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Ports & Ships Maritime News

November 25-26, 2010
Author: Terry Hutson

Shipping, freight, trade and transport related news of interest for Africa

 

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TODAY’S BULLETIN OF MARITIME NEWS

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First View – HERMOD

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The giant crane barge HERMOD (73,877-gt) is currently in Cape Town Harbour for repairs, accompanied by two tugs, the RETRIEVER and HUSKY. Hermod is one of the world’s largest offshore semi-submersible crane vessels and was built in 1978 by Mitsui Engineering of Japan. She has an overall length of 154m, a width of 86m and a height to the waterline of 42m. Her draught varies between 11.5m and 28.2m when fully stabilised. Not surprisingly, when she sails on Friday this week shipping movements within the port will be disrupted, although Transnet National Ports Authority says these will be kept to a minimum. Picture by Ian Shiffman

 

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Safmarine profits from turnaround in first nine months of year

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Safmarine Meru. Picture by Chris Gee

Safmarine has announced a net profit of US$ 186 million based on a revenue over $ 2.4 billion for the first nine months of 2010.

With no year-on-year results available it is not possible to draw comparisons, other than acknowledging that results a year ago were unlikely to have been as healthy as now in 2010.

The UK’s Containerisation International reports that in comparison with Safmarine’s parent company, AP Moller-Maersk, the smaller division has generated only 7.75 US cents for every dollar earned during 2010 thus far, considerably less than AP Moller-Maersk’s 17.7 cents on the dollar. The article reports that the parent company recorded a net profit of $ 2.25 billion over the same period, based on a revenue of $ 19.5bn.

However, it is pointed out that this disparity reflects among other things the higher profitability of the east-west trades compared with Safmarine’s traditional north-south routes and that there are considerably different economies of scale in place in favour of AP Moller-Maersk. During the 9-month period Safmarine carried 606,479 FEU, compared with Maersk’s 4,793,522 FEU.

 

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Mercy Ship AFRICA MERCY refit passes halfway point

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The Mercy Ships’ hospital ship AFRICA MERCY arriving in Durban for a maintenance refit and engine replacement in September this year. Picture by Terry Hutson

The refit of the hospital ship AFRICA MERCY has passed the halfway point, with the 16,572-ton vessel having completed her dry docking, although some delays have set in and it is beginning to appear unlikely that the ship will be completed on schedule on 15 December. The main contractor is Southern African Shipyards.

During her time in dry dock six diesel-powered generators were replaced with four new MAN L21/31 heavy oil-fired generator engines – a move aimed at lowering operating costs.

The L21/31 was developed as a heavy duty engine that can run on heavy fuel oil with long maintenance levels, with reliability that has been proven on numerous installations in large ships, including cruise vessels. The motivation for this switch-over by Mercy Ships is that heavy fuel oil is a much less expensive option for a vessel that spends long periods in a port where it has to generate large amounts of its own power for hospital and medical services in addition to meeting the ship’s normal requirements.

Being the former Danish rail ferry DRONING INGRID (the rail tracks are still visible in the cargo hold), the ship was originally fitted with diesel engines and diesel-powered generators, but with refined fuel being much more expensive to use than heavy fuel, it was decided to replace the generators. It is in this respect that the ship is unusual in that she spends more time in port than at sea – often between three and six months at a time – and any saving in fuel costs while running the generators has a strong appeal to an organisation run on donations, goodwill and lots of prayer.

To replace the generators it was necessary to cut a sizeable ‘hole’ in the hull of the ship, near the position where these engines are housed, as there is no suitable access from ‘up top’ for such sizeable equipment. Once the new generators and other equipment were installed the hole was covered up again and steel plates welded back in place.

The replacement of the generators has also required the conversion of several ballast tanks for diesel fuel storage tanks, while some of the existing diesel fuel tanks are being converted to hold heavy fuel oil.

While in the graving dock the ship also underwent a hull cleanup followed by a new coat (or two) of special marine anti-fouling paint. The ship is also undergoing an extensive refit including the installation of certain new electrical equipment.

Unfortunately, with it appearing as if the overall refit is likely to finish somewhat behind schedule, plans for Africa Mercy to leave the Southern African Shipyards by 15 December will have to be revised. The idea was that the ship would move on that date to A/B berth, the site of a future passenger terminal for Durban, where she would be more visible to the general public. After a week or so the ship would then leave for Cape Town and a spell in the V&A Waterfront for the same purpose. Some of these plans may have to be rethought.

Later in January the ship will set sail for Sierra Leone, her next stop in the mission of bringing health care and medical treatment to the suffering.

The first Mercy Ships’ vessel to sail was the Anastasis – no stranger to South Africa. This was in 1982. Several other ships subsequently operated with the organisation in various parts of the world. In 2007 Anastasis was retired, but by then the Danish rail ferry Droning Ingrid had been acquired, renamed Africa Mercy and was being converted into an even larger hospital ship than Anastasis, with six operating theatres and wards for 78 patients including recovery and intensive care units – giving the Mercy Africa team almost twice the annual capacity of its predecessor. The hospital side of the ship includes specialist care involving up to 7,000 surgical treatments or operations a year, cataract removal and lens implant, tumour removal, cleft lip and palate reconstruction, orthopaedics, and obstretic fistula repair. The hospital has its own CT scan, X-Ray and laboratory services, plus a Nikon Coolscope which allows remote diagnosis, transmitted via an onboard satellite communication system.

All those that serve on board the Africa Mercy – about 450 in all – are volunteers who come from various parts of the world. This includes the ship’s master, the chief engineer and all ship’s crew, to the medical practitioners and staff and social outreach workers. While the refit has been taking place, the non-essential crew and medical staff have either returned home for a break, or are staying at Appelsbosch which is inland of Tongaat on the KZN North Coast. This was facilitated by the KZN Department of Health. Some of the Africa Mercy personnel are conducting clinics and other health care programmes in several parts of South Africa while the ship is under repair.

Incidentally, the author has seen a report in a US publication USA Today commenting that Royal Caribbean’s new cruise ship ALLURE OF THE SEAS “has the first Starbucks outlet to be housed at sea”. Not so, USA Today! The hospital ship Africa Mercy already has one which, as can be imagined, is a highly popular place on board ship. And it has been there for several years.

If anyone wishes to stay in touch with this mission, or perhaps become involved, make use of the international website www.mercyships.org.

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Africa Mercy approaches the ship repair yards at Durban’s Bayhead on arrival in port in early September 2010. Picture by Terry Hutson

 

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Mozambique needs strategic infrastructure and logistics plan for hauling coal

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The Nacala Corridor – one of the future options for Mozambique coal exports

The president of the Mozambican Association for Mineral Coal Development (AMDCM) said in Maputo that it was necessary to draw up a strategic plan for development of new infrastructure and logistics platforms with a view to transporting coal.

Due to the limitations of the Sena and Nacala railroads, in the short and medium term, Casimiro Francisco suggested that the strategic plan should consider opening up new ports and railroads exclusively to transport and handle coal.

Until 2025, the coal companies, which have so far invested US$ 1.4 billion in mining research and development, expect to transport 100 million tons of coal, which is more than the capacity of current transport channels.

To build the logistics platform, which will consist of a Moatize-Beira, Moatize-Savane or Chinde, Moatize-Nacala railroad, amongst other things, US$ 4 billion will need to be invested, Francisco said.

The president of the AMDCM also said that the sector needed a new legislative framework and a regulator to define the rules of the game, particularly in the area of cargo transport tariffs.

Recently the chairman of Brazilian mining company Vale, Roger Agnelli, complained that the concession-holder of the Sena railroad, Indian consortium Rites and Ircon, is proposing an excessively expensive tariff.

Francisco also said that the Sena line would meet transport needs for at least next year, in which around 2 million tons of coal are expected to be transported. (macauhub)


No reason to delay coal exports, says Moz minister

Mozambique’s Minister of Mineral Resources, Esperanca Bias, has said there is no reason to delay the start of coal exports from Moatize, in the western province of Tete, which are scheduled to begin in the first half of 2011.

Last week, Roger Agnelli, the chairperson of the Brazilian mining giant Vale, one of the companies with coal concessions in Moatize, raised the possibility that disputes over transporting the coal might delay the start of exports.

Cited in the independent daily O Pais, Agnelli said the problem concerned how much Vale should pay for the use of the Sena railway line, which would transport the coal from Moatize to the port of Beira.

The Sena railway, destroyed by the Renamo militants during the civil war, has been completely rebuilt and is under the management of the Indian company Rail India Technical Economic Services (RITES). But there is no consensus between the Indian company and Vale over the tariffs that Vale should pay.

Interviewed in Wednesday’s issue of the Maputo daily Noticias, Bias said that her ministry is working with the Transport Ministry to ensure that the movement of the Moatize coal begins on time.

“There is liaison and very strong work between the two ministries to ensure that all the infrastructures will be available when requested to start the movement of coal production from Moatize”, she declared.

She added that neither Vale nor RITES have approached the government about the tariff problem, or have warned the government that coal exports might not start on time. “What I can tell you, is that I have no knowledge of any postponement or delay in the start of moving the coal”, she said.

Transport Minister Paulo Zucula has warned that if Vale and RITES cannot reach agreement, then the government will be forced to intervene. He pointed out that there is nothing unusual about buyers and sellers disagreeing over prices.

“At no time will we put the interests of the state at risk”, he stressed, “and so we are following the negotiations, and if consensus cannot be achieved the government will intervene”.

Early this year, the Tanzanian government revoked the contract under which RITES was to manage the Tanzania Railways company. That management contract was supposed to last for 25 years, but was cancelled after just three. RITES was accused of failing to invest in the Tanzanian rail network.

So far, only the Sena line is available to take the Vale coal to port, and Vale is expecting, in the initial phase, to move about five million tonnes of coal a year along the line. Later, a new line is projected that will link Moatize to the northern port of Nacala, via southern Malawi – but this ambitious project will probably not be available until 2015.

A second company, Riversdale Mining of Australia, which also hopes to start production in 2011, favours floating the coal on barges down the Zambezi, but this is dependent on economic and environmental viability studies. (AIM)

 

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Gambia breaks off relations with Iran over arms shipments

Gambia has broken of diplomatic and economic relations with Iran over an arms shipment discovered in the Nigerian port of Lagos recently, that was believed to be destined for the smaller West African country. See PORTS & SHIPS for 1 November Arms shipment from Iran seized in Nigeria

Consisting of 13 containers listing building materials in the documentation, the arms shipment included rocket grenade launchers, grenades and mortars and ammunition. The containers had been shipped into Lagos from Iran on board the CMA CGM EVEREST and stored in Lagos for some months before being transshipped for Gambia. However, the shipment was seized by Nigerian customs and other officials before the transhipment could take place.

In terms of the breaking off of diplomatic relations, Iranian diplomats have been given 48 hours to leave the country.

This has been followed by reports of another arms cache being discovered by Nigerian authorities, which include small arms and military vehicles, bulletproof jackets and army boots. The vehicles consist of eight trucks painted in military style camouflage. The discovery was made in the port of Lagos.

There has been no confirmation as to where this latest shipment originated or its final destination.

 

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AGOA NEWS: Africa resisting the threat of EPAs

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AGOA states in Africa (highlighted)

African Trade Ministers recently criticised attempts by Europe to get them to sign Economic Partnership Agreements that would damage their economies, and they are proposing more beneficial alternatives.

The economies of Africa, the world’s poorest region, are under severe threat from free trade agreements that they are under pressure to sign with the European Union, the world’s richest region.

Under these economic partnership agreements (EPAs), Europe wants Africa to open up its economies to European goods, services and companies.

But the African countries are understandably worried their small industries and service operators will not be able to survive free competition from giant European companies, banks and commercial firms.

Moreover, African farmers will lose their markets to artificially cheap European food imports that are heavily subsidised, if agricultural tariffs are reduced or eliminated.

These concerns, and more, were expressed by African trade ministers at their meeting in Rwandan capital of Kigali earlier this month.

One minister described the EPAs as placing African countries into the mouth of a lion in a repeat of the colonial experience.

The Ministers adopted a declaration on the EPAs which made clear their opposition to the EU’s model of EPAs.

Also, in a show of regional unity, the African Union Commission and the continent’s five regional economic commissions covering Eastern, Central, Western and Southern Africa, published a position paper detailing the many problems the EPAs will cause.

They also proposed various ways for Africa to get out of its predicament, instead of signing the kind of EPAs that Europe insists on.

Some African Presidents are expected to voice the region’s concerns at a Europe-Africa summit in Tripoli next week.

The growing African resistance to the EPAs is the latest stage in a long saga which started when Europe decided to end the long-standing post-colonial arrangement which gave trade preferences for products coming from African, Caribbean and Pacific (ACP) countries.

The ACP countries did not have to give preferences for European products in return.

However, under the Cotonou agreement, these ACP countries would have to sign EPAs with Europe by the end of 2007 if they want to continue to enjoy trade preferences.

Three years after the deadline, few African countries have signed the EPAs because of their damaging effects.

The EC has threatened to remove the preferences from countries that have not signed up. These countries face a dilemma.

They face the pressure to sign in order to maintain their preferences and not lose some of their exports to Europe.

On the other hand, these countries resist signing because of the many adverse consequences.

Firstly, the African countries fear that their local industries and farms will be damaged because the EPAs require them to reduce their tariffs to zero for 80% of their imports from the EU.

Many local products may not survive or will lose market share to the cheapened European imports.

They are also against several other trade conditions, including prohibiting or restricting the use of export taxes.

Most African countries tax the exports of some of their raw materials so that local industries can use them for processing or manufacturing.

A ban on export taxes will prevent African countries from taking measures to add value to their primary commodities and to climb the value chain and industrialise.

The loss of import duties and export taxes will also reduce government revenue since these trade taxes are a large part of their income.

Secondly, the African countries are asked to open up their service sector, ranging from telecoms and retail trade to banking, to European firms.

In the EPAs with the Caribbean countries, they opened up 70% of their service sectors.

The smaller African service firms may be displaced by the big European companies.

Thirdly, the EPAs require liberalisation and deregulation of financial flows, investment and government procurement.

This will make it difficult for the countries to regulate capital flows when such regulation or capital controls are now recognised as important policy tools because of the present volatility of financial flows.

The opening of government procurement business to foreign firms (to be treated equally as locals) will affect the ability of the governments to give preference to locals, or to boost the domestic economy, because of the leakage to imports and foreign services.

Fourthly, the African Ministers are worried that the EPAs would adversely affect Africa’s regional integration process, since trade between countries in the region would be partly diverted to European products and services.

Fifthly, the EPAs would also make it more difficult for African countries to cope with the economic slowdown, since their trade balance with Europe is likely to deteriorate; and their ability to regulate capital flows, to boost domestic or regional demand and to earn revenue through trade taxes, will be affected.

What, then, can be done to avoid these damaging effects?

First, 34 of the 47 African countries involved in the EPAs are least developed countries (LDCs), and they do not have to sign the EPAs since their preferences will continue under an existing “Everything But Arms” scheme.

And secondly, the 13 non-LDCs can request that the EU provide them also with the “Everything But Arms” scheme, without their having to give preferences to the EU in return.

There is a good case, as the 13 African countries are also poor and vulnerable, similar to the LDCs.

There is a precedence. The United States provides a non-reciprocal preference scheme for Africa (known as AGOA), and the EU itself is also providing non-reciprocal preferences to Maldova and Western Balkan countries, which are better off than the Africans.

In any case, a good solution should be found because it would be hypocritical for European countries to pledge to help Africa with aid and to achieve the Millennium Develop¬ment Goals on one hand, and then to seek one-sided trade agreements that would severely damage their economic prospects on the other hand. Source AGOA

 

News continues below…
 

SA Government considers regulating coal exports to protect Eskom

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The South African government is seriously considering the regulation of coal exports to protect Eskom from local producers who get higher prices for their coal in India and China.

On Wednesday [last week], Mineral Resources Deputy Minister Godfrey Oliphant said that Eskom was suffering because low-grade coal was being sold to India and China because it was more profitable for the producers to export the coal than to sell it to Eskom. The producers then sold a very poor quality product to Eskom.

South Africa has very little high-grade coal and Eskom’s power stations have been designed for a low-grade product, but the quality of the coal it currently receives is too poor.

Oliphant said that in the coming months, government would look at amendments to the Mineral and Petroleum Resources Act. He was not sure whether it would be in the country’s interest to declare coal a strategic resource, he said at a conference on clean coal resources in Johannesburg.

Oliphant’s remarks were clearly in response to complaints from top Eskom spokespeople in recent weeks that the utility was struggling to meet the country’s electricity requirements because of inferior quality coal being delivered to its power stations. Eskom had blamed exports receiving preference.

Brian Dames, the chief executive of the electricity giant, recently said that Eskom was losing between 500 MW and 1,000MW a day of generation capacity because of the exceptionally poor quality of the coal.

On Wednesday Oliphant said that Eskom’s building programme meant the electricity giant would require 160m tons of coal a year by 2020, compared with the current demand for 122m tons. “Would we have enough coal to meet this demand?” Oliphant wanted to know.

Export prices are many times higher than the price that Eskom pays for coal in terms of its long-term contracts.

The long-term contract price currently stands at about R150 per ton, while export prices through the Richards Bay Coal Terminal (RBCT) are $102 (about R840 at Wednesday’s rand/dollar exchange rate) per ton.

Last year the terminal was struggling to export 61 million tons of coal, but this year it would might be possible to boost its export capacity to 65 million tons.

The total export capacity was currently 72 million tons, but within two years this could rise to 91 million tons, the Richards Bay Coal terminal capacity.

Three years ago, coal producers began to export coal to India, which required a great deal of low-grade coal because of the great number of power stations built for that quality in that huge country.

A year later, by the end of 2008, some 5% of the coal being exported through Richards Bay was sent to India. Today the figure is more than 30%.

A top official of one of the country’s biggest coal producers said on Wednesday that, before exports to India began, easily 100% of the coal out of Richards Bay was sent to Europe. But soon only some 30% would be destined for Europe and the rest for Asia – mainly India.

The view is that coal that would previously have been delivered to Eskom is now being shipped to India.

The chief executive of a smaller Eskom supplier told Sake24 that in some cases, inferior quality coal was being combined with Eskom-grade coal and exported.

Various large players in the industry however considered that Eskom managed its coal contracts too ineffectively, which was the real reason that the electricity giant was unable to generate electricity optimally.

It was because the calorific content of the coal fed into the power stations was too erratic, they reckoned.

One of the major suppliers said that, apart from its big suppliers, Eskom also had 21 small suppliers that continually delivered coal of varying quality.

This coal was unmixed and simply accepted by the power stations. This was the reason for ongoing losses in generation capacity, he said. Source: Mmegionline

 

Comments and Corrections

Readers’ Comment

Responding to the report on the threats posed by piracy in yesterday’s News Bulletin UK government warned of threat posed by piracy, readers suggest the following:

Hi
Take a leaf out of the 2nd World War and U boat menace.
(a) Fit local fishing boats / coasters / merchant ships with hidden high power weaponry and act as decoys.
(b) Convoy system. Surely a single north to south and another east to west route would suffice.
(c) As the Russians are suspected of doing, blow the pirates out of the water, unseen and quickly - end of subject.
Yours etc
Tony France


Capt Bill Shewell in the Western Cape writes:
As you have explained on the Barbarry attacks, with our very modern submarines on International surveillance in the Indian Ocean, the attacks would soon dry up.
The police do it world wide, the air patrols do it in Middle East, smugglers do it in drug operations, so why not under water seafarers do it, as done in both world wars – straight from the ‘Book on Old Fashioned Recipes’.
Yours etc
Bill Shewell


If you have any comment to make on this topic or any other report seen in PORTS & SHIPS, feel free to share them with readers – email your comments toinfo@ports.co.za

 

For the Record

Also in Wednesday’s PORTS & SHIPS we showed pictures of the cruise ship OCEAN PRINCESS and said that the vessel arrived on Sunday, whereas the ship actually arrived in Cape Town on Saturday 20 November and sailed at 5pm on Monday 22 November. Ocean Princess is currently (Thursday) in Durban.

 

Pics of the Day – HERMOD, RETRIEVER and HUSKY

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Dwarfed by her charge, the tug RETRIEVER (1749-gt, built 1982) shelters under the impressive bulk and overhang of the crane barge HERMOD shortly after arrival in Cape Town. Picture by Aad Noorland

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A broader view of the crane barge Hermod, with the tug Retriever nestling beneath and sister tug HUSKY over on the starboard side. Picture by Aad Noorland

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The two tugs RETRIEVER and HUSKY (1749-gt, built 1978), at rest in Cape Town harbour and now freed temporarily of their charge. The respite will be short – the group of vessels is due to sail this Friday, 26 November 2010. Picture by Aad Noorland

 

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