency as per relevant
examination rules under Merchant Shipping Act, 1958 etc.

The Principal Officers and the Surveyors-in-Charge have been notified to be the
Registrar of Indian ships and fishing vessels under section 24 and 435 (e) of the
Merchant Shipping Act, 1958 respectively. Under section 22 of the M.S. Act, every
Indian vessel exceeding 15 tons net, going out to sea, is required to be registered under
Part V of the Merchant Shipping Act, 1958.

In keeping pace with the stupendous growth of the industry the Maritime
administration has initiated various user friendly regulatory measures for the all round
development of the sector.

The additional responsibilities imposed from time to time in the form of new
statutes like MMTG Act, Admiralty Act, RP&S Rules and so on and also various
International Conventions, received adequate attention of the Directorate and MMDs
During the year, the surveys and inspections relating to safety of ships have been
delegated to the IRS with selective supervisory role for the DGS on important surveys.

37
(I) Passengers Ship Survey :

All passenger ships are subjected to survey of hull, Machinery, equipment etc.
during construction and there after annually. On completion of survey, Certificates
such as Passengers Ship Safety Certificate, Space Certificate, Special Trade Ship Safety
Certificate, Exemption Certificate, „A‟ Certificate and Certificate of Survey are issued

(II) Cargo Ship Safety Construction (CSSC) Surveys :

Under the requirements of SOLAS 74 Convention as amended, administration

is responsible for conduct of CSSC Surveys of various types of Cargo Ships under
construction and periodical and annual surveys thereafter. The task of surveys of Cargo
Ships under constructions/re-construction abroad and subsequent periodical/annual
surveys has been delegated to recognized Classification Societies. The inspection
reports submitted by the Classification Societies are scrutinized by MMDs and
thereafter certificates with appropriate validity are issued.

(III) Load Line Surveys :

All Sea going vessels are required to be assigned Load Line and therefore, Load
Line Surveys are carried out as per Load Line Convention and M.S. (Load Line) Rules,
1979. This function has been delegated to Classification Societies who are authorized to
issue the Load Line Certificates.

(IV) Safety Equipment Surveys :

The Department carries out the Surveys of Safety Equipment on

board ships under the requirements of SOLAS Convention 1974 as
amended and the M.S. (Fire Fighting Appliances) Rules, 1990 and M.S.
(Life Saving Appliances) Rules, 1991. This Survey is mandatorily carried
out by the Department.

38
(V) International Oil Pollution Prevention (IOPP) Surveys :

The Department is also responsible for survey and certification for

Oil Pollution under the various Annexes of MARPOL 73/38 Convention. In
this survey, inspection of pollution prevention equipment to protect and
safeguard the marine environment is undertaken. This survey is also
entrusted to the Authorized Classification Societies and on receipt of their
report, the Department issues the IOPP Certificate after scrutinizing the
said report.

(VI) Certificate of Fitness and International Pollution Prevention

Certificate (IPPC) :
The Certificate of Fitness / IPPC for the carriage of Noxious Liquid
Substances in Bulk are issued after survey is carried out under Annex – II
of the MARPOL and the Gas and Chemical Codes formulated by the
International Maritime Organizations. This survey is usually carried
out by the Classification Societies on behalf of the Department and the
certificate is issued to the vessel on the basis of their report.

(VII) Safety Radio Telegraphy Survey (SRTS):

All Sea going vessels over 300 G.T. are required to be surveyed and
issued with a Safety Radio Telegraphy/Telephony Certificate in compliance
with the M.S. (Radio) Rules, 1983 and Chapter IV of SOLAS 74 as
amended from time to time. The survey consists of checking of Radio
equipment for distress, safety and normal communication on board. With
the harmonization of Certificates, the Safety Radio Certificate is issued.

(VIII) Survey of Fishing and Sailing Vessels :

Annual Inspection and survey of Fishing vessels and Sailing vessels
are also being undertaken by the Department and Certificate of Survey
issued.

(IX) Industry Survey and Miscellaneous Surveys :

In addition to the above surveys, the Department is designated to

carry out various industrial surveys pertaining mainly to propulsion /
auxiliary machinery, ship‟s auxiliaries such as pumps, compressors,
coolers, air bottles, lifeboat davit etc. engines, safety – fire fighting,
navigational and radio equipment, deck flooring and insulating material
etc.

39
(X) Port State Control Inspection / Flag State Inspection:

Under the International Conventions for Load Line, SOLAS, MARPOL

73/78, and STCW‟ 78, the Department has an international obligation for
verifying compliance of various Conventions by ships visiting the ports
within its territory.

(XI) Preliminary Inquiries / Formal Investigations into Shipping

Casualties :

Under Part XII of the M.S. Act 1958, the Department is required to
conduct Preliminary Inquiries and assist the Court in the conduct of
formal investigation into all the shipping casualties.
(XII) Examinations :
The MMDs conduct various grades of Certificate of competence
Examinations in Nautical and Engineering disciplines under the
International Convention of STCW „78, as amended in „95 under M.S.
(STCW) Rules „98, Fishing Grade Examinations and the Examinations for
various Certificates of Competency under IV Act.

(XIII) Inspection of Training Institutes :

The Pre-Sea and Post–Sea Maritime Training Institutes in the private

sector are inspected by the MMDs at various stages before and after
approval by the DGS.

4.5 Shipping Offices, Mumbai / Kolkata / Chennai :

The main functions of the Govt. Shipping Offices established under
Section 11 of the Merchant Shipping Act, 1958 are:

(i) To provide means for securing the presence on-board at proper times of the
seamen who are so engaged.

(ii) To facilitate making of apprenticeship to the sea service.

(iii) To hear and decide disputes under Section 132 between a Master, owner or
agent of a ship and any of the crew of the ship.

40
 (iv) To transmit the complaint of any dispute of a foreign seaman of a vessel,
registered in a country other than India.

(v) Issue of Continuous Discharge Certificate-cum-Seafarers Identity

Document (CDC).

(vi)) Enquiry into cause of death on board Indian ships collection of levy fees
from the shipping companies in respect of seamen engaged and transfer of
such amount to the Seamen‟s Welfare Fund Society (SWFS).

4.6 Seamen’s Employment Office Mumbai/ Kolkata/ Chennai.

The Seamen's Employment Office, Kolkata/ Mumbai/ Chennai

established under section 12 of the Merchant Shipping Act 1958,
continued to function in accordance with the provisions contained in
Section 95 to 98 of the M.S. Act and as guided by the instructions

and orders issued by the Directorate from time to time. In

term of the amended section 95 of the M.S. Act, 1958 the business of
the Seamen Employment Offices include:-
(i) Issuance of licence, regulating and controlling the recruitment
and placement service providers.

(ii) Ensuring that no fees or other charges for recruitment or

placement of seafarers are borne directly or indirectly or in
whole or in part, by the seafarers.

(iii) Ensuring that adequate machinery and procedure exist for the
investigation, if necessary, of complaints concerning the
activities of recruitment and placement service providers.

(iv) Maintaining registers of seamen in respect of the categories of

seamen.

4.7 Seamen's Welfare Office, Chennai

This office undertakes the liaison work between the Indian seamen
and the officials of the country they visit and render all assistance to the
seamen in case of distress and also provides recreational facilities etc. to
them.
41
4.8 Regional Office (Sails) Mumbai/ Jamnagar/ V.O.Chidambaranar:

The Regional Offices (Sails) at Mumbai, Jamnagar and

V.O.Chidambaranar assist the sailing vessel owners for standardization of
trade by securing cargo and elimination of malpractices, registration of
sailing vessels, issuance / renewal of identity cards and issues Tindal‟s
permit to the Tindal of sailing vessels, repatriation of standard seamen
due to sailing vessels casualties, etc.

4.9 MARITIME TRAINING IN INDIA:

India has a long maritime tradition. She is the 20th largest maritime
country in the world. The single largest contribution factor to this glorious
tradition is the presence of a strong, dedicated, efficient and reliable
reservoir of officers and ratings of Merchant Navy in India. The safety and
efficiency of ships are crucially dependent upon professional ability and
dedication of well trained seafarers. Great importance has always been
attached to the maintenance of high quality training imparted to maritime
personnel in India, which has facilitated India emerging as a major
manpower supply nation to the world-wide shipping. The ever increasing
demand of the Indian seafarers world-wide is testament of the quality of
education and training received in India.
To meet the requirement of trained manpower in the merchant navy,
the Directorate General of Shipping through various maritime training
institutes both in public and private sector, imparts pre-sea and post sea
training in engineering and nautical discipline. There are 130 Training
Institutes at present.

4.10 WELFARE ORGANISATIONS

(A) Seamen’s Provident Fund Organization, Mumbai.

Brief Background:- The Seamen‟s Provident Fund Scheme, the first social security
scheme for Indian Merchant Navy Seamen, brought under statute by enactment of the
Seamen‟s Provident Fund Act, 1966 (4 of 1966) was introduced retrospectively with
effect from 1st July, 1964, to provide for the institution of a provident fund for seamen
as old age retirement benefit and their family members in the event of death of seamen
members.

42
General Administration:- The Seamen‟s Provident Fund is vested in and administered
by the Board of Trustees consisting of the Chairman and three representatives each of
the Government, Employers and Employees. The Director General of Shipping is an ex-
officio Chairman of the Board of Trustees and the Commissioner is the Chief Executive
Officer and the Secretary to the Board

(B) NATIONAL WELFARE BOARD FOR SEAFARERS

As provided under Section 218 of Merchant Shipping Act. 1958 the Government
of India has constituted a National Welfare Board for Seafarers headed by the Union
Minister of Shipping for advising the Government on the measure to be taken for
promoting the welfare of Seamen whether on shore or aboard.

The Board functions with Minister of shipping as the chairman and Minister of state for
shipping as Vice Chairman. It comprises of 2 Members of Parliament (one from Lok
Sabha and one from Rajya Sabha), 4 representatives from Central Government, 3
representatives each of Ship-owners and Seafarers, 2 representatives from Port Trusts,
1 non- official Member from the field of Seamen‟s Welfare of Public, representative from
Society interested in Seamen‟s Welfare.

(C ) SEAFARERS' WELFARE FUND SOCIETY

The SWF Society is a Central Organisation for Welfare of Indian Seafarers and
their families. It is registered under the Societies Registration Act 1860 and as a
Trust under the Bombay Public Trust Act 1950.

Society represents various interests connected with Indian Shipping which

includes representatives of Indian and Foreign Shipowners and also of Seafarers‟
Unions separately for officers and seamen. The control of business and affairs of
the Society is vested with the Committee of Management of which the Director
General of Shipping is the ex-officio Chairman.

43
4.11 MINOR PORT SURVEY ORGANISATION

1. STRUCTURE AND FUNCTION:

Minor Ports Survey Organization (MPSO) is a subordinate office

under the Ministry of Shipping, entrusted with the responsibilities of
carrying out Hydrographic surveys in minor/major ports and inland
waters on agreed program. The Senior Hydrographic Surveyor is the Head
of the Office with its Headquarters at Navi Mumbai. The Director General
of Shipping, Mumbai is its Head of the Department.

2. PERFORMANCE:

The Hydrographic survey works carried out by the organization up to

31.10.10.
i) Pre and Post dredging surveys of Jawaharlal Nehru Port Trust
channel for maintenance of navigational channels.

ii) Detailed Hydrographic Survey for standalone Container handling

facility towards north of Jawaharlal Nehru Port Trust.

iii) MPSO supervising jointly with Kandla Port Trust surveyors the
tripartite Hydrographic surveys conducted by Dredging contractors
with their launch and equipment in Kandla Port Trust channel on
monthly basis.

iv) Detailed Survey demarcation and fixing boundary points of water front area of
Kandla Port Trust Limits.

v) Detailed Hydrographic Survey of Channel and Sand trap of

Gangavaram Port limited, Visakhapatnam.

vi) MPSO supervised jointly with Mumbai Port Trust surveyors the
tripartite Jet probing survey of Offshore Container Terminal
conducted by dredging contractor with their launch and equipment.

vii) MPSO supervised jointly with Mumbai Port Trust surveyor the side
scan sonar survey of MBPT and JNPT port limits with hired
equipment to locate the sunken containers fallen from ship MSC
Chitra.
44
viii) MPSO supervised jointly with Cochin Port Surveyors the interim
Hydrographic survey conducted by Dredging contractors with their
launch and equipment in Cochin Port channel.

ix) Interim Hydrographic Survey of channel of Dhabol port for Ratnagiri

Gas and Power Pvt. Ltd.

4.12 Indian Maritime University

Indian Maritime University (IMU) has been established as a Central University by

the Government of India by an Act of Parliament, namely, the Indian Maritime
University Act, 2008. The „Act‟ was brought into force on 14th November 2008 and
notified in the Gazette of India. The University has integrated into its folds the existing
seven maritime academic institutions, namely, National Maritime Academy-Chennai,
T.S. Chanakya- Mumbai, Lal Bahadur Shastri College of Advanced Maritime Studies
and Research –Mumbai, Marine Engineering Research Institute-Mumbai, Marine
Engineering Research Institute- Kolkata, Indian Institute of Port Management- Kolkata
and National Ship Design & Research Centre- Visaskhapatnam.

IMU aims to achieve a high degree of excellence and to become renowned as a

University of global standing. The Vision of University is to create an intensive learning
maritime community, strongly networked with and contributing to the domestic and
global maritime knowledge pool besides being committed to modifying domestic and
global maritime organisation and policy concerns and issues through debate and
research in which students, faculty, society and the government along with industry will
participate.

Academic Programmes

As per „Act‟, The University has five Schools, namely, School of Nautical Studies,
School of Maritime Studies, School of Maritime Management, School of Maritime Law,
and School of Naval Architecture. In respect of School of Maritime Law, the courses are
expected to be started by Academic Year 2011-12.

Courses offered

a) Chennai Campus

i) Diploma in Nautical Science leading to B.Sc. (Nautical Science),

45
 ii) Bachelor of Technology (Marine Engineering),

iii) M.B.A. (Port and Shipping Management), and

iv) M.B.A. (International Transportation and Logistics).

b) Mumbai Campus

i) B.Sc. Nautical Science

ii) B.Sc. (Maritime Studies);

iii) Diploma in Nautical Science leading to B.Sc. (Nautical Science)

iv) Post Graduate Diploma in Maritime Engineering (PGDME)

c) Kolkata Campus

i) B.Tech. (Marine Engineering);

ii) Diploma in Nautical Science leading to B.Sc. (Nautical Science);

iii) P.G. Diploma course in Export and Import Management,

iv) P.G. Diploma course in Port and Shipping Management,

v) P.G. Diploma course in Logistics and Supply Chain Management.

d) Vishakhapatnam Campus

i) B.Tech. (Naval Architecture and Ocean Engineering),

ii) P.G. Diploma (Naval Architecture and Ocean Engineering)

e) Cochin Campus

i) Diploma in Nautical Science leading to B.Sc. (Nautical Science)

ii) B. Sc. Ship Building and Repair

iii) Post Graduate Diploma in Maritime Engineering (PGDME)

iv) Master of Business Administration in Port and Shipping Management

46
Admissions

Admission to various courses of the University is based on performance of

candidates in the IMU-Common Entrance Test (IMU-CET), conducted throughout India
twice in a year i.e. June and December. For B. Tech. (Marine Engineering) J.E.E. scores
are also taken for admitting the students. For holding CET, advertisement was given in
leading national level newspapers and Employment News. The University strictly follows
the reservation criteria prescribed by Government of India i.e. 15% for SC, 7.5% for ST
and 27% for OBC categories.

Students from SC and ST categories get concession of 70% in fee from Tamil
Nadu Adi Dravida Housing and Development Corporation Limited (THADCO).

4.13 SHIPPING CORPORATION OF INDIA LTD.

The Shipping Corporation of India Ltd., (SCI) was incorporated on 02.10.1961 by

amalgamation of Eastern Shipping Corporation and Western Shipping Corporation, with
an Authorised Capital of Rs. 35.00 Crore and Paid-Up Capital of Rs. 23.45 Crore. On
the day of amalgamation, the SCI's fleet stood at 19 vessels of 1.39 Lakh Gross Tonnage
(GT) and 1.92 Lakh tonnes Deadweight (DWT). Subsequently two more Shipping
Companies viz. Jayanti Shipping Company and Mogul Line Ltd. were merged with the
SCI in 1973 and 1986 respectively. The status of the SCI has changed from Private
Limited Company to Public Limited Company with effect from 18.09.1992.

Present Status

 During 2008-09 SCI took delivery of 3 vessels viz. 2 new built cellular container
vessels (mv SCI Chennai and SCI Mumbai of 4400 TEU capacity each on 22 nd
and 28th October 2008) and 1 new built very large crude carrier (VLCC - mt Desh
Viraat of 1,62,416 GT and 3,20,412 tonnes DWT on 29th October 2008).

 During 2009-10 SCI took delivery of 4 vessels viz. 1 newbuilt VLCC (Desh Vishal
of 1,62,412 GT and 3,21,137 tonnes DWT on 25th June 2009), 1 newbuilt Product
Tanker (mt Swarna Kalash of 29,845 GT and 47,878 tonnes DWT on 10th October
2009), 1 newbuilt (Resale) Product Tanker (mt Swarna Mala of 29,993 GT and
51.196 tonnes DWT on 25th January 2010) and 1 newbuilt Product Tanker (mt
Swarna Pushp of 29,845 GT and 47,775 tonnes DWT on 27th January 2010).
47
 During 2010-11 SCI took delivery of 9 vessels viz. 6 LR-I Product Tankers of
42,845 GT and approximately 73,368 tonnes DWT each, (Swarna Sindu, Swarna
Ganga, Swarna Brahmaputra, Swarna Godavari, Swarna Krishna and Swarna
Kaveri delivered on 23rd July, 5th August, 15th September, 27th September, 5th
October and 21st October, 2010 respectively) and 2 LR-II Product Tankers of
approximately 57,702 GT and 105,000 tonnes DWT (Swarna Jayanti and Swarna
Kamal delivered on 27th September, 2010 and 10th November 2010) and 1
Aframax Tanker of approximately 64,397 GT and 114,686 tonnes DWT (Desh
Mahima delivered on 27th October, 2010)

Fleet Strength:

Sailing through for nearly five decades, the SCI today has a significant presence
on the global maritime map. SCI is the country‟s premier Shipping Line, presently
owning a fleet of 78 vessels of 31.2 Lakh GT i.e. 54.8 Lakh tonnes DWT with a share of
around one third (in DWT terms) of the total Indian tonnage. SCI‟s owned fleet includes
Bulk carriers, Crude oil tankers, Product tankers, Container vessels, Passenger-cum-
Cargo vessels, Phosphoric Acid / Chemical carriers, LPG / Ammonia carriers and
Offshore Supply Vessels. The highly diversified fleet of the SCI includes modern and
fuel-efficient ships giving it a qualitative status as also a distinct competitive edge over
other fleet owners.

In addition, SCI manages and mans 53 vessels of approximately 3.0 Lakh GT and
2.0 Lakh tonnes DWT on behalf of India LNG Transport Companies (JVCs), Andaman &
Nicobar Administration, Union Territory of Lakshadweep Administration, Geological
Survey of India (Ministry of Mines), Ministry of Earth Sciences (Department of Ocean
Development), and Oil and Natural Gas Corporation (PSU). SCI‟s managed fleet includes
LNG Tankers, Passenger Vessels, Passenger–cum–Cargo Vessels, Research Vessels,
Ocean Research Vessel, Fishing & Oceanographic Research Vessel, Offshore Supply
Vessels, Seismic Survey Vessel, Well Stimulation Vessel, Diving Support Vessel,
Geotechnical Vessel and Multipurpose Support Vessel. Unlike conventional cargo
carrying vessels, these managed vessels perform specialized functions and require
expert skills for their operations.

The SCI has a consistent track record of making profits and has been earning
substantial returns on its investment. For the financial year 2008-2009, SCI recorded a
“Total Income” of Rs. 4564.5 Crores and a “Net Profit after Tax” of Rs. 940.7 Crores. The
Company paid a dividend of 65% on the increased paid-up share capital after issue of
bonus shares.

For the financial year 2009-2010, SCI recorded a “Total Income” of Rs. 3896.3
Crores and a “Net Profit after Tax” of Rs. 376.9 Crores. The Company proposed a
dividend of 50% on the paid-up share capital.

48
4.14 INTERNATIONAL COOPERATION

1. Multilateral Organizations/Agreements:

1.1. India has been the active participant at International Maritime

Organization (IMO) and is a member of its Council.

1.2. The International Labour Organization (ILO) has adopted a five-year action
plan for the promotion and implementation of the Maritime Labour Convention.
Ministry of Shipping is in the process of formulation a draft Cabinet note on
ratification of ILO Convention No. 185 on Seafarers Identity Documents (SID).

1.3. India has been contributing significantly to other multilateral

organizations/agreements like BIMSTEC, IOR-ARC, INSTC, etc.
2. Bilateral/Trilateral Merchant/Maritime Shipping Agreements

2.1. India has entered into bilateral/trilateral Merchant/Maritime Shipping

Agreement with Poland, Egypt, Pakistan, USSR, Czechoslovak Socialist Republic,
German Democratic Republic, Algeria, Turkey, Singapore, Russian Federation, Iran,
China, Croatia, Cyprus, Morocco, Ukraine, USA South Africa, IBSA (India, Brazil and
South Africa) and the Netherlands and similar Agreements with 15 other countries are

under negotiations. Bilateral and Multilateral Maritime agreements with other

countries would be improved upon for safeguarding and promoting Indian Maritime
Interests. The Indian Shipyards will be encouraged to import technology and designs
for new construction through joint venture or technical collaboration.

2.2. India has bilateral agreements for recognition of training and certificate of Indian
Seafarers with U.K., Iran, Italy and Malaysia.

2.3. With some countries like Iran, Greece, Mauritius, Netherlands, Norway and
Japan, Joint Working Group/Shipping Forum have been formed. India plans to use
these agreements/working groups/shipping forum to strengthen Indian
Shipping/Ship building industry and take forward cooperation with various countries
in the maritime sector.

2.4. An Inland Water Transit and Trade Protocol exists between India and Bangladesh
under which inland vessels of one country can transit through the specified routes of
the other country. The existing protocol routes are (i) Kolkata-Pandu-Kolkata, (ii)
Kolkata- Karimganj- Kolkata, (iii) Rajshahi-Dhulian-Rajshahi,(iv) Pandu-Karimganj-
Pandu. For inter-country trade, four ports of call, Haldia, Kolkata, Pandu, Silghat and
Karimganj in India and Narayanganj, Khulna, Mongla, Sirajganj and Ashuganj in

49
Bangladesh have been designated in each country. The protocol has been renewed
upto 2011 in March, 2009 in a bilateral meeting at Dhaka. The proposed NW-6
(Lakhipur to Bhanga stretch of Barak River ) would extend the protocol route upto
Lakhipur in south Assam and thereby connectivity to other North-East states.

2.5. Ministry of External Affairs (MEA), Govt. of India has entered into a Framework
Agreement with the Govt. of Myanmar during April 2008 to facilitate implementation
of the project. A Detailed Project Report (DPR) for development of the Multimodal
Transit Transport system to the North Eastern states through Myanmar was prepared
by Indian Consultant M/s RITES during 2003.

3. Unilateral Agreements for recognition of training and certificates of Indian

seafarers.

3.1. India has unilateral agreements with Vicent/Grindanes, Dominica, Greece,

Georgia, Vanuatu, Brunei, Liberia, Marshal Islands, Kuwait, Bahamas, Qatar,
Barbados, Netherlands, Maldives, Japan, Belize, Jamaica, Isle of Man, Luxemburg,
Cyprus, Malta, Norway, France, Denmark, Ireland, Bangladesh, Ghana, Latvia,

Mauritius, Antigua and Barbuda, Vietnam, Australia, Singapore, Hong Kong, Panama
and Belgium for recognition of training and certificates of Indian Seafarers.

50
 CHAPTER – V
SHIPBUILDING AND SHIP REPAIR

5.1 The nodal responsibility of the entire Shipbuilding and Ship repair Industry vests
with the Ministry of Shipping.

There are 27 Shipyards in the country, 6 under Central Public Sector, 2 under
State Governments and 19 under Private Sector Undertakings. Further details are given
below :

Under Ministry of Shipping, Government of India

 Cochin Shipyard Limited, Cochin

 Hooghly Dock and Port Engineers Limited, Kolkata

Under Ministry of Defence

 Mazagaon Dock Limited, Mumbai

 Garden Reach Shipbuilders and Engineers Limited, Kolkata
 Goa Shipyard Limited, Goa
 Hindustan Shipyard Limited, Visakhapatnam

Under the control of State Governments

 Alcock Ashdown Co. Ltd., Gujarat

 Shalimar Works Limited, Kolkata, West Bengal

The Ministry renders technical advice and formulates policies on matters relating
to development of Shipbuilding and Ship repair industry and floating crafts industry
and also for indigenous construction of fishing vessels.

This Ministry has a scheme of giving grant-in-aid to educational and research

institutions for carrying out R&D activities in Shipbuilding. A budgetary provision of
Rs.2.80 crore has been earmarked in 2010-11 for R&D Schemes in Shipbuilding to be
taken up by IMU Visakhapatnam Campus National Ship Design and Research Centre,
Visakhapatnam (NSDRC), and Indian Institutes of Technology (IIT). R&D project by
NSDRC on Creation of Data Bank for Maritime Sector is nearing completion. A draft
report has been received by the Ministry. The R&D project by NSDRC on Setting up of a

51
Laboratory on Noise and Vibration Control has been completed. An amount of Rs. 15.00
lakhs has also been released by this Ministry in this financial year to IMU
Visakhapatnam Campus (NSDRC). Project on Control of Ballast Water Problem in Ships
through Design Development by IIT, Kharagpur and R&D Project on Feasibility Study
and Design of Shallow Draft Ore Carrier by NSDRC are also nearing completion. An
amount of Rs 14.09 lakhs has been released by this Ministry to IIT Kharagpur in this
financial year.. A new R&D project on Development of Standard Design for Coastal and
shot sea cargo ships by IMU has been sanctioned an amount of Rs. 65.00 lakhs has
been released by the Ministry to IMU Visakhapanam Campus.

This Ministry has another scheme on Conducting Studies for which grants-in-aid
are given by the Ministry. A provision of Rs.8.00 crore is available in BE 2010-2011.
An on going scheme “Imparting Training in Ship Design and Construction Supervision”
by NSDRC has also been completed and an amount of Rs. 15.00 lakhs has also been
released by this Ministry in this financial year for this project. .

Shipbuilding Subsidy Scheme:

Government has been operating a shipbuilding subsidy scheme for Central Public
Sector Shipyards intermittently since 1971 with some gaps and modifications from time
to time. Government of India had extended the Shipbuilding Subsidy Scheme, for both
export and domestic orders to all the Indian shipyards including private sector
shipyards with the approval of Cabinet Committee on Economic Affairs on 25.10.2002.
The broad features of the Scheme were as follows:

 30% subsidy was payable for all export orders irrespective of size and type but
limited to sea going merchant vessels of and over 80 meters in length for
domestic vessels.
 Prices to be determined by the global tender in case of domestic orders.
 In case of export orders obtained on price negotiation a “Price Reasonableness
Certificate” to be obtained from DG Shipping.
 In case of Public Sector shipyards, subsidy is payable on stage payments received
by the shipyard
 In case of Private Sector Shipyards, subsidy is payable after the delivery of the
vessel
 This Scheme was applicable up to 14th August 2007.

The above scheme had expired on 14th August, 2007 and liabilities had arisen for
the eligible shipbuilding orders contracts. In implementation of the decision of the
Government of India for liquidation of liability for payment of subsidy, this Ministry has
issued the modified guidelines dated 25th March, 2009 for liquidation of the liability for
payment of subsidy for ongoing eligible shipbuilding contracts entered by Central Public

52
 Sector shipyards upto 14th August, 2007, the date of expiry of the subsidy scheme and
eligible shipbuilding contracts signed on 25.10.2002 and thereafter by Non-Central
Public Sector Shipyards and Private Sector Shipyards upto 14th August, 2007, the date
of expiry of the subsidy scheme, to the shipyards who have applied to DG(Shipping) for
Price Reasonableness Certificate or Ministry of Shipping on or before 14th August, 2007.
The guidelines dated 25th March, 2009 have thereafter been modified by the Ministry
and modified guidelines have been issued on 29th September, 2009. In order to ensure
authenticity of the claims, this Ministry has also been issuing instructions from time to
time.

A budgetary provision of Rs 588.30 crore has been earmarked in this financial

year for shipbuilding subsidy to Non Central PSU shipyards and private sector
shipyards and till 31.12.2010 we have released subsidy of Rs.91.00 crores.

5.2. Cochin Shipyard Limited

Cochin Shipyard was incorporated in the year 1972 as a fully owned

Government of India Undertaking. In the last four decades the company
has emerged as a forerunner in the Shipbuilding and Ship repair industry.

Cochin Shipyard can build and repair the largest ships in India viz upto
1,10,000 DWT in Shipbuilding and 1,25,000 DWT in Shiprepair. The yard has
built two of India‟s largest Aframax tankers each of 95,000 DWT for the Shipping
Corporation of India Ltd and has successfully undertaken repairs to a number of
strategically important ships like the Aircraft Carrier of Indian Navy, Oil rigs of
ONGC etc. In recent years Cochin Shipyard has been successful in gaining a
foray into the world shipbuilding market. These export orders are from
internationally renowned companies in Western Europe and USA. The yard is
also constructing the prestigious Aircraft Carrier for the Indian Navy.

Cochin Shipyard trains graduate engineers to become marine engineers who later
join ships, both Indian and Foreign as 5th Engineers

Capital Structure:

Authorised and Paid up Share Capital of the Company (as on 30.11.2010) are Rs
250 Crores and Rs 192.42 Crores respectively.

53
Despite global economic crisis CSL continued to perform well in the year 2009-10. The
gross income for the year was Rs 1334 Crores as compared to Rs 1360 Crores for the
previous year. The Profit Before Tax (PBT) for the year improved by 34% and

stood at Rs 331.25 Crores as against Rs 247.63 Crores in the previous year. The Net
Profit for the year 2009-10 was Rs 223 Crores reflecting an increase of 39 % as
compared to Rs 160 Crores for the previous year 2008-09. Inspite of a marginal drop in
turnover, the company could achieve a quantum jump in PBT and PAT in 2009-10.
Continued profitability of the company has resulted in an increase in Net Worth from
Rs 566 crores as on 31st March 2009 to Rs 680 crores as on 31st Mar 2010.

The company could achieve a total shipbuilding turnover of Rs 622 Crores as on

30th November 2010 against Rs 1012 Crores for the year ended 31st March 2010. During
the year 2009-10 the company delivered five offshore support ships to various
international owners located at Norway, Germany and USA. The prestigious IAC project
is also proceeding on schedule with the company completing a large portion of hull
block fabrication and erection in the building dock during 2009-10.

On the shiprepair front, CSL achieved a turnover of Rs 122 Crores as on 30th

November 2010 as against Rs 236.36 Crores for the year ended 31st March 2010. Major
shiprepair projects undertaken by CSL during the year 2009-10 include Normal Refit of
INS “Viraat”, Extended Short Refit to INS “Tarangini”, Conversion to RV “Sindhu
Sankalp”, Medium Refit of INS “Nireekshak”, Repairs to GTV “Samudra Sarvekshak”
and Short Refit of INS “Jyoti”.

5.3 HOOGHLY DOCK & PORT ENGINEERS LIMITED, KOLKATA

Hooghly Dock & Port Engineers Limited (HDPEL), situated at

Kolkata, is one of the oldest shipyards in India. It was established in
1819 in the private sector known as Hooghly Docking & Engineering
Company Limited. On merger of the Port Engineering Works with Hooghly
Docking & Engineering Limited, the Hooghly Dock & Port Engineers
Limited was formed by an Act of Parliament titled “The Hooghly Docking
and Engineering Company Limited (Acquisition and Transfer of
Undertakings) Act, 1984”. The take over of the shipyard by the
Government of India was expected in National Interest primarily for
utilizing the available infrastructure and increasing the capacity for
shipbuilding. The nationalized Company had remained with the Ministry
of Industry till 27the July, 1986 and was thereafter transferred to the
erstwhile Ministry of Surface Transport (now Ministry of Shipping)
54
 The Company has two production units at Salkia and Nazirgunge in Kolkata.
Both the units have potential for construction of various types of ships, tugs, crafts,
dredgers, floating dry docks, fire float, mooring launches, fishing trawlers, pontoons and
sophisticated vessels like offshore platform, supply-cum-support vessels, multipurpose
harbour vessels, grab hopper dredger, lighthouse tender vessels and oil pollution
control vessels.

HDPEL has the capacity to build vessels of about 400-500 passengers cum 100
ton cargo carrying capacity and also 300 ton capacity Cargo Vessel. The Company also
undertakes repair of vessels at KoPT dry docks from an outfit adjacent to Kidderpore
Dock Complex of Kolkata Port.

HDPEL has built 105 vessels, dredgers, barges etc. for various Port Trusts,
Andaman & Nicobar Administration, DGLL, Indian Navy, Oil & Natural Gas
Commission. In addition to this, the Company has also undertaken repairs of more
than 400 vessels for various organizations.

CAPITAL STRUCTURE

The Authorized Share Capital of the company as on 31st March 2010 stood at
Rs.30.00 crores. The Paid-up Capital as on 31st March 2010 was Rs.28.61 cores.

PRODUCTION :

During the year production of Rs.939.06 lakhs including ship repairing was
achieved against Rs.348.09 lakhs in the last year. Summarized position of production is
furnished below :-

FINANCIAL POSITION

During the year 2009-10, the Company has recorded an operating Loss of
Rs.1155.05 lakhs before charging depreciation and interest as compared to operating
Loss of Rs.1213.65 lakhs in the previous year.

The Company has suffered a loss of Rs.5540.30 lakhs principally due to time
over-run in respect of the Vessels under construction and huge interest burden of
Government and other loans. The interest on GOI Loan provided during 2009-2010 is
Rs.4277.30 lakhs.

NET WORTH

Since HDPEL continued to incur loss during the year 2009-10 its net worth
which was Rs. (-) 503 Crores as on 31.3.2009 dropped further to Rs. (-) 559 Crores as
on 31.3.2010.

55
MAN POWER

As on 1.4.2009 the total strength was 605 comprising 51 Officers, 119

Supervisors and Staff and 435 Workers and Sub-Staff. As on 31.3.2010 the total
strength of employees became 549 comprising 60 Officers, 113 Supervisors and staff
and 376 Workers and Sub-Staff.

VOLUNTARY RETIREMENT SCHEME

Since introduction of VRS in 1991, 949 nos. of employees have retired

voluntarily from the services of the Company till 31st March, 2010,

The shipyard has primarily undertaken following main activities during the year
2010.

i) 400 Passenger-cum-100 Ton Cargo Vessel

Formally, the vessel was handed over on 3rd April, 2005. Delivery Protocol,
however, has not been signed by A & N Administration. Repeated and continuous
persuasions are being made from HDPEL‟s end. But till date no positive response is
received from A & N Administration.

ii) 2 Nos. Self Loading Cargo Vessels

The Order was received from IWAI for Construction of 2 Nos. Self Loading
Cargo Vessels at a contract price of Rs. 4.35 crores each. The construction work of the
vessel was initially delayed due to difficulties in finalizing tender for off-loading the
design and drawing. The same had been sorted out. Subsequently, one vessel has
already been delivered to IWAI during May, 2009. The other one is in the advanced stage
of construction and scheduled to be delivered by March, 2011.

iii) 1 No. Floating Dry Dock

The order was also received from IWAI for construction of 1 No. Floating Dry
Dock at a cost of Rs.8.73 crores (plus cost of steel work beyond 787 MT and upto 1000
MT plus cost of crane and davits). HDPEL submitted the revised price of Floating Dry
Dock at Rs. 14.50 crores. Subsequently, as advised by IWAI, NSDRC vetted the price at
Rs.13.52 crores. HDPEL has sent its acceptance letters and waiting for final decision
from IWAI. HDPEL has also informed IWAI that HDPEL is ready to commence work
immediately on receipt of final confirmation from IWAI. The issue is yet to be settled
between HDPEL and IWAI.

56
iv) 1 No. Hydraulic Surface Dredger

The order for 1 No. Hydraulic Surface Dredger was received from IWAI. But no
progress on the vessel could be carried out since September,2004 as IWAI desired to
modify the design of the Dredger subsequently. Clearance for construction of the vessel
was received in May,2005. The construction of the vessel is under progress and

the vessel with her machinery and equipment has been launched. The
expected delivery of the vessel is by Mar‟2011.

v) 6 Nos. Work Boats from IWAI

The order was received from IWAI for construction of 6 Nos. Work Boats at a
contract price of Rs.28.64 crores. The agreement has been signed in Mar‟2008. At
present the vessels are under construction at both Nazirgunge and Salkia Works.
Expected delivery of 1st two vessels in May‟2011, 3rd and 4th vessel in June‟2011 and last
two vessels in July‟2011.

vi) 4 Nos. 1000 Ton Fuel Barge for Indian Navy

The contract for construction of 4 Nos. 1000 Ton Fuel Barge has been signed
in the month of March‟08 at a contract price of Rs.96.118 crores. Effective date of
contract starts from receipt of 2nd stage payment (1st stage payment could not be
claimed ) which has been received in December,2008. The revised delivery schedule of
the 1st vessel is in the month of January‟2012 and subsequently at an interval of 3
months thereafter for the balance vessels.

57
 CHAPTER – VI

DIRECTORATE GENERAL OF LIGHTHOUSES & LIGHTSHIPS (DGLL)

In the vast ocean, a mariner is not sure of his position unless he is guided/helped by
some signal from the land/space. DGLL provides service to enable the mariner to know
his position with respect to a fixed point on the land with the help of Visual Aids to
Navigation such as lighthouses, light vessels, buoys, beacons and Radio Aids to
Navigation like Differential Global Positioning System (DGPS), Radars, Radar Beacons
(Racons), Automatic Identification System (AIS) etc.

Directorate General of Lighthouses & Lightships (DGLL), located in Noida, is

headed by the Directorate General of Lighthouses & Lightships, who advises the
Government of India in the matters relating to Lighthouses. DGLL provides service to
enable the mariner to know his position with respect to a fixed point on the land with
the help of Visual Aids to Navigation such as lighthouses, light vessels, buoys beacons
and Radio Aids to Navigation like Differential Global Positioning System (DGPS, Radar
Beacons (Racons), Automatic Identification System (AIS) etc.

The Lighthouses are categorized into two types, General Lighthouses or Local
Lighthouse depending upon the marine traffic they serve. The General Lighthouses are
intended to serve the purpose of general navigation along the coast of India. These are
declared “General” by the Central Government by Notification in the official gazette. The
administration, maintenance and up-keep of general Aids to Navigation are the
responsibility of the DGLL.

The Local Lighthouses serve the purpose for navigation of marine traffic in the
post areas and approaches to harbours and narrow waterways. The maintenance and
management of local aids to navigation is the responsibility of the local Authorities like
Maritime State/Boards/Major Ports/Minor Ports. However, as per the Lighthouse Act,
Directorate General of Lighthouses & Lightships inspect local aids to marine navigation,
makes such inquiries in respect of management of these local aids to navigation and
suggests ways for their improvement.

58
 Presently Directorate General holds inventory of 179 General Lighthouses, 1
Lightship, 23 Differential Global Positioning System (DGPS), 64 Radar Beacons
(Racons), 21 Deep Sea Lighted Buoys & 2 Wreck Marking Buoys.

National Maritime Development Programme (NMDP)

The Directorate is implementing seven schemes at a total cost of Rs

500 crore, as part of the NMDP Programme of the Ministry of Shipping.
11th Five year Plan.

The 11th plan outlay (2007-12) of the Directorate is Rs 150 crore.

The spill over schemes, consisting of 13 projects, is amounting to Rs
51.60 crore and new schemes consisting of Rs 98.40 crore (23 projects).
Annual Plan 2010-11

An outlay of Rs. 60 crore is approved during the current financial

year 2009-10. Important schemes under implementation are:
(i) Establishment of Vessel Traffic Service in Gulf of
Kachchh at a cost of Rs. 165 Crore.
(ii) Establishment of National AIS Network (Rs.75.20 crore).

iii) Automation of Lighthouses in Cochin, Chennai,

Vishakhapatnam & Kolkata Lh Distt. (Rs.30.45 Crore)
(iv) Automation of Lighthouses in Port Blair Lighthouse district.
(Rs.6.52 crore)

(v) Establishment of new Lighthouses at Chilka (Orissa Coast),

Rava (Andhra Coast),
Barua (Andhra Coast), Maipura (Orissa Coast)

(vi) Establishment of five lighted beacons in A&N Islands at Sister &

Tries Reliability Aids to Navigation are meant for safe navigation of the
ships and the Directorate adds maximum impetus to their reliability. In
this direction, sufficient redundancy has been incorporated but the
Directorate has taken up the Automation of the Lighthouses so that the
status of equipment is instantaneously known and corrective measures
are taken. The Directorate has carried out automation of Lighthouses in
Jamnagar and Mumbai Lighthouse District. Presently the work of
automation of Port Blair is in progress. In the next phase, by 2012, the
Directorate has planned to complete the automation of the entire region.
59
 CHAPTER-VII

INLAND WATER TRANSPORT

7.1 Inland Water Transport (IWT) mode is cost effective, fuel efficient and climate
friendly mode of transport for bulk cargo and over dimensional cargo. However,
development of IWT infrastructure remained neglected for long and consequently it does
not have significant modal share in transport mix. Efforts are now being made to
develop this mode by providing and maintaining basic infrastructure.

Only those waterways which are declared as National Waterways (NWs) by the
Act of Parliament come under the purview of Central Government while the other
waterways remain under respective State Governments. At present there are five
national waterways in the country namely the Ganga from Haldia to Allahabad (NW-1,
1620 km), the Brahmaputra from Dhubri to Sadiya (NW-2, 891 km), the West Coast
Canal from Kottapuram to Kollam with Udyogmandal and Champakara canals (NW-3,
205 km), the Kakinada-Pudducherry stretch of Canals with Godavari and Krishna rivers
(NW-4, 1095 km) and the East Coast Canal with Brahmani river and Mahanadi delta
(NW-5, 623 km). In addition, declaration of Barak River from Lakhipur to Bhanga
(121 km) as yet another NW is under consideration of the Ministry.

7.2. Inland Waterways Authority Of India (IWAI):

The IWAI was set up on 27th October 1986 vide Inland Waterways Authority of
India Act, 1985, for regulation and development of inland waterways for the purposes of
shipping and navigation. IWAI is primarily responsible for development, maintenance
and regulation of National Waterways. It also advises Ministry of Shipping on matters
related to IWT. IWAI has established the National Inland Navigation Institute at Patna
to impart training in IWT field so as to get skilled manpower for inland vessels and
undertaking various other activities in a professional manner.

7.3. Indo Bangladesh Protocol On Inland Water Transit And Trade:

An Inland Water Transit and Trade Protocol exists between India and
Bangladesh under which inland vessels of one country ply on the specified
routes of the other country. The existing protocol routes are (i) Kolkata-Silghat-
Kolkata, (ii) Kolkata-Karimganj-Kolkata, (iii) Rajshahi-Dhulian-Rajshahi and (iv)
Silghat-Karimganj-Silghat. For inter-country trade, five ports of call have been
designated in each country. These are; Haldia, Kolkata, Pandu, Silghat and
Karimganj in India and Narayanganj, Khulna, Mongla, Ashuganj and Sirajganj in
Bangladesh. This protocol is presently valid upto 31.3.2011.
60
 A meeting of Standing Committee of this Protocol was held on 8-9
August, 2010 at Dhaka and various issues regarding enhanced utilisation of this
mechanism were discussed and decisions taken.

7.4 CENTRAL INLAND WATER TRANSPORT CORPORATION (CIWTC)

INTRODUCTION :

The Central Inland Water Transport Corporation Ltd. (CIWTC) was incorporated
on 22ndFebruary 1967 by taking over all the assets of the erstwhile River Steam
Navigation Co. Ltd. (A Sterling Company) and liabilities to the State Bank of India and
Govt. of India under a Scheme of Arrangement, approved by the Calcutta High Court on
03.05.1967.

PRINCIPAL ACTIVITIES :

The principal activity of the Corporation is transportation of cargo by barges

through Inland Waterways in the country and through the routes identified in the
Protocol on Inland Water Transport between India and Bangladesh.

The Corporation also operates and maintains the biggest IWT terminals in the
country i.e. T. T. Sheds at Kolkata apart from the terminals at Karimganj and Badarpur
in Assam.

MAJOR ACHIEVEMENTS DURING THE YEAR 2010 –2011

 The Corporation has undertaken the salvage operation of a large no. of containers
and contaminated furnace oil from TIGER SPRING, a foreign vessel, which had
met with an accident in November, 2010 on River Hooghly on National Waterways
– I. For this, one oil tanker and two flotillas comprising of one tug and two dumb
barges each were deployed by CIWTC.

 First time after a gap of about a quarter of a century (25 years), tea was handled
at the Tea Transit Sheds, for which the terminal was initially built.

 During this year, bid with regard to 11 (eleven) vessels of the Corporation have
been found successful for Bare Boat charter hire for 5 (five) years (+ extendable
by 5 years) period.

61
 CHAPTER-VIII
CHARTERING
8.1 Chartering Wing (Transchart) in the Ministry of Shipping in accordance
with the Government policy/procedure is responsible for making shipping
arrangements for transportation of Government owned/controlled cargoes against
FOB/FAS imports of Government. The shipping arrangements are centralized with
the Chartering Wing. The services of the wing are also open to private sector.

8.2 The Chartering Wing makes shipping arrangements at internationally

competitive freight rates with the consent and prior approvals of the concerned govt.
department/PSUs and in the process gives cargo preference/support to Indian
Vessels without giving any price preference. This Wing also advises the concerned
Indenting Government Departments/PSUs/Projects on various aspects of shipping
and post shipping matters.

HIGHLIGHTS OF 2010-2011

8.3 During the period under report from January, 2010 to 31st December, 2010,
441 ships were finalized by Chartering Wing for shipment of total quantity of 282.57
lakh Mts of Government cargoes. The major cargoes handled during the year
were coking coal, crude oil, fertilizer, fertilizer raw materials, lime stone, iron ore,
steel materials, seawater magnesia, ballast cleaning machines and other
Liner/Project cargoes. Out of total 441 ships, 141 were Indian ships which carried
approximately 94.25 lakh Mt i.e. approx. 33.35%. The main reason for low share of
Indian vessels was due to inadequate availability of required type of vessels in Indian
fleet for carriage of various bulk cargoes and also low participation of Indian vessels
for covering the government cargoes due to availability of better alternate options.
However, all efforts were made to use available/suitable Indian vessels to the
maximum extent possible. The shipping arrangements were made as per the
requirement of indenting departments/PSUs and with their prior approvals.

8.4 Chartering wing has been successfully chartering vessels for the
shipment of urea from the port of Sur (Oman) to India from M/s. OMIFCO on account
of Department of Fertilizers fully meeting their requirement.

62
8.5 Chartering Wing also chartered specialized vessel for 30th Indian
Antarctica Research Expedition along with an Ice breaker as per the requirement of
the National Centre for Antartic & Ocean Rsearch ( NCAOR), Ministry of Earth
Sciences

8.6 The statement indicating the quantities of Government owned/controlled

cargoes for which the shipping arrangements were made by this Wing during the
period 1st January, 2010 to 31.12.2010 is placed at Annexure-I.

8.7 Chartering Service Charges.

Levying of 1% chartering services charges on freight / dead freight / demurrage

/ charter hire earned by Indian companies on vessel fixed through Chartering
Wing(Transchart) for carriage of import / export cargoes was made applicable from
Feb, 1993. Since then the earning on this account have already totaled up to 133.54
crore (upto 31.12.2010) which has been deposited in the Consolidated fund of India.

FREIGHT MARKET

The BDI (Baltic Dry Index) tracks rates to ship dry commodities and is one of the
leading indicators of global economic activity. It measures/gauges cost of shipping
raw materials coal, iron and other ores, phosphates, fertilisers besides grains and
animal feeds etc.

The BDI opened the year 2010) at 3140 on 4th January and moved to 4156 on 27th
May’2010(highest for the year) and touched the lowest level of 1700 on 15.7.2010.
On close of the year i.e. on 24th December, 2010 it stood at 1773.

Fluctuations every now and then mainly attributed to demand adjustments and port
congestions mainly at iron ore and coal handling facilities at Brazil, China and
Australia.

The study upward trend in the index during the year particularly after 2nd half of July
was mainly due to some improvement in economic activities which may not be a
precursor to a continuous recovery in the freight markets as new deliveries have
already started hitting the market which may depress the market in the coming years
given the same demand scenario world wide.

63
 As per market reports about 200 capesize bulkers, having a total shipping capacity
of about 1m tonnes per vessel, were supposed to be completed in 2010. This would
bring about an additional annual capacity of 200m tonnes. Besides the delivery of a
number of capes an additional capacity is expected due to delivery of various other
segments in the dry bulk tonnage namely Kamsamax, Panmax, Supramax and
Handymax etc. which will bring in additional capacity during the year 2011. The may
result in widening the supply demand gap and putting pressure on freight rates as
per analysts.

The tanker segment of the shipping market remained subdued and fluctuated
through the year 2010 due to seasonal variations in demand for various type of
tankers. BCTI/BDTI(Baltic Clean Tanker Index/Baltic Dirty Tanker Index) which
gives an indication of the market segment opened the year with 817/1024 on 4th
Januay,2009 and came down to 669/938 on 1st June 2010 and was at 759/1043 on
24th December’2010.

Oil consumption and oil trade have definitely not disappointed tanker owners in 2010,
the ton-mile growth seems to have been stronger.

The problem has been the very weak starting after the financial crisis, massive
deliveries of new buildings and the return of floating storage tankers to active
trading.

The weak market conditions are expected in 2011, not because oil consumption and
oil trade will drop but because the fleet growth will be too high to absorb the
demand. As per new building order book, out of 67 Aframax (LR2) tankers, approx.
55 tankers are expected to be delivered in 2011 (some slippage into 2012/some
cancellations expected). 20 tankers likely to be scrapped. So roughly 4-5% fleet
growth and feel the pressure on rates will be maintained in 2011.

The oil tanker market is by far the most difficult market to monitor, mainly due to the
fact that the long-haul business can quickly surface as well as evaporate triggered by
OPEC production dynamics, US trade or the seasonal requirement.

64
 CHAPTER-IX
TRANSPORT RESEARCH
The Transport Research Wing (TRW) renders research and data support
to the Ministry of Shipping for policy planning and formulation. TRW is the
nodal agency for collection, compilation and dissemination of information
and data on Ports, Shipping, Ship-building & Ship-repairing industry and
Inland Water Transport (IWT) at the national level. Apart from collection,
compilation and publication of transport data pertaining to ports, shipping
and inland waterways, it also scrutinizes and validates data received from
various primary/ secondary sources for consistency and comparability. TRW
is associated with review meeting on Port and IWT Sector and also with the
work on the policy for Maritime Sector covering Ports and IWT sectors.

Apart from publications, transport Research Wing coordinates with

various other organizations like Central Statistical Organization, National
Sample Survey Organization and State Government etc. Transport Research
wing is presently the nodal wing for Working Group on Ports & Shipping
under Secretary (Shipping) for National Transport Development Committee
set up by the Planning Commission.

The following publications have been released during the year:

I) Basic port Statistics of India – 2008-09

(i) Half Yearly update on Indian Port Sector for period ending 31st
March, 2010 and 30th September, 2010
(ii) Iii)Indian Shipping Statistics -2008
(iii) Statistics of Indian’s Ship-building and Ship-repairing Industry – 2007-
08 & 2008-09.
(iv) Statistics of Inland Water Transport -2007-08

The work relating to the preparation of publications “Basic port

Statistics of India – 2009-10”. “Indian Shipping Statistics 2009”, Statistics of
India’s Ship building & Ship-repairing Industry 2009-10” and “Statistics of
Inland Water Transport 2008-09” are in progress. The work of other
publications namely Half yearly update on Indian Port Section, Statistics of
Inland Water Transport 2008-09 and Indian Shipping Statistics – 2009’ is
likely to be completed by December, 2010.

65
 A chart showing the growth of Indian tonnage (as on 31st December,
2009) for coastal & overseas vessels is at annexure- IV. The cargo carried by
Indian overseas fleet during 2009-10 is given at annexure -V.

Working Group on strengthening of Major Port Statistics

Timely availability of correct data is vital for monitoring the trends

in the economy or performance of a sector and policy formulation. Trends
in cargo traffic also serve as a barometer of economic activity. Timely and
correct availability of data is of utmost importance as it can serve as a
barometer of economic activity. Timely and correct availability of data is of
utmost importance as it can serve as an early warning for future trends in
the economy well before any other macro parameter becomes available.
Thus is can provide vital clues to policy makers which can facilitate
appropriate policy correctives. Besides, standardized data can serve as
bench marks for comparisons and evaluation. This is more so in the case of
efficiency indicators like turn around time, pre-berthing detention etc. Also
there is a need for additional requirement of data and performance
indicators on account of changes in cargo composition and policy changes
during last one and half decade. Keeping in view these issues, the Ministry
of Shipping has set up a Working Group under the chairmanship of Adviser
(Transport Research) for Strengthening of Major Ports Statistics with the
following terms of reference:

(a) To look into the concepts, definition and methodologies followed by port
authority in compilation of sea-borne cargo & physical performance
indicators.
(b) To Suggest uniform procedures/methods for compilation and dissemination
of various physical and financial performance indicators to facilitate
comparison and benchmarking productivity and efficiency.
(c) To recommend/suggest efficiency/performance indicators relating to
container handling.
(d) To suggest time frame for timely compilation and finalization of port
statistics.

66
 CHAPTER-X

ADMINISTRATION AND FINANCE

10.1 Administration Wing of the Ministry of Shipping consists of Establishment Section,

General Administration Section, O & M Section and Cash Sections. The Administrative
Wing is entrusted with the service and administrative matters of 313 employees (Group
A, B, C & D) of this Ministry, House-keeping jobs and the drawing and disbursing of
salaries and other expenditure. Efforts are made to manage the various Cadres as per the
instructions and guidelines issued by Department of Personnel & Training, Union Public
Service Commission, Ministry of Finance and Department of Administrative Reforms
and Public Grievances, etc.

Special efforts have been made by the Ministry to ensure compliance of the orders
issued from time to time regarding reservation for SC/ST/OBCs to fill up vacant posts
in Chartering Wing and Development Wing of this Ministry. Information with regard to
the total number of Government Servants, separately for Secretariat and Non-Secretariat
side (Group wise) and representation of SC/ST employees in the Ministry is given in
Annexure VI and VII respectively.

With the introduction of e-Service in various Ministries/Departments as a part of 100

days Programme, the Ministry of Shipping made all efforts to make the project
successful. E-mail IDs were created in the NIC domain for each employee of the
Ministry and accordingly, their Unique Identification Number was created by the NIC.
Then the herculean task of converting the entire existing service books into the
electronic form was taken up. Ministry of Shipping having more than 300 employees
has achieved the target within the stipulated time.

Pension Papers of the retirees submitted to the Pay & Accounts Officer well in time and
the retirement benefits paid on the last working day of the retiring officers/officials.

A Welfare Cell also exists in the Ministry of Shipping which looks after all the welfare
measures activity of the officers/officials in the Ministry. The farewell
parties are organized by the Welfare Cell
of the Ministry to bid farewell to retirees and a Memento as well as a Gift is also
presented.

67
In the Ministry of Shipping various welfare measures in respect of welfare of women
employees of the Ministry were undertaken. A complaint Committee on Sexual
Harassment has been set up to look after the grievances of women employees relating to
sexual/gender based harassment.

To oversee the implementation of the Prohibition of Smoking in Public Places’ Rules,

2008 in the Central Govt. offices/Buildings, the Ministry of Shipping has constituted a
Committee for surprise checking in the Ministry.

A Recreation Club also exists in the building where indoor games facilities viz. Table
Tennis, Carrom etc. are provided for the entertainment of the employees. Apart from
this, gym facilities are also provided. A Treadmill, Cycling, Weight machines are
installed in the said gym. In addition to above, Cricket Team of the Ministry
participated in Inter-Ministry Cricket Tournament 2010-11 held in New Delhi.

Important Days of national Importance viz. Anti-Terrorism Day, Communal Harmony

Day, Sadbhavana Diwas, Vigilance Awareness Week, Red Cross Day, Red Cross Raffle
Draw, etc. were observed and “Pledge” taken by the employees of the Ministry of
Shipping. Contributions were also raised and collected towards “Flag Day”. The essays
competitions both in Hindi and English were conducted during Harmony Communal
Week /Vigilance Awareness Week. The participants are rewarded for their participating
in these events.

10.2 Setting up of Information & Facilitation Counter has always been

the policy of Government of India to take all possible initiatives to provide
effective and responsive administration so as to efficiently serve the
citizens when they deal with the Government. In order to create awareness
and give information to citizens some important material on various
subjects, which is useful for general public, is provided at Information &
Facilitation Counter (IFC) set up near the Reception which the general
public can avail of. During the year all the Ports, Attached Offices and
Public Sector Undertakings under the administrative control of this Ministry
have also set up similar IFCs at their offices under the supervision of Senior
Technical Director NIC of this Department. Queries received in person &
telephonically at the Information & Facilitation Counter (IFC) and all the
queries are promptly replied/dealt with. The computerized system
developed by NIC is operational in Information & Facilitation Counter.

68
10.3 Formation of Citizens’ charter In order to give up-to-date
information, promote accountability and improve the Public vision of this
Ministry including the attached/subordinate offices and public sector
undertakings under the administrative control of this Ministry, a Citizens
charter has been prepared in consultation with Department. of
Administrative Reforms and Public Grievances and has been uploaded on
the website of this Ministry.

10.4 Introduction of Change Management for Good Governance

In order to bring out good governance, this Ministry has been

implementing various training programmes with the assistance of National
Informatics Center (NIC) in Computers and Internet in consultation with
Department of Administrative Reforms and Public Grievances. DS
(Administration) has been designated as IT Manager of this Ministry to
monitor and carry out the agenda for e-Governance and good governance
including setting up of “Governance Knowledge Center” (GKC) in this
Ministry.

10.5 Departmental Record Room

The Departmental Records Room (DRR) is headed by the Chief Record

Officer and a Departmental Record Officer, along with a record in charge,
has been positioned, to assist in the management of records. The
Departmental Record Room has approximately 14,500 files in custody. As
custodian of the records the DRR has handled the following work:

Action on Recorded files:

(i) The recorded files received in bundles from sections/Desks are checked
as per provisions of Central Secretariat Manual of Office Procedure
(CSMOP), and those not found in order are returned to the
Sections/Desks concerned for rectification.

69
(ii) The files received as per Central Secretariat Manual of Office Procedure
are entered in the respective record Registers (Section-wise) segregated
year-wise, Head-wise and stacked in respective racks in a neat and
systematic position.

 Action on Review of Recorded files:

The files due for review during the year are identified in the
beginning of January every year and segregated in different bundles.
During the period, about 1500 files were reviewed and 200 files have
been sent to Sections/Desks for review.

10.6. Quarterly Executive Summary:

Necessary data relating to disposal of work was collected from various units
of the department and analyzed. In addition, on the direction of DAR&PG,
“Executive Summary for Secretary” is reviewed by Secretary on quarterly
basis and follow-up action is taken as a consequence of the review.

This Ministry has initiated the action and taken efforts to launch and
implement the e-Governance systems effectively in this Department
including attached and Subordinate offices like DMIS(Web-based file
tracking system), CPGRAMPS (Public Grievances Redressal System) and
Governance Knowledge Centre (GKC) etc. to promote accountability and
Citizen Centric Governance with the proactive support of NIC Cell in the
Ministry.

10.7 The grievance redressal set-up in the Ministry is headed by the Joint
Secretary (Ports) as ‘Director of Grievances’. Prompt action is taken on the
grievance cases by referring them to the concerned administrative Units,
Port trusts, PSU etc. for early redressal. Periodical review is carried out by
the Director of Grievances for early redressal of the pending grievances.

During the period grievances received from Department of Administrative,

Directorate of Public Grievances, P&PW and individuals were promptly
attended to and referred to the concerned officers for time-bound
redressal. Out of these 110 Grievances have remained pending and are
under active consideration at the end of the year.

70
10.8 CPGRAMS: In consonance with the thrust on transparency in the
functioning of the government, a cost effective monitoring software,
namely Centralized Public Grievances Redressal and Monitoring System
(CPGRAMS), for monitoring and disposal of Public Grievances cases has
been functioning in this Department. It has been implemented in almost all
the Attached/Subordinate offices of this Ministry to closely monitor and
evaluate the quality of disposal of Public Grievances regularly and minimize
the delays in decision making strategy. NIC has implemented CPGRAMS.

10.9 DMIS: Document Management Information system (DMIS) has been

installed and most of the staff and officers have been trained by Officials of
NIC. For effective utilization of DMIS, all the computers in the Department
are connected by Local Area Network (LAN). All Major Port Trusts,
Attached/ subordinate offices and Public Sector Undertaking of the
Department have also been requested to install this system with the
support of NIC in their organization. The reports pertaining to status of
PMO/VIP references generated by the System is being reviewed in the
weekly/monthly meetings taken by Secretary and other senior Officials.

10.10 WEBSITE

A website (http://shipping.nic.in) of the department has been

launched in NIC’s server to make it more informative and user friendly. The
website has been updated and redesigned from time to time.

10.11 ACCOUNTS AND BUDGET

ACCOUNTS AND BUDGET

The Accounts and Budget wings of the Ministry of Shipping are functioning
under the Pr. Chief Controller of Accounts. The office of the Pr. Chief
Controller of Accounts is inter-alia responsible for making all authorized
payments of the Ministry, Compilation of Monthly and Annual Accounts,
Conducting internal audit of all the units under the Ministry to ensure
compliance of the prescribed Rules, Rendering Technical advice to the Ministry
on Financial and accounting Matters, cash management and coordination with
the Controller General of Accounts, C&AG, Finance Ministry and other related
agencies.

71
The Pr. Chief controller of Accounts organization comprises of Pr. Chief
Controller of Accounts, Two Deputy Controller of Accounts, one Assistant
Controller of Accounts, Six Pay & Accounts Officers located as 3 in Delhi, 1 in
Kolkata, 1 in Mumbai and 1 in Noida. The Budget Section consists of one
Under Secretary (Budget).
The Pr. Chief Controller of Accounts office is Primarily responsible for
the following major tasks:-

1. Payments:

 Making Sanctioned Payments on behalf of the Ministry after

conducting presented pre-check of bills as per approved Budget.

 Release of authorization to other Ministries to incur the expenditure on

behalf of the Department.
2. Receipts:

 Budgeting, accounting and reconciliation of the receipts of Department

of Shipping.

 Monitoring the repayment of loans and interest thereof received

from State Governments and other PSU‟s. The payment on account of
Grants-in-Aid, Loan, Subsidy and equity to Public Sector
Undertakings, Port Trusts and International Maritime Organisation.
3. Submission of Accounts and Reports:

 Preparation of monthly accounts, Finance Accounts Annual

Appropriation Accounts, and Statements of Central Transactions and
their submission to the Controller General of Accounts, Ministry of
Finance, Department of Expenditure, Government of India.

 Monitoring of Internal Extra Budget Resources (IEBR) and its

submission to office of the CGA.

 Monitoring and submission of mandatory information as per Fiscal

Responsibility and Budget Management (FRBM) Act and Rules.

 Preparation of Management Information Reports based on accounting,

budget & audit data for submission to various authorities.

 Preparation of financial statistics on monthly basis regarding receipts

and expenditure for upload on Ministry‟s website.

72
4. Budget:

 Preparation and submission of Annual Budget Estimates and Revised

Estimates, re-appropriation of funds of the Department of Shipping,
Ministry of Shipping, Road Transport and Highways. Coordination
with Ministry of Finance and other Departments in all the budget
matters.

 Monitoring/disposal of all the Audit Paras and Observations made by

the C&AG of India (civil and commercial) and coordination with
Monitoring Cell of the Department of Expenditure, M/o Finance for the
„Action Taken Note‟.

5. Internal Audit

 Internal Audit/Inspection of the Ministry and Regional Offices under

Department of Shipping.

 Preparation of an Annual Internal Audit Report of the Department.

 Preparation of Internal Audit Manual is under process and is being

submitted for approval to CGA‟s office.

 Apart from normal Internal Audit work the work of Risk based audit is
being started. In this line CGA with the help of INGAF giving the
training to the officers as in the recent times in both Corporate word as
well as in the Public Sector Management, due to more public
consciousness and demand for value for money, the management in
both Private Sector and Public Sector in advanced countries are under
constant pressure to run their business more effectively, efficiently and
economically.

COMPUTERISATION OF ACCOUNTS:

With a view to eliminate the delay in compilation of Accounts and

to provide the information on expenditure accounts, on timely,
accurate basis the office of Chief Controller of Accounts at
present is implementing various software packages like
COMPACT, CONTACT, CPFM, E-Lekha etc.

73
 COMPACT:

Comprehensive software package for Expenditure Accounts covering

major accounting functions i.e. pre-check, GPF, Budget, Pension and
Compilation.

CONTACT: Used in Principal Accounts office for compilation of Monthly

Accounts.

CPFM: Contributory Pension Fund Management System for capturing the

pension contribution of Employees who joined Govt. Service on or after 01st
January 2004.

E-Lekha: A web based application for generating daily/monthly of MIS of

Accounting information.

E-Payment: A new Pilot Project of payment and receipts of Government

Departments through electronic media has been initiated by office of the
CGA. All the PAOs will soon implement the e-payment system to bring
out higher operation efficiencies, faster realization of funds and prompt
reconciliation of payment and receipts.

The Headwise Details of Receipts as per the Statement of Central

Transaction (SCT) for the last three year have been reflected in Annexure-
VIII. and the Details of expenditure for the last three years have been
reflected in Annexure – IX.

10.12 Outstanding ATNs

There are three outstanding ATN Paras on behalf of Ministry of Shipping as

listed below :-

i) Para 7.13 1 of 2006 – Unnecessary Supplementary grant.

ii) Para 6.10 1 of 2007 - Submitted to Audit for vetting after dully
signed by AS & FA.

iii) Para 7.3 1 of 2007 – Excess expd. over available provision.

These paras are outstanding as on date due to non receipt of proper replies
from the concerned Departments/ Wings. As and when the material in r/o
ATNs received, the ATN paras will be prepared for submission to DGACR for
vetting.

74
10.13 DEPARTMENTAL ACCOUNTING
ORGANIZATION

ACCOUNTING SET UP

10.13.1The accounting division of the Ministry of Shipping is

under the overall charge of the Pr. Chief Controller of Accounts
who inter-alia is responsible for the payments, accounting,
budget, internal-audit and cash management functions of the
Ministry of Shipping. The organisation comprises of the Pr. Chief
Controller of Accounts, one Under Secretary (Budget), Two
Deputy Controller of Accounts, One Assistant Controller of
Accounts, Six Pay and Accounts Officers, One Principal Accounts
Officer and other manning offices located at Delhi, Kolkata,
Mumbai and Noida. The cash branches of the Secretariat are also
working under the overall supervision of the Pr. Chief Controller
of Accounts.

10.13.2 The annual accounts of the Ministry of shipping in the

shape of the statement of Central Transactions, the
Appropriation Accounts and the Finance Accounts are compiled
and rendered to the Controller General of Accounts, (Department
of Expenditure), Ministry of Finance. Computer generated
monthly expenditure figures are also furnished to all the
divisions of the Ministry to facilitate monitoring of the pace of
expenditure on various programmes and schemes. The monthly
compilation of accounts and the receipt and payments are now
computerised in phased manner...

10.13.3 The Budget Division under the Pr. Chief Controller of

Accounts is involved with the preparation of the detailed
Demands for Grants relating to the Demands of the Ministry and
preparation of the Performance Budget. In addition, it
coordinates with the preparation of the replies of audit
observations of the Comptroller and Auditor General of India, the
Public Accounts Committee and the Inspection report.

75
 The budget of the Ministry of Shipping, is presented to the
Parliament in the form of following Demands for Grants.

10.14 Grant No. 86 – Ministry of Shipping.

Position of saving/excess in respect of above-mentioned grant

for the year 2009-10 has been reflected in Annexure-X.

Through an effective network of Pay and Accounts office, the

personal claims of the government employees i.e. Pension, Family
Pension, Gratuity, Provident Fund, CGEGIS and Leave
Encashment etc are being settled promptly.

 The internal Audit of the expenditure incurred by the

Ministry and its
 subordinate offices and the organization receiving Grants-
in-aid has been conducted during the year by this
organization.

 The Ministry of Shipping is maintaining two funds viz.

Depreciation Reserve Fund and General Reserve Fund for
providing certain services required to develop transportation
facilities in the country. (Annexure-XI)

76
10.15 VIGILANCE
The Vigilance Wing of the Ministry coordinates and supervises the vigilance activities within the
Ministry as well as in respect of the PSUs and autonomous bodies under its administrative
control. The Wing is headed by the Chief Vigilance Officer (CVO) of the rank of Joint Secretary.
He is appointed with the approval of the Central Vigilance Commission.

There are 33 attached/subordinate/PSU/autonomous bodies under the Ministry and each

organization has either part-time or full-time CVO. The part-time CVOs are appointed from
amongst the officers of the concerned organization in consultation/concurrence with the CVC.
The full-time posts of CVOs, wherever such posts exist, are filled-up from officers of organized
services through DOP&T.

Special emphasis has been laid on the role of preventive vigilance including simplification of
procedures and use of e-technology. etc. Special emphasis was laid on the strengthening of
vigilance machinery in various organizations under the Ministry of Shipping particularly the Port
Trusts. Punitive action has been taken wherever required in consultation with CVC against the
delinquent officials.

As a result of active monitoring and follow-up, a large number of cases were finalized during the
year.

During the Vigilance Awareness Week a pledge to eradicate corruption in all spheres of life was
administered to the staff and officers of the Ministryt. An essay competition was also organized.

Vigilance activities in various organizations under this Ministry are being reviewed periodically
through various returns and also through interactions with CVOs/Head of the Organisations.

77
10.16 RIGHT TO INFORMATION ACT – IMPLEMENTATION

Detailed information relating to obligations listed in Section 4 of the RTI (Publications of

Manuals) has been uploaded / hosted in the websites of the concerned organizations.

 For the implementation of the RTI Act, Ministry of Shipping has

exclusively created a new cell and an Information and Facilitation
Counter (IFC) at the Reception for the convenience of the public who
comes personally.

 In the Ministry of Shipping (Main Sectt.), we have

appointed/designated 8 CPIOs and 8 Appellate Authorities based on
the Wings, who are in the rank of DS/Director and JS and
equivalent respectively. A Transparency Officer of MOS has also been
appointed.

 Notifications indicating the appointment of CPIOs/ Appellate

Authorities under the Act have been published and uploaded/hosted
on the website of the Ministry of Shipping i.e. www.shipping.nic.in.

 Whenever a request is received from the public/citizen by the

CPIO/IFC, the same is passed/transferred to the RTI Cell, where
after the application is registered after ensuring that fee has been
deposited, thereafter the request is sent to the concerned
CPIOs/Appellate Authorities for ensuring that the desired
information is sent to the applicant within the time stipulated.

 Copies of the RTI Act and circulars received from DOPT on RTI are
being circulated promptly to all the organisations for compliance.

 Useful guidance material/guidelines are also being supplied to

CPIOs/ Appellate Authorities.

 An internal procedure has been established and circulated to all the

concerned CPIOs/ Appellate Authorities and all Sections for
guidance, while dealing with the requests/appeals from public
seeking information.

78
 All useful records are duly maintained.

 Registers in the format (F) are being maintained by all Sections

 Training on RTI Act has been/is being given to CPIOs of all the
organisations through IIPM, Calcutta, NIPM, Chennai and YASHDA,
Pune and to some through ISTM, Delhi.

 During the above period a total of 298 applications were received

either directly or by transferring and handled satisfactorily.

79
 CHAPTER-XI
OFFICIAL LANGUAGE

11.1 Progressive use in Hindi

In this Ministry, Hindi Section is working as a nodal agency for promotion and
development of Official Language. At present this section is working in supervision
of Joint Director (Official Language) with the help of an Assistant Director(Official
Language) and other employees. The work of this section is to implement of
Official Act, 1963, Rule 1976 and directions given by the Department of Official
Language in the Ministry and in all offices, undertakings, corporate and
autonomous bodies under the control of the Ministry. Every year Department of
Official Language issues Annual Programme to explicit implementation of all
respected provision in above act/rules, which is circulated among all sections and
offices in the Ministry and all offices, undertaking, corporate and autonomous
bodies under the control of the Ministry. Accordingly for compliance a work plan is
made.
11.2 Implementation of Section 3(3) of Official Language Act
During this period to ensure 100% implementation of Section 3(3) of Official
Language Act in the Ministry all document covered under this section have been
issued in bilingual form.
11.3 Implementation of Rule 5 of Official Rules
To ensure 100% implementation of Rule 5 of Official Language Rule in the Ministry
all letters received in Hindi have been replied in Hindi.
11.4 Basic correspondence in Hindi
Although regarding basic correspondence with ABC Region this Ministry still has to
achieve Official Language targets in comparison to previous year there is partial
addition and we have to achieve the targets by putting continuous efforts. This
section regularly receives the Quarterly Hindi Progress Report from our regional
offices and after receiving it gives guidance to resolve the laps and difficulties being
faced by them.
80
11.5 Training in Hindi/Hindi Shorthand/Hindi Typing
Keeping in view of the directions given by Official Language Department the
Hindi/Hindi Shorthand/Hindi Typing Training has been given to all
officers/employees in the Ministry.
11.6 Translation of Manuals/code/Course Literature
Translation work of all Manuals/Code/Course Literature in the Ministry has been
completed.
11.7 Arrangement of Bilingual Mechanical/Electronic Facilities
All computers installed in the Ministry have been provided bilingual typing facilities.
11.8 Official Language Inspection, Official Language Implementation and Hindi
Advisory Committee
As per directions of Department of Official Language in view to examine the
position of official language inspection of offices under the control of the Ministry,
corporate, public undertaking and autonomous body is conducted. During the
inspection a special meeting is held with high level officers of concerned office to
resolve their difficulties on Official Language. Recently two offices situated in Delhi
were inspected. Besides this, inspection of six offices in other states were also
conducted.
Regular Quarterly Meeting of Official Language Implementation Committee under
the chairman ship of JS(P) in the Ministry is held and this meeting Hindi
Implementation is regularly reviewed. Hindi Advisory Committee has been
reconstituted and a meeting was held on 23rd December, 2010.
11.9 Organising of Hindi Pakhwara and Hindi Workshop
Hindi Pakhwara was celebrated in the Ministry from 1-9-200 to 14-9-2010. This
year prime money of first, second and third is increased to Rs. 2500/- 2000/- and
1500/- respectively. During the Pakhwara Hindi Essay Writing, Noting writing,
Shorthand, Writing Competitions were held. In these competitions a good number
of officers and employees were participated. One workshop was also conducted. A
Hindi function was organized on 14-09-2010 and message of Home Affairs Minister
was read out and the Secretary(Shipping) awarded cash prizes to all 77 competition
winners.
81
11.10 Incentive Schemes
As per guidelines of Department of Official Language for progressive use of Hindi in
the Ministry incentive schemes are continued. To encourage basic noting and
drafting in Hindi during this year cash prize to six employees of department have
been given.
11.11 Purchase of Hindi Books
During the year as per standard of Department of Official Language sufficient
numbers of Hindi books have been purchased.
11.12 Rajbhasha Shield Yojna and Printing of Departmental Magazine “Nautarni”
On 23 December 2010 in the meeting of Hindi Advisory Committee, the awarded
Shields (Cochin Port Trust J.N.P.T as 1st, Lighthouse and Lightship, Mumbai Port
Trust and New Mangalore :Port as 2nd and DG Shipping, SCI, Cochin Shipyard, DCI
and Tutitcorin Port Trust as 3rd Shield ) under the Shield Yojna Scheme run by the
Ministry and 2nd issue of nautarni magazine also been published.

82
 ANNEXURE-I

(PARA 1.2.1)

MINISTRY OF SHIPPING

I. THE FOLLOWING SUBJECTS WHICH FALL WITHIN LIST 1 OF THE SEVENTH SCHEDULED TO THE
CONSTITUTION OF INDIA

1. Maritime shipping and navigation; provision of education and training for the mercantile marine.
2. Lighthouses and lightships.
3. Administration of the Indian Ports Act. 1908 (15 of 1908) and Major Port Trusts Act, 1963 (38 of
1963) and Ports declared as major ports.
4. Shipping and navigation including carriage of passengers and goods on inland waterways declared
by Parliament by law to be national waterways as regards mechanically propelled vessels, the rule
of the roads on such waterways.
5. Ship-building and ship-repair industry
6. Fishing Vessels Industry
7. Floating Craft Industry

II IN RESPECT O F THE UNION TERRITORIES

8. Inland Waterways and traffic thereon.

III IN RESPECT OF THE UNION TERRITORIES OF THE ANDAMAN AND NICOBAR ISLANDS AND THE
LAKSHADWEEP

9. Organisation and maintenance of mainland islands and inter-island shipping services.

IV OTHER SUBJECTS WHICH HAVE NOT BEEN INCLUDED UNDER THE PREVIOUS PARTS

10. Legislation relating to shipping and navigation on inland waterways as regards mechanically
propelled vessels and the carriage of passengers and goods on inland waterways.
11. Legislation relating to and coordination of the Development of Minor and Major Ports.
12. Administration of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948) and the
schemes framed thereunder other than the Dock Workers (Safety, Health and Welfare) Scheme
1961.
83
 13. To make shipping arrangements for and on behalf of the Government of India/Public Sector
Undertakings/State Governments/State Government Public Sector Undertakings and Autonomous
Bodies in respect of Import of Cargo on free on: Board/free along site and export on cost and
freight/cost insurance and freight basis.
14. Planning of Inland Water Transport.
15. Formulation of the Privatisation Policy in the Infrastructure Areas of ports, shipping and inland
waterways.
16. The development of township of Gandhidham.
17. Prevention and control of Pollution:
(a) Prevention and control of pollution arising from ships, shipwrecks and abandoned ships in
the sea, including the port area;

(b) Enactment and administration of legislation relating to prevention, control and combating
of pollution arising from ships; and

(c) Monitoring and combating of oil pollution in the port areas.

V. SUBORDINTE OFFICES

18. Director General of Shipping

19. Andaman, Lakshadweep Harbour Works
20. Directorate General of Lighthouses and Lightships
21. Minor Ports Survey Organisation

VI AUTONOMOUS BODIES

22. Tariff Aurhority of Major Ports (TAMP)

23. Port Trusts at Mumbai, Kolkata, Kochi, Kandla, Chennai, Mormugao, Jawaharlal Nehru (Nhava
Shevs), Paradip, Tuticorin, Visakhapatnam and New Mangalore
24. Dock Labour Boards at Kolkata and Visakhapatnam
25. Inland Waterways Authority of India
26. Seamen's Provident Fund Organisation

VII SOCIETIES/ASSOCIATIONS

27. National Institute of Port Management

28. National Ship Design and Research Centre.
29. Seafarer's Welfare Fund Society

84
VIII PUBLIC SECTOR UNDERTAKINGS

30. Shipping Corporation of India

31. Hindustan Shipyard Limited
32. Cochin Shipyard Limited
33. Central Inland Water Transport Corporation Limited
34. Dredging Corporation of India
35. Hooghly Dock and Ports Engineers Limited
36. Ennore Port Limited

IX INTERNATIONAL ASPECTS

37. International Maritime Organisation

X ACTS

38. Indian Ports Act 1908 (15 of 1908)

39. The Inland Vessels act, 1917 (1 of 1917).
40. Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948)
41. The Merchant Shipping Act, 1958 (44 of 1958).
42. The Major Port Trusts Act, 1963 (38 of 1963)
43. The Seamen's Provident Fund Act, 1966 (4 of 1966).
44. The Inland Waterways Authority of India Act, 1985 (82 of 1985).
45.The Multimodal Transportation of Goods Act, 1993 (28 of 1993).

85
86
 ANNEXURE-III
(PARA 8 )

STATEMENT SHOWING THE QUANTITIES OF CARGOES FOR WHICH SHIPPING

ARRANGEMENTS WERE MADE BY CHARTERING WING , MINISTRY OF SHIPPING

(1.1.2010 to
FOR THE YEAR 2010 31.12.2010)
NOS
OF VSLS QTY IN LAKH MT**

NAME OF CARGO IND FGN TOTAL IND FGN TOTAL

A- IMPORTS

a) DRY CARGO

FERTILIZER 23 48 71 7.99 15.53 23.52

ROCKPHOS - 01 01 - .35 .35

C.COAL/M.COAL 29 165 194 14.45 121.79 136.24

LIMESTONE - 11 11 - 4.75 4.75

MISC(LINER) 07 15 22 .161 .317 .478

IRON ORE 08 07 15 3.75 3.21 6.96

MOP - 08 08 - 2.40 2.40

LAM COKE

TOTAL 67 255 322 26.351 148.347 174.698

PERCENTAGE 15.08 84.92

b) LIQUID CARGOES

LPG/C.BUTANE
CRUDE OIL 74 45 129 66.6 39.96 106.56

TOTAL 74 45 129 66.6 39.96 106.56

PERCENTAGE 62.50 37.5

TOTAL IMPORTS (a+b)

PERCENTAGE

B) LINER CARGOES 1.28 .04 1.32

TOTAL 96.97 3.03

PERCENTAGE

C) EXPORT

GC SHEET

FUEL OIL

TOTAL

PERCENTAGE

D) COASTAL MOVEMENT

LIME STONE

PELLETS

TOTAL

PERCENTAGE

E) TIME CHARTER

TOTAL (A+B+C+D+E) 141 300 441 94.23 188.34 282.57

PERCENTAGE 33.35 66.65

88
 ANNEXURE-IV
(PARA 9)

Growth of Indian Tonnage(As on 31st December)

10000
9000
8000
Tonnage in Thousand

7000
6000
5000
4000
3000
2000
1000
0
1980 1985 1990 1995 2000 2005 2006 2007 2008 2009
Year
Coastal Overseas Total

89
 ANNEXURE-V

(PARA 9)

India's Overseas Trade during 2009-10 (In '000

Tonnes)
Indian
Type of Cargo Lines Foreign Lines Total
Cargo
Cargo(000 Percent Cargo(000 (000
tonnes) share tonnes) Percent tonnes)
General Cargo
Loaded 280 2.5 11022 97.5 11302
Unloaded 936 3.1 28816 96.9 29752
Total 1216 3.0 39838 97.0 41054
Container
Loaded 2129 3.7 54879 96.3 57008
Unloaded 1864 3.6 49662 96.4 51526
Total 3993 3.7 104541 96..3 108534
Dry Bulk
Loaded 6763 4.7 137343 95.3 144106
Unloaded 6343 4.6 130496 95.4 136894
Total 13106 4.7 267839 95.3 280945
POL/Product & Other
Liquids
Loaded 2271 3.4 65238 96.5 67509
Unloaded 35619 18.4 158340 81.6 193969
Total 37890 14.5 223578 85.5 261468
Grand Total
Loaded 11443 4.1 268482 95.9 279925
Unloaded 44762 10.9 367314 89.1 412076
Total 56205 8.1 635796 91.9 692001

90
 Annexure -VI
(Para 10.1.)

TOTAL NO. OF EMPLOYEES IN THE MINISTRY OF SHIPPING(MAIN SECTT) AND

NUMBER OF SCHEDULED CASTES, SCHEDULED TRIBES AND O.B.C.(
SECRETARIAT SIDE).

S.N Class Sanctio Total No. of % to No.of % to No of % to

o. ned no. of SC total ST total OBC total
strength emplo employ employ employ employ employ employ
yee in ees ees ees ees ees ees
positio
n
1 2 3 4 5 6 7 8 9 10
1. Group ‘A” 30 25 02 6.66 01 3.33 2 6.66
2. Group’B’(G 43 37 07 16.27 01 2.32 02 4.65
az)
3. Group 76 63 10 13.15 04 5.26 07 9.21
‘B’(Non-
Gaz)
4. Group ‘C’ 133 107 17 12.78 05 3.75 04 3.00
(including
Peon,
Daftery,
Safaiwala/F
rash)

91
 Annexure -VII
(Para 10.1)

TOTAL NO. OF EMPLOYEES IN THE MINISTRY OF SHIPPING AND NUMBER OF

SCHEDULED CASTES, SCHEDULED TRIBES AND O.B.C.( NON-SECRETARIAT
SIDE).

S.N Class Sanctio Total No. of % to No.of % to No of % to

o. ned no. of SC total ST total OBC total
strength emplo employ employ employ employ employ employ
yee in ees ees ees ees ees ees
positio
n
1 2 3 4 5 6 7 8 9 10
1. Group ‘A’ 21 17 01 4.76 - - - -
2. Group'B’(G 10 03 - - - - - -
az)
3. Group - - - - - - - -
‘B’(Non-
Gaz)
4. Group ‘C’ - - - - - - - -
5. Group ‘D’ - - - - - - - -
(including
Safaiwala/F
rash)

92
 Annexure-VIII
(PARA 10.14)
GRANT OF THE MINISTRY OF SHIPPING

Actual Saving
Grant No. & Supplem Total
Original Expendit
Name entary Budget
ure Unutilized Surrender

Revenue
1442.43 0.03 1442.46 829.20 67.41 545.85
Account
Grant
No. 86

Capital
508.10 0.04 508.14 401.81 4.08 102.25
Account

Total 1950.53 0.07 1950.60 1231.01 71.49 648.10

Source: Appropriation Accounts 2009-10.

93
 Annexure-IX
(Para 10.14)

HEADWISE DETAILS OF RECEIPTS AS PER THE STATEMENT OF

CENTRAL TRANSACTION (SCT) FOR THE LAST THREE YEARS

(RS IN CRORES)

REVENUE RECEIPTS

MAJOR HEAD 2007-08 2008-09 2009-10

1. 0021-Taxes on Income other Corporation Tax

3.54 4.84 7.81
2. 0045-Other Taxes & Duties on Commodities &
3.32 3.89 4.62
Services

3. 0049- Interest Receipts 58.03 298.51 11.71

4. 0050-Dividends & Profits 330.44 106.98 255.35

5. 0070-Other Administrative Services 0.00 0.00 0.00

6. 0071-Contribution & Recoveries towards

2.23 2.60 2.59
Pension & Other Retirements Benefits

7. 0075 Miscellaneous General Services 0.00 0.00 0.00

8. 0210-Medical & Public Health 0.08 0.08 0.16

9. 0216-Housing 0.24 0.24 0.18

10. 1051-Ports and Light houses 124.36 137.10 151.53

11. 1052-Shipping 53.68 57.31 61.40

12. 1056-Inland Water Transport 0.00 0.00 0.00

13. 1475 - Other General Economic Services 0.00 0.18 0.19

A REVENUE RECEIPTS * 575.92 611.73 495.54

94
 CAPITAL RECEIPTS

MAJOR HEAD 2007-08 2008-09 2009-10

1. 4000- Mislaneous Capital Receipts 0.00 0.00 40.00

2. 6858- Loans for Engineering Indst. 13.69 13.69 13.69

3. 7051- Loans for Port & Light Houses 65.88 77.63 26.24

4. 7056-Loans for Inland Water Transport 0.00 0.00 0.00

5. 7601-Loans & Advances to State Govt. 0.59 0.48 0.55

6. 7610- Loans to Govt. Servants 0.45 0.51 0.41

CAPITAL RECEIPTS ** 80.61 92.31 80.89

95
 ANNEXURE-X
(PARA 10.14)
MINISTRY OF SHIPPING
DETAILS OF EXPENDITURE FOR THE LAST THREE YEAR’S i.e. FROM 2007-08 TO 2009-10
2007-08 2008-09 2009-10
PARTICULARAS
Plan N.PLAN Total Plan N.PLAN Total Plan N.PLAN Total

REVENUE EXPENDITURE
- 9.69 9.69 - 10.52 10.52 -- 11.65 11.65
2049-Interest Payment
- 8.74 8.74 - 9.91 9.91 -- 15.66 15.66
2071-Pension Payment
- 0.09 0.09 - 0.02 0.02 - 0.09 0.09
2235-Social, Security & Welfare
2245-Releief on a/c of natural - - - - - - 0.86 - 0.86
calamities

2852-Industries 1.85 193.05 194.90 2.69 131.87 134.56 0.50 180.81 181.31

3051-Ports & Lighthouses 0.68 566.33 567.01 0.23 542.43 542.66 0.21 447.18 447.39

3052-Shipping - 115.27 115.27 - 32.13 32.13 - 30.57 30.57

3056-Inland Water transport 0.03 104.31 104.34 70.22 19.74 89.96 126.62 21.19 147.81

3451-Eco Services - 10.70 10.70 - 16.45 16.45 - 18.87 18.87

3601-Grant-in-aid to State Govt - - - - - - 1.06 - 1.06

3605-Technical & Economic - 1.15 1.15 - 1.53 1.53 - 2.09 2.09

Cooperation with other countries

TOTAL 2.56 1009.33 1011.89 73.14 764.60 837.74 129.25 728.11 857.36

CAPITAL EXPENDITURE
4858-Engineering Industries 16.78 - 16.78 13.20 - 13.20 -- -- --

5051-Ports & Lighthouses 60.37 156.90 217.27 219.17 12.50 231.67 299.54 (-)41.70 257.84

5052-Training & welfare 14.00 - 14.00 5.00 - 5.00 68.73 -- 68.73

Scheme

5056-Inlanmd Water Transport -- -- -- -- -- -- -- -- --

5075-Other Transport Services 139.22 -- 139.22 1.00 -- 1.00 3.33 -- 3.33

6858-Loans for Engineering 4.00 8.50 12.50 3.00 8.50 11.50 -- 15.20 15.20
Industries

7051-Loans for Ports & Light -- -- -- -- -- --

Houses
- - -

7052-Loans for Shipping -- -- -- -- -- -- - - -

7056-Loans for Inland Water -- -- -- -- -- --

Transport
- - -

7601-Loans and Advances to -- -- -- -- -- --

State Govt
- -

7610-Loans to Govt. servants -- 0.17 -- -- 0.24 0.24 -

0.32 0.32

TOTAL 234.37 165.57 399.94 241.37 21.24 262.61 371.60 (-)26.18 345.42

Grand Total 236.93 1174.90 1411.83 314.51 785.84 1100.35 500.85 701.93 1202.78

97

ANNEXURE-XI

(PARA 10.14)
 MINISTRY OF SHIPPING

Rs in crores

DEPRECIATION RESERVE FUND

Opening Balance as on 1.4.2009 65.56

Receipt during 2009-2010 9.00

Payment during 2009-2010 9.00

Closing Balance as on 31.3.2010 65.56

GENERAL RESERVE FUND

Opening Balance as on 1.4.2009 363.54

Receipt during 2009-2010 61.45

Payment during 2009-2010 61.45

Closing Balance as on 31.3.2010 363.54

98

ANNEXURE-XII
IMPORTANT AUDIT OBSERVATIONS
Scheme for Inland Water Transport
Inland Water Transport (IWT) is an eco-friendly, economically
Viable and fuel efficient mode of transportation, but has also been developed to its
full potential in India due to various constrains. Development of IWT would have
numerous direct and indirect benefits, such as catalysing industrial growth and
economic activities in the hinterland along waterways, shift of cargo transport from
other modes of transport, and decongesting road and rail traffic.
An existing Centrally Sponsored Scheme for Development of Inland Water
Transport was, therefore, substantially revised in 2002 with provision of financial
assistance of 90 to 100 per cent grant-in-aid for various IWT activities – surveys /
studies, waterway development navigation aids, terminal facilities, procurement of
vessels for development and regulation etc. During 2003-7, 35 projects were
sanctioned in 15 States at a cost of Rupees 105.89 crore, against which funds of
Rupees 52.84 crore were released. The scheme was finally discontinued by the
Planning Commission in February, 2007.

Audit found that only 3 out of 35 projects were reported to have been completed,
while work had not even commenced in respect of 13 projects. One project was
foreclosed, while the remaining 18 projects were still incomplete. Further, our field
scrutiny of 16 projects in five States (Orissa, Himachal Pradesh, Madhya Pradesh,
Maharashtra and West Bengal) revealed that many projects had not achieved their
intended objectives, resulting in unfruitful expenditures.
As such, the objective of the scheme for development of IWT as an ecofriendly,
economically viable and fuel-efficient mode of transport remained unachieved.
(Report No. 9 of 2010-11)

99
Kolkata Port Trust
The port incurred an in fructuous expenditure of Rupees 1.45 crore due to delay in
timely action for condemnation of the outlived dredger.
Due to failure in taking timely action by the Port for recovery of licence fee, a party
under default continued to occupy the storage shed for more than 17 years which
led to an avoidable loss of Rs. 56.09 lakh on account of outstanding licence fee and
damages.
(Para No. 8.2 & 8.3)
(Report No. 23 of 2009-10)
Mumbai Port Trust
Failure of the port to resolve interdepartmental dispute resulted in non recovery of
Rupees 3.71 crore of rental charges.
(Para No. 8.5)
(Report No. 23 of 2009-10)
Paradip Port Trust
The port incurred avoidable expenditure of Rs. 19.12 core towards hire charges of
two high powered tugs hired for use at Single Buoy Mooring (SBM) of Indian Oil
Corporation Limited (IOCL) due to delay in commissioning of SBM by IOCL.
(Para No. 8.9)
(Report No. 23 of 2009-10)
Ministry of Shipping
Audit Report No. CA 9 of 2009-10
The Shipping Corporation of India Limited

The company incurred an avoidable loss of Rs. 17.82 crore due to delay in taking a
decision to terminate the loss making India – US IDX service
(Para 18.1.1)
100

Audit Report No. PA 10 of 2010-11

Hindustan Shipyard Limited and Cochin Shipyard Limited Ship Repair Activity in
Indian Dockyards
Hindustan Shipyard Limited (Hindustan Shipyard), Visakhapatnam was set up in
1941 and it established ship repair unit in 1971. Turnover from the ship repair
activity was varying from Rupees 87.90 crore to Rs. 144.13 crore against the total
turnover of the Company which was ranging between Rupees 225.30 crore and
Rupees 395.81 crore during 2004-05 to 2008-09, Cochin Shipyard Limited (Cochin
Shipyard) incorporated in March 1972 commenced ship repair operations in 1981.
The ship repair turnover of the Company was varying from Rupees 148.02 crore to
270.06 crore against the total turnover which ranged between Rupees 276.48 crore
and Rupees 1256.21 crore during 2004-05 in 2008-09. The performance audit of
ship repair activity of these companies for the period 2004-05 to 2008-09 was
conducted to asses’ efficiency and economy of their ship repairs operations and
their ability to expand the ship repair business in domestic as well as international
markets. The deficiencies noticed in ship repair activities in these companies were
as below :-
The turnover of Indian ship repair industry during the year 2004-05 to 2008-09
ranged between Rs. 316.07 crore and Rs. 490.38 crore. Though Hindustan Shipyard
and Cochin Shipyard being the leading shipyards in the country had major share
ranging between 73.74 percent and 91.36 per cent, there was no defined action
plan to capture market potential.
Out of Rs. 970.67 crore of ship repair expenditure by Shipping Corporation of India
during 2004-05 to 2008-09, Rs. 849.49 crore i.e. 87.49 per cent was spent for
repairs in foreign yards.
Repair business of Hindustan shipyard and Cochin Shipyard from foreign ships was
Rs. 44.25 crore (31 ships) and Rs. 60.23 crore (5 ships) respectively during this
period.
Hindustan Shipyard and Cochin Shipyard did not revamp or modernise the
infrastructure in tune with market potential.
101
Hindustan Shipyard received Rs. 8.27 crore from the GOI for modernization of ship
repair facility against which it could utilise only Rs. 1.19 crore even after laps of 5 to
46 months.
No benchmarks were fixed for key activities such as steel renewal, sand/frit
blasting, painting.
In case of Hindustan Shipyard 77 orders were reviewed of which the Company
executed 62 orders with time overrun ranging from 1 to 319 days which resulted in
loss of Rs. 10.91 crore to the Company. In Cochin Shipyard out of 177 orders 98
orders were completed with time overrun leading to a loss of Rs. 2.73 crore.
Realisation of the dues did not take place within the agreed credit period. In case
Hindustan Shipyard there were delays ranging between 6 and 882 days and in case
of Cochin Shipyard it was up to 350 after allowing the agreed credit period.

102