Shipping in muddy waters, but the worst may be over

Ammar Zaidi in New Delhi

After a brief period of buoyancy in 2001, the Indian shipping industry's fortunes came crashing down. The year 2002 saw a sharp fall in earnings, reflecting renewed pressure on the freight market.

For the first time almost every sector of shipping--tanker, bulk carrier, or container--is on a slide. The only redeeming feature is that the downslide, which began early this year, has been arrested and things are not getting any worse.

The delays in privatisation of national flag carrier Shipping Corporation of India made the scenario bleaker.

Unlike other public sector units up for divestment, there was no opposition from either the administrative ministry or the SCI employees.

One possible reason was the reversal in fortune of the shipping scrip on the bourses.

The government also toyed with the privatisation of Cochin Shipyard and Hindustan Shipyard Ltd, Viskhapatnam and ultimately decided that the time was not right.

Corporatisation of major ports too took a backseat with employees opposing separation of landowners. Private participation for infrastructure development and maintenance was also bitterly opposed.

India's thrust with big-time Liquified Natural Gas transportation business fell flat when Greenfield Shipping--a joint venture company of SCI and Mitsui OSK of Japan--had to put its first LNG carrier in spot market after Enron shut down its Dabhol Power Plant, for which the company was to ferry feedstock from the Middle-East.

However, a modest beginning was made in 2002 to improve connectivity to ports through the prime minister's ambitious National Highway Development Project.

Besides, a bulk terminal at Jawaharlal Nehru Port Trust is being converted into a container terminal to prevent transshipment of cargo originating in or destined for India through the ports of Colombo and Singapore.

-- PTI

2002: The Year That Was