Mr. Anand Sharma

GLG News by Mr. Anand Sharma, Director

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India is Planning More Seaports than its Trade and Economy can Afford

May 18, 2011

Analysis of:New port projects run into rough weather in Gujarat | www.livemint.com

There are more ports planned in India than the country actually needs.There seems to be a herd race for developing ports. The cumulative capacity of all port projects being discussed if added could surpass current global trade. Government is certain that some will be realized and in 2020 the capacity will be 2.2 bn tones, roughly 3 times current traffic and about 25% of current global trade. Is there something seriously wrong with Indian Ports Sector?

Deregulating Major Port will help more than regulating private ports in India

May 6, 2011

Analysis of:A regulatory threat to ports | www.livemint.com

The Government of India’s controlled major ports are at disadvantage. So in order to bring parity, it proposes to put non-major ports under regulation as well. In the name of bringing equality, this would be an act of penalizing high performer by forcing it to match low performer in the Indian ports sector. The dynamics of trade and parameters influencing choice of ports for a particular cargo is more complicated, and controlling tariff would only aggravate the problem not mitigate it.

Proposal to Reserve Coastal Shipping for India Built Ships would not be Accepted

June 23, 2010

Analysis of:Promotion of India-made vessels adds to INSA worries | economictimes.indiatimes.com

Ships in Indian coastal waters get first preference for employment if they match the commercial terms. The shipyards in India want to extend the guidelines to benefit local shipbuilders. They propose that Indian built ships should only be used for coastal trade and offshore oil & gas services sector. The proposal would certainly face stiff resistance from shipping companies and offshore oil & gas companies which charter the vessels and is unlikely to be accepted.

Cabotage law of India is too flexible to protect Coastal Shipping in India

March 15, 2010

Analysis of:India wants major oil refiners to favour domestic owners | www.tradewinds.no

State owned refineries namely Hindustan Petroleum, Bharat Petroleum , Indian Oil are being requested to charter local ships for coastal cargo. The request, if accepted, would benefit Shipping Corporation of India, Great Eastern and other of Indian origin over new entrants such as American Eagle Tanker, Aurora Tankers, etc. However, the cabotage law of India is quite flexible and does not provide enough teeth to the shipping sector, which could help them increase protection for themselves.

Indian Shipping Requests, Shipping Ministry Would Consider it Temporarily

October 26, 2009

Analysis of:Delhi signals willingness on shipping aid package | www.tradewinds.no

Shipping Industry requested Shipping Ministry for financial aid and cargo support. It is unlikely to be accepted in the current economic scenario.

Greenfield Shipyards in India, Should be Left to Private Sector

October 26, 2009

Analysis of:Government Changes Track on Plan to Build New Shipyards | www.livemint.com

Cochin Shipyard and Hindustan Shipyard have been asked to carry out feasibility studies and help build two new shipyards, but being government organisation they may not have enough freedom to do justice to the project.

ABG & Bharati Battle for Great Offshore is a Fight for Supremacy & Survival

October 14, 2009

Analysis of:Agarwal and Kapoor all set for Great battle | economictimes.indiatimes.com

ABG Shipyard is building 2 Jackup for Essar. Bharati Shipyard is building 1 Jackup for Great Offshore. Loosing Great Offshore by Bharati Shipyard is lose of future business segment, financial trouble and loss of a great customer. Winning Great Offshore by ABG Shipyard would not only restrict future prosperity of its immediate local competitor but also provide hand holding to Mr. Ruia and group companies, who are trying hard to establish their presence in Offshore Oil field Services Sector.

Indian Shipyard Faces Cancellation Threats Even in Offshore Segment

August 21, 2009

Analysis of:DOF Subsea scraps India newbuilds | www.upstreamonline.com

The risk of cancellation for delayed delivery is the worst nightmare for a shipyard in falling market. But the risk is increasing for Indian Shipyard. The owner walks away with advance, and shipyard has to work really hard to minimize loss. ABG Shipyard, Alcock Shipyard, Bharati Shipyard and Tebma Shipyard has setup facility to cater to higher segment and Pipavav Shipyard is in new business. It is difficult to streamline project management issues at a newer yard, leading to delayed delivery.

Are Governments capable to tow shipbuilding in current crisis?

December 29, 2008

Analysis of:Korean bailout | www.tradewinds.no

Shipbuilding is in difficult times because of falling trades, poor global economy outlook and over supply in shipping market. Credit crisis is just a trigger and is not fully responsible for it. In cases where global macro economic factors lead to crisis, to what extent local governments help sustain export oriented local industry is doubtful.

India’s Attractive Exploration Policy Is Unattractive For Companies

July 4, 2008

Analysis of:Western firms find fault with Indian oil round | uk.reuters.com

Indian Government provides tax incentives for discovering oil, but does not do the same for the discovery of gas. Differential taxation policy for discovering oil or gas is illogical and will discourage foreign investments in this sector.

Subprime Crisis Should Not Affect Shipping Cost

May 13, 2008

Analysis of:Shipbuilding Torpedoed by Subprime Causes Cost Surge (Update1) | www.bloomberg.com

There is large number of speculators who have placed new building orders at various shipyards. They have ordered ships, in order to sell it at a higher price. Currently 500 million DWT of ships are on orderbook. 7 billion tonnes of trade capacity get added for each million DWT of ships. Hence, close to 3.5 billion tonnes of trade capacity constituting 50% of current capacity is likely to be added by 2012. In this scenario, some orders getting cancelled may not disturb trade dynamics.

Irrespective of Scale, Size and Experience Companies with Older Boats would Show Poor Performance

May 6, 2008

Analysis of:Tidewater profit misses Street view, shares fall | www.reuters.com

Performance of companies with newer fleet will be better than the ones with older fleet. Newer vessels would command higher day rates, have higher utilization, and work on lesser operating costs. This would lead to Older Offshore Supply Vessels moving out of water gradually.

Proposed Restrictions on Iron Ore Exports by India could Change Global Supply Demand Scenario of Dry Bulk Ships

February 26, 2008

Analysis of:Ratan Tata urges PM to halt iron ore exports | www.livemint.com

Government of India may not ban iron ore exports as requested by Ratan Tata. Banning would lead to protectionist, but could impose higher export duty to discourage exports. Increasing iron export price, would force China to import ore from other alternative locations mainly Australia and Brazil. This would increase tonne-mile demand of dry bulk ships, even if demand for iron ore remains constant. This would change global demand supply scenario in dry bulk shipping.

Rising oil price is Blessing for Some

February 25, 2008

Analysis of:Transocean 4th-Quarter Profit Rises as Rig Rates Jump (Update5) | www.bloomberg.com

Rising oil price increases offshore exploration and production expenditure. This translates into larger business for offshore drilling company. With increasing oil price, drilling in deeper waters is viable. Transocean is currently drilling at water depth of 10,000 ft. This will increase to 12,000 ft in 2009. It might increase further if oil price rises further.

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