15 June 2011
 

Article

Cold Chains

As an emerging market with an economy which is developing at an exuberant and attractive growth rate, India faces a piquant situation in a strategically important sphere of its rapidly developing economy – the slow and poor development of the cold chain supply and logistics system in the country. Cold chains or what in effect is the cold supply chain, has often been scarcely understood or worse, misinterpreted, leading to parlous conditions in the economy which could stymie its growth. A burgeoning economy with global aspirations can hardly afford to be sidetracked by reasons which span the entire gamut from not having understood the cold supply chain system to callous neglect.

Natural Advantages
According to the Federation of Indian Chambers of Commerce and Industry, food wastage reached the incredible figure of `30,000 crore in 2010 (it has declined from the stratospheric level of `58,000 crore in 2004!). This despite the fact that India is the second largest producer of fruits and vegetables in the world, but with cold storage facilities available for only 10 percent of the produce. Industry sources disclose that the country is the fifth largest producer of eggs and the sixth largest producer of fish, but with an abysmal supply chain system, 35 percent of production is consigned with depressing regularity to the trash can. India has certain vital attributes and natural resources – it has 52 percent of the total land that can be cultivated as against 11 percent in the rest of the world and 20 diverse agro-climatic regions in the country. These advantages, if properly harnessed, could equip the country to feed not just its own people, but the rest of the world. A well-defined logistics and cold supply chain system working in tandem could power the country to this enviable position and also immeasurably energize its growth.

“Apart from rejuvenating its own economy, India could be the food basket of the world if we had an efficient cold chain supply system,” says Mr Pawanexh Kohli, Founder of CrossTree techno-visors and Senior Vice President, Arshiya International Ltd. “To be the food basket you have to export food to Europe, Dubai, Singapore, the US and maybe, one day, Africa and only the cold chain will allow India to expand its portfolio of food exports.”Mr Kohli received the Cold Chain Personality of The Year (individual) award at the KPMG-Supply Chain Leadership Council Summit Awards on December 3, 2010.

Huge Market
Increasingly, the consumption pattern of Indian consumers is changing swiftly with more customers consuming frozen food and vegetables. Malls and food courts across the country, even in Tier-II and Tier-III cities, stock abundant quantities of perishable food to cater to this ever-increasing market. But acute deficiencies in the cold chain supply system have prevented this nascent industry from fulfilling its true potential and growth.

The market for cold chain supply systems is estimated to balloon to US $ 9 billion by 2015 according to Mr Kohli, who apart from being a cold chain specialist, offers innovative advice with a few professional peers on the website www.crosstree.info. Their entrepreneurial vim has cleared many of the misconceptions about the industry which now stands on the threshold of growth. The industry, however, will have to clear the obstacles in its path before it can dream of unfettered growth.

Hard Realities
The cold chain industry’s dreams of proliferation have been turfed out by hard realities on ground. Says Mr Abhijit Upadhye, Senior Director-National Supply Chain, McDonald’s India: “There’s not enough demand for quality cold chains because high costs prevent usage of such facilities. A lot of companies are ready to compromise on such facilities. We are one of the few users of cold chains.”

But Mr Kohli cites deeper reasons for the malaise. He believes that the industry has been established “in a very fragmented and unstructured way” by small and medium enterprises (SMEs) and single entrepreneurs in a manner which has not permitted development of skill sets. “The ground work has to be laid out very carefully for any new industry which starts off,” argues Mr Kohli. “After all, even with the software industry it took 12-15 years before it reached the stage where an Infosys could happen. So similarly, the cold chain industry which at one level has been around for 25 years, but at another level, where we are talking about a structured cold chain industry with organized sourcing and moving of goods from one place to another, it has happened at a real scale for not more than four or five years. So this has not permitted any development of skill sets.”

The complicated nature of the industry has also hampered growth. In any other supply chain when a factory manufactures a product, the supply chain delivers it to the market, with an attractive price realization accruing to the product. The cold supply chain is the only supply chain which not only transports the value of the product, but actually affects the value realization of the product. This is due to the fact that the cold supply chain transports fresh products which have to be delivered in a particular time matrix, else the price declines. Defective supply chain Service Level Agreements (SLAs) and an inability to maintain required parameters force the price to slide further. “Any ordinary person who gets into the business,” notes Mr Kohli, discussing the subject with great fervor, “is suddenly affected by debit notes, and penalties because he did not realize the operational excellence that needs to be maintained. While the rest of the supply chain says, ‘I’m carrying boxes’, in the cold chain you need to understand the product.”

Poor Industry Knowledge
A further impediment to the development of cold supply chains has been the government’s inability to understand the industry. For the government, the growth of cold chains has been unfortunately linked with the construction of cold stores which are just a component in a complicated supply chain. Industry sources reveal that over the last 20 years the government has indulgently loosened its purse strings for the construction of cold stores. This has led to a proliferation of cold stores, especially in Uttar Pradesh and West Bengal. “Uttar Pradesh and West Bengal have above 50 percent of the cold storage capacity in India,” reveals Mr Pradeep Dubey, General Manager, Snowman Frozen Foods Limited,” but most of them are just single commodity stores. In UP, where 41 percent of the stores are located, most of them are used for storing only potatoes.”

The construction of cold stores cannot be arbitrarily equated with the development of the cold supply chain industry. “Look, anyone who sells anything knows that you need to move to the market,” remarks Mr Kohli candidly. “In the cold store, if you are going to store things long enough, it’s going to perish. And this is how the situation is in the cold chain sector, we have 12 percent of transport and 88 percent of storage when it should be the right opposite! You produce something, please move to the market, reach the consumer and sell it. Don’t store it, for God’s sake!”
Financial Incentives

The government appears to have read the script well and in the Budget 2011-’12 has attempted to make generous provisions for the cold chain sector. Some of the salient features of the Budget are that full infrastructure status with Viability Gap Funding has been announced for the industry. Customs duty to set up cold storages has been further reduced to 2.5 percent, while excise duty has been exempted on all cold chain equipment. Fifteen more mega food parks will be set up in the country (15 such parks were sanctioned in the last fiscal).
With the financial buffer of the budget, the mood in the industry appears to be reasonably upbeat. Mr Purvin Patel, Chief Operating Officer, Radhakrishna Foodland Pvt. Ltd, emphasizes that “new investments are coming in whether it’s in cold chains or movement of goods and products. There will be a good return on investment for the right business model, with the right clients and the right approach.” The government is hoovering up its investment in the cold chain sector and according to Mr Kohli (he is a member of the task force set up by the Centre and the Confederation of Indian Industry (CII) in 2006-’07 which is still active) is planning an investment up to Rs 8000 crore in the agri-business which includes the cold chain sector.

The government’s largesse, combined with its newfound sense of purpose and understanding of the sector, could mean that cream salad days are here for the cold chain industry in India.

The author can be reached at pamela@logisticsweek.com

NEWS ROUNDUP

Ports / Shipping

Shri Vasan Flags off Thoothukudi–Colombo Passenger Ferry Service

The Union Minister of Shipping, Shri G.K.Vasan launched the much awaited Thoothukudi–Colombo passenger ferry service at V.O. Chidambaranar Port in Thoothukudi, Tamilnadu today. He embarked the ship M.V. Scotia Prince and wished the crew and the passengers before flagging off the ship.

Speaking on the occasion, Shri Vasan stated that the event was a historic one for Indian Shipping, particularly for VOC Port and Tamilnadu, since it marked the revival after so many decades of the service started by V.O.C in 1907. He stated that this was a fulfillment of a long pending public demand and this would benefit people of both the countries, particularly the Tamil Population besides giving boost to cultural ties, tourism and trade. This service will help in transforming VOC Port and Thoothukudi into a hub for passenger ferry services and cruise shipping. He said that the government is also working on resuming the Rameshwaram-Talaimanar ferry service which was discontinued in the 1980s.


Shri Vasan Flags off India’s Firt Cruise Liner “M.V. AMET Majesty”

Thiru G.K. Vasan, Hon’ble Minister of Shipping flagged off M.V. AMET MAJESTY, India’s first cruise liner and onboard training ship in Chennai today.

On the occasion, the Minister stated that Cruise Shipping is one of the fastest growing segments in the leisure industry worldwide. The government is gearing up to increase the footfalls into India further in the coming years besides promotion of Indian flag cruises, including river cruises. The focus will be to showcase India as an attractive tourist destination for cruise tourists with its vast and beautiful coastline, virgin forests and undisturbed idyllic islands, rich historical and cultural heritage. The government also plans to ensure that the cruise shipping industry in India becomes internationally competitive and contribute to the economy in terms of generation of foreign exchange, income, employment and business opportunities.

The Cruise Shipping policy is already in place which permit 100% Foreign Direct Investment (FDI) in the Shipping Sector including Cruise Shipping. Besides, foreign flag Cruise ships/vessels have also been permitted to make coastal voyages between different ports of India in relaxation of the provisions of Section 407(1) of MS Act.

Speaking on the training of seafarers, the Minister stated that Indian seafarers are one of the most qualified lot in the world with a share of 6.3% for officers and 7.5 % for ratings in the world. To address the shortage of trained manpower problem in the industry, the ministry has initiated several measures to not only increase the numbers of trained manpower but also to improve the quality of training. In its Maritime Agenda- 2020, India aims to increase this share to 9% by 2015, entailing expanding annual training capacity from 5,600 to 15,000 Officers and from 4,600 Ratings to 9,000 Ratings. He said that setting up the Indian Maritime University in 2008 is a step in this direction and that further steps will be taken to increase the share of Indian seafarers as envisaged in the Maritime Agenda.

Shri Vasan also announced that the Thoothukoodi-Colombo Passenger Ferry Service would be flagged off within the next two weeks.

Box handling crosses 10,000 TEUs at Mangalore port
The container handling at New Mangalore Port Trust (NMPT) crossed 10,000 TEUs (twenty-foot equivalent units) mark in the first 75 days of the current financial year.

New Mangalore Port handled 10,076 TEUs of containers in the first 75 days of current financial year as against 8,917 TEUs in the corresponding period of the previous fiscal, recording a growth of 13 per cent.

Mr P. Tamilvanan, Chairman of NMPT, said that the beginning of current financial year shows encouraging trend for the growth of container traffic at the port. In one of the earlier interviews to Business Line, Mr Tamilvanan had said that the port is aiming to handle 60,000 TEUs of containers during the current financial year. The port handled 40,158 TEUs of containers during 2010-11.

Of the total handling of 10,076 TEUs at the port, nearly 13.15 per cent of the cargo was contributed by the mainline vessels calling at the port during the period.

Four mainline container vessels from East and West Africa called at New Mangalore till June 14, contributing more than 1,300 TEUs to the total container traffic of the port.

The port handled one mainline container vessel in April and two in May.

The fourth mainline container vessel of the current financial year – m.v. Konard Schulte – brought 399 TEUs of raw cashew cargo from Port of Contonou in Benin of West Africa.

Mr Tamilvanan said that a few more mainline vessels are expected to call at NMPT in the coming days.

Mr S. Gopalakrishna, Traffic Manager of NMPT, said that the advantage of mainline vessel directly calling at the port is that it brings down the transit time and leads to lesser handling cost for importers. It will take only 25 days between Mangalore and West Africa whereas vessels via Colombo will take 40 days, he added.

INFRASTRUCTURE/NEW LAUNCHES/OPERATIONS

Gujarat opposes Port Regulatory Authority Bill

After criticising the Centre over the Goods and Services Tax (GST), the Gujarat Government has now strongly opposed its proposed Port Regulatory Authority Bill, saying that the Bill would prove detrimental to the development of ports in the country, particularly those in the state.
According to Mr Saurabh Patel, Gujarat Minister for Finance, Industries, Planning and Petrochemicals, the proposed Bill intends to take away the autonomy and freedom of the state governments without considering the legal framework.

“Government of Gujarat has already submitted its views on the draft Port Authority Bill 2011 and is strongly opposing it. It will request the government and the Ministry of Shipping to have an open discussion on the matter,” Mr Patel told reporters.

He was speaking on the sidelines of the 13th Maritime States Development Council meeting concluded here yesterday.

Ports in Gujarat have achieved 12.34 per cent annual growth in traffic during 2010-11, while the total growth rate of major ports all over the country was 1.6 per cent and the growth rate of non-major ports was 8.7 per cent during the same period.

Cargo volume at Gujarat’s non-major ports has increased from 73 million tonnes in 2000-01 to 231 mt in 2010-11, growing by 12.2 per cent annually, compared to the national cargo of 368 mt in 2000-01 to 821 mt in 2009-10, growing by 9.3 per cent annually, he pointed out.

Compared to the existing capacity of 273 mt of Gujarat non-major ports, the state is committed to increase the port capacity to 508 mt by 2014-15 and 870 mt by 2019-20.

“An estimated investment to the tune of Rs 40,000 crore is coming up in port sector and many new projects have already been implemented. In fact, our endeavour is to increase the capacity four-fold by 2020 (244 mt in 2009-10 to more than 1,000 mt in 2019-20),” Mr Patel said.

Supply chain council to launch management course

The lack of skilled manpower is one of the biggest constraints in the supply chain infrastructure in the country. Education and training programmes are therefore, essential to equip people venturing into the sector.

The Council of Supply Chain Management Professionals (CSCMP) plans to bridge this gap by offering certificate programmes to people looking at a career in supply chain management.

“Lack of world class warehouses, wide roads are some of the issues in the supply chain infrastructure in the country.

“But the most important challenge is the lack of skilled manpower in the industry,” said Mr Anshuman Neil Basu, Regional Executive Director, CSCMP.

CSCMP is a US-based body, which conducts research and training programmes in the supply chain sector.

It recently opened a branch in Mumbai which would develop educational and training programs, host conference, workshops and create networking opportunities to meet the needs of supply chain management community.

CSCMP would introduce its certificate programmes in the country by early 2012.

MSRTC AC buses to have LCD TVs, onboard catering

The Maharashtra State Road Transport Corporation (MSRTC) will introduce LCD TVs and onboard catering on its air-conditioned buses soon.
The LCD TV service, conceived by MSRTC Managing Director, Mr Deepak Kapoor, is expected to be operational by July-end, sources in the corporation said.

Soundless advertisements will be shown on the TV screens, and the contractor that will installs them would pay MSRTC a fixed amount. Tenders have been floated. In addition, films will be screened (with sound).

As of now, MSRTC operates 90 AC buses, but it plans to add sixty more within two months, sources said.

“We are also trying to bring catering service on our AC buses,” an MSRTC official said.


Transport Corporation not hit by auto sector slowdown

Transport Corporation of India will not be affected to a great extent by any slowdown in the auto sector, although almost 75 per cent of its revenues come from this sector.

“This is because there will still be a demand for spare parts and servicing of old cars, which we also deal in,” said Mr Vineet Agarwal, Executive Director, TCI, at an analysts meet.

Its Supply Chain Solutions (SCS) and XPS services will each generate one-third of its total revenue by 2014. Currently, these divisions generate only around 22-26 per cent each of the company's revenues.

TCI has estimated growth patterns to be around 25-45 per cent annually in SCS and 20-25 per cent annually in the XPS division. Although the freight division of TCI is generating 46 per cent of the company's revenue today, it has been growing at 10-15 per cent.

“The future EBITA margins for the freight division will be 10 per cent, XPS division will be 20 per cent, SCS division will be 40 per cent and sea ways division will be 10-15 per cent. We also expect a 15-25 per cent EPS growth,” said Mr A.K. Bansal, Group CFO and Company Secretary.
TCI is looking at an overall expansion and transport linking plans. The company is planning to set up logistics parks in places where the consumption is high.

“A logistics park is an area which has warehouses, truck terminals and a port (if it is geographically suitable). We are planning to set up around 10-12 parks in the metros. We are also planning to buy half to one million square feet of land for warehouses,” said Mr Chander Agarwal, Executive Director, TCI.

The company is also planning to expand business though the TCI Global division to South-East Asian countries.

RAILWAYS

MLAs Also to Issue Income Certificate for ‘Izzat’ Scheme of Railway Travel W.E.F. 1.7.2011

Ministry of Railways have decided that the Income Certificate issued by Members of Legislative Assemblies (MLAs) of various States and Union Territories will also be accepted for issue of “Izzat’ monthly Season Tickets (MSTs) for the benefit of persons working in unorganized sectors. This provision will be effective from 1st July, 2011. This facility will be in addition to the five kinds of certificates already permitted under the ‘Izzat’ Scheme.

Under ‘Izzat’ scheme, Monthly Season Tickets (MSTs) @Rs. 25/- per month per person is issued for the benefit of persons working in unorganized sector with monthly income not exceeding Rs. 1500/- for travel up to 100 kilometers from the station serving their place of residence. Presently ‘Izzat’ MSTs are issued on production of (i) income certificate from the District Magistrate; or (ii) income certificate from MP of Lok Sabha, or (iii) letter of recommendation from Union Minster or MP of Rajya Sabha to DRM, or (iv) BPL card or any other certificate issued by Central Government under a recognized poverty alleviation programme and (v) under exceptional circumstances, DRMs are also authorized to issue income certificates.

In addition to the above, Ministry of Railways have now decided that w.e.f. 1.7.2011 the income certificates issued by MLAs of various States & Union Territories will also be accepted for issue of ‘Izzat’ MSTs subject to the following conditions:

I. The MLAs should issue income certificates to persons belonging to their constituencies only;
II. The format of the income certificate will be as enclosed;
III. The income certificate issued by MLAs will be one-time use only, i.e. the original Income Certificate issued by MLA will be retained by the Railway staff at the time of issue of ‘Izzat’ MST;
IV. A fresh income certificate from the concerned MLA will be required every time the concerned person approaches the station for purchase of ‘Izzat’ MST.
V. This provision is being done on pilot basis for a period of three months.

All Zonal Railways have been requested to send monthly figures of usage of ‘Izzat’ MSTs, based on which a review will be done.

Indian Railways to Participate In International Level Crossing Awareness Day Tomorrow

Every year, International Union of Railways (UIC) observes one day as the International Level Crossing Awareness Day (ILCAD). This year, 9th June is being observed as ILCAD. Indian Railways has decided to participate in this global campaign to sensitize road users to increase safety at unmanned level crossings. The ILCAD focuses on educational measures and the promotion of safe behaviour at and around level crossings. It is built on existing national events which will be held jointly at various locations in every participating country on June 9th, 2011.

The number of unmanned level crossing accidents occurring on Indian Railways is a cause of concern. At present, there are total 32694 numbers of level crossings over Indian Railways out of which 14853 are unmanned where the accidents occur primarily due to inadequate precautions by the road users failing to observe mandatory sign boards, signals and basic traffic safety rules. Over the last five years, the train accidents at unmanned level crossings remained at low level.

Indian Railways carry out intensive social awareness campaigns, on a regular basis, to educate road users. This includes publicity campaigns through various media like newspapers, TV, Radio etc., distribution of posters, leaflets, various short duration films/advertisements etc. Even in local languages have been prepared by the Zonal Railways for educating the road users about the precautions to be taken while negotiating the unmanned level crossings. There is a need to educate people at Village Panchayats, schools, weekly markets in rural areas and also carry out ambush checks at unmanned level crossings.

To enhance the safety and reduce inconvenience to road users, busy level crossings are being replaced by Road Over Bridges (ROB)/ Road Under Bridges (RUB) and Limited Height Sub Ways (LHS) gradually. In the year 2010-11, 641 ROB/RUB/LHS have been constructed under various schemes.

Panel to oversee land acquisition for HMRL

Hyderabad Metro Rail Ltd has constituted a panel of experts to facilitate and oversee land acquisition along the three dense corridors in and around the twin cities of Hyderabad and Secunderabad.

In a notification issued late on Monday, the State Principal Secretary, Urban Development, Mr Sam Bob, has constituted a committee.
The metro rail team and GHMC have identified nine km of narrow road stretch requiring immediate widening for smooth implementation of the metro rail project.

The HMRL management has identified 1,262 properties which will be affected, with most of them in the partly affected category for the road widening works. Of these, 140 properties have been identified as those located in Government Vested Municipal (GVM) lands. These are long-standing private buildings (small houses, shops) on Government lands.

As the payment of compensation for land and structural compensation for these GVMs has become a major hurdle for road widening, the Managing Director of HMRL, Mr N.V.S. Reddy, has requested the State Government to authorise them to negotiate with the occupants of GVM properties and thereafter decide ex-gratia by constituting a committee.

Centre's assistance sought for transport infrastructure in TN

The Tamil Nadu Government, which plans to implement an Rs 16,650-crore monorail project for Chennai, hopes to get funding assistance from the Centre.

In a representation made by the Chief Minister, Ms J. Jayalalithaa, when she met the Prime Minister, Dr Manmohan Singh, in Delhi today, she also sought the Central Government's support for its road sector project and urban infrastructure development.

In the first phase, the monorail will cover 111 km and is to be completed in the next two years at a rough cost Rs 150 crore/km. It is a capital intensive but environment friendly project, which the Centre could support under the National Urban Transport Policy. This will be extended in stages to 300 km and integrated with the existing transportation systems.

The Chief Minister has requested that the next phase of the Tamil Nadu Road Sector Project envisaging upgradation of over 2000 km of highways could be put up for World Bank under Phase II of the TNRSP. In the first phase the Rs 2,442 crore project, which is nearing completion, has helped upgrade about 724 km of roads.

Ms Jayalalithaa has also requested that the Centre expedite the process of getting Japan International Cooperation Agency assistance for the Rs 1,075-crore second stage of the Chennai Outer Ring Road project. The first phase of Rs 1,081 crore is now under implementation.
To strengthen urban infrastructure, the State needs over Rs 20,000 crore over the next five years to cover water supply, drainage, waste disposal and road infrastructure.

The State Government estimates that Rs 9,500 crore will be needed to revamp and augment waster supply in the urban local bodies; Rs 5,700 crore to renovate about 18,000 km of the 39,500 km urban roads; Rs 3,000 crore for solid waste management with scientific landfills; Rs 1,100 crore for sewer networks; and Rs 700 crore for new Urban Health Centres.

The State Government has requested the Centre to hike allocation under the Indira Awaas Yojana rural housing scheme in which the unit cost has been fixed at Rs 45,000 with the Centre sharing 75 per cent of the cost and the State Government 25 per cent. But the State Government has pegged the unit cost at Rs 75,000. The present Government has decided to launch a ‘Solar Powered Green House Scheme' with a unit cost of Rs 1.80 lakhs by meeting the entire cost from Government funds. This scheme will be dovetailed with the IAY Scheme.

ROAD TRANSPORT

Workshop on Nationwide Electronic Toll Collection Held

The Union Minister for Road Transport & Highways Dr. C.P. Joshi has said that we should chalk out a plan to increase the percentage of national highways from present 2.2 % to 5 % in the next 10 years. Delivering inaugural address at the Consultation Workshop with the Technology Providers and Concessionaires in respect of Electronic Toll Collection (ETC) here today, he said that keeping in view the various types of highways there should be a hybrid pattern of toll collection. The Workshop was jointly organized by Ministry of Road Transport & Highways, National Highways Authority of India & National Informatics Centre. The Chairman of UIDAI Shri Nandan Nilkeni & Minister of State for RT&H Shri Tusharbhai A. Chaudhary also addressed the workshop. Shri R.S. Gujral, Secretary Ministry of Road Transport & Highways and Dr. V.K. Gairola, D.G (NIC) were present.

With an objective of paving way for a unified Electronic Toll Collection (ETC) technology for National Highways in India, the Ministry of Road Transport & Highways constituted a Committee under the chairmanship of Shri Nandan Nikekani Chairman of UIDAI with a mandate to examine all technologies available for Electronic Toll Collection (ETC) and recommend the most suitable one for implementation throughout India. The other members of the Committee are Prof. Pankaj Jalote, Director, IIIT-Delhi ; Dr. Kolin Paul, Asst. Professor, IIT-Delhi ; Shri A.V. Sinha, DG (Road Development) & Special Secretary, M/o RT&H and Shri. V.L. Patankar, Member (Technical), NHAI (Member Secretary)

Based on the recommendations of the committee headed by Mr. Nandan Nilekani to use RFID technology for ETC, the Apex Committee, responsible for ETC implementation planning, is in the process of prescribing certain standards which should be complied with all over the country to ensure interoperability. The primary purpose of this workshop was to take feedback from the key stakeholders, comprising concessionaires and ETC technology service providers, on the following standards.

• Specifications for:
o RFID Transceiver (Tag reader)
o RFID Tag have been drafted
• Typical layout of ETC implemented Toll plaza
• Details on data content & format to be present on Tag, Transceiver and Toll Plaza (lane) server
• Details of Data transfer between Tag & Transceiver and Transceiver & Toll plaza (lane) server
• Capacity and capability of Toll plaza (lane) server

Security, cost effectiveness, convenience and scalability have been the main criteria based on which the detailing has been done.

Based on the feedback, the specifications and data detailing will be finalized for open market release. The plan is that the authorized manufacturers will be producing Transceivers and Tags based on these standards, the concessionaires will be procuring these Transceivers and in turn, the technology service providers will be integrating the entire ETC system at the toll plaza. Although details on other aspects like clearing house are being worked out simultaneously, majority of the decisions will depend upon these standards only.

Widening of existing road to two lane National Highway Standards from Nechipu to Hoj in Arunachal Pradesh

The Cabinet Committee on Infrastructure has given its approval for updating the civil cost to Rs.1255 crore for widening of the existing road to 2-lane national highway standards from Nechipu to Hoj on BOT (Annuity ) basis under the Arunachal Pradesh Package of Roads and Highways.
The cost of the project including civil cost, land acquisition and preconstruction activities and supervision and management is Rs.1524 core.
The Trans Arunachal Highway is a very important highway which runs across the State of Arunachal Pradesh. The project road will improve the internal connectivity of western districts of Arunachal Pradesh with Itanagar, namely Seppa and Bomdila and foster socio-economic development of the whole of the State. Apart from this, the road would also help in hydro power projects coming up in Arunachal Pradesh. The road would also greatly facilitate the security/defence agencies to combat anti-national activities and threat on border areas.

Widening of road to 2-lane National Highway standards from Potin to Pangin on BOT (Annuity ) basis

The Cabinet Committee on Infrastructure has approved the updating the civil cost of widening of existing road to 2-lane National Highway standards from Potin to Pangin (407 km) on BOT (Annuity) basis under Arunachal Pradesh Package of Roads and Highways of Special Accelerated Road Development Programme for North East (SARDP-NE).

The estimated civil cost of the project is Rs.1676 crore as on March, 2010 prices. The cost of the project including civil cost, land acquisition and preconstruction activities and supervision and management is Rs.2032 crore.

The Trans Arunachal Highway is a very important highway which runs across the State of Arunachal Pradesh. The project road will improve the internal connectivity of eastern districts of Arunachal Pradesh with Itanagar, namely, ziro, Daporizo and Aalong and foster socio-economic development of the whole of the State. Apart from this, the road would also help in hydro power projects coming up in Arunachal Pradesh. The road would also greatly facilitate the security/defence agencies to combat anti-national activities and threat on border areas.

Four Laning of Panikoili – Rimuli Section of National Highway NH 215 in Orissa

The Cabinet Committee on Infrastructure has approved the implementation of the project for the development of four laning of Panikoili – Rimuli section on National Highway NH 215 in the state of Orissa under NHDP Phase III on DBFOT basis in BOT (Toll) mode of delivery. The four laning of the 163 Km. stretch of NH 215 will cost Rs.1648.92 crore.

AIRWAYS

Boeing to Build 10 C-17 Airlifters for Indian Air Force

Boeing has announced that India’s Ministry of Defence has signed an agreement with the U.S. government to acquire 10 Boeing C-17 Globemaster III airlifters. The Foreign Military Sale — approved by the U.S. Congress in May 2010 — establishes India as the C-17′s largest international customer.

According to the agreement, India will take delivery of its C-17s in 2013 and 2014.

“The C-17 will elevate India’s leadership in the region,” said Dinesh Keskar, president, Boeing India. “With its tactical and strategic capabilities, the C-17 fulfills India’s needs for military and humanitarian airlift. The important transaction reaffirms our close relationship of several decades with India and also highlights our commitment to the strategic partnership between the two countries.”

“This agreement is a reflection of the outstanding partnership India’s Ministry of Defence has with the U.S. Air Force, which worked very hard to help India strengthen its airlift capabilities with the C-17,” said Jean Chamberlin, vice president and general manager, Boeing Mobility. “The aircraft’s ability to transport large payloads across vast ranges, land on short, austere runways, and operate in extremely hot and cold climates makes it ideal for the region.”

Boeing will support India’s C-17 fleet through the C-17 Globemaster III Sustainment Partnership, a proven multinational Performance-Based Logistics program. The GSP “virtual fleet” arrangement ensures mission readiness by providing all C-17 customers — with varied fleet sizes — access to an extensive support network for worldwide parts availability and economies of scale when purchasing materials.

“Boeing is pleased that the Indian Air Force (IAF) has selected the C-17 to support its airlift mission,” said Mark Kronenberg, vice president of International Business Development for Boeing Defense, Space & Security. “We look forward to partnering with India as we move forward with the agreement’s 30 percent offset program, which will help strengthen India’s aerospace and defense capabilities.”

During rigorous field evaluation trials in India in June 2010, the C-17 met all of the IAF’s airlift requirements.

A tactical and strategic airlifter, the C-17 can land combat-ready troops in remote locations or airdrop them directly where needed. The C-17′s ability to back up allows it to operate on narrow taxiways and congested ramps. With a maximum payload of 164,900 pounds (74,797 kg), the C-17 can take off and land in 3,000 feet (914.4 m) or less.

Boeing has delivered 232 C-17s worldwide, including 22 with international customers. The U.S. Air Force — including active National Guard and Reserve units — has taken delivery of 210 C-17s. Other customers include the United Kingdom’s Royal Air Force, the Qatar Emiri Air Force, the Canadian Forces, the Royal Australian Air Force, the 12-member Strategic Airlift Capability initiative of NATO and Partnership for Peace nations, and the United Arab Emirates Air Force and Air Defence.

Civil Aviation Minister Inaugurates Steering Committee Meeting of Cooperative Aviation Security Programme-Asia Pacific

Union Civil Aviation Minister Shri Vayalar Ravi has underlined the need of joint pooling of resources by the countries of Asia Pacific Region to develop a formidable wall of protection against terrorism and unlawful interference in Air transport system. Inaugurating the 8th Steering Committee Meeting (SCM) of cooperative Aviation Security Programme-Asia Pacific (CASP-AP) here today, he said this entire region has had a history of political turbulence in some form or the other for the last few decades, though there are exceptions too. Shri Ravi said these disturbances have affected our socio-political fabric and impacted our public services, including civil aviation as well. He said we are thus exposed to a fragile environment as far as security is concerned.

The Union Civil Aviation Minister said, “I think there is an element of indivisibility in security. The entire system has to be integrated in a manner that no weak link is left anywhere for a criminal or a terrorist to attack. Security cannot be dealt in fragments. If any nation is unable to adopt a foolproof system of civil aviation security, the entire region would become fragile”.

The Minister said the varying stages of economic development of the countries in this region have an impact on the adoption of technologies and systems. Best technologies come with a heavy financial burden. He said as most of the economies in this region are still developing, the states find it difficult to adopt expensive technologies. This leads to wide variations in defense systems and an utter lack of uniformity across states making us vulnerable.

Shri Ravi said there is a need to explore appropriate but cost effective technologies which suit this region not only financially but also respond to our socio-cultural sensitivities. He was of the opinion that the entire region has to embark on this exploration jointly so as to supplement and complement each others’ weaknesses and strengths. The Minister said there is also an urgent need for a regional pooling of resources to aid nations which need assistance.

Referring to the importance of capacity building Shri Ravi said, “Another area which needs to be seriously considered is that of capacity building. Even with the best of equipment, we may fail to achieve the right levels of security, unless our manpower is adequately trained. In this, both ICAO as well as the more advanced nations, could play a significant role. We have already offered ICAO a Regional Training Centre at New Delhi. I hope this would become a major resource for upgradation of skills of all the civil aviation related personnel, in the Asia Pacific region”.

Endorsing the amendments proposed to Schedule Seventeen of the Chicago Convention the civil aviation minister said as a matter of fact, India has already acted upon most of the proposed amendments. He said the recent ICAO Audit has found India to be compliant of international standards in nearly every important benchmark. Referring to the recently conducted study by ICAO to improve india’s regulatory system, the minister said we are awaiting the final Report and would act on its recommendations. He said “ I am hopeful that as a result of these changes, India would emerge as much a role model in the region in matters of security as it is considered in the field of safety”

Shri Ravi said it is a matter of great pride for us that this year the chairmanship of CASAP is being assumed by India. It will give us more opportunity to participate more actively and meaningfully in weaving the area together into a strong and impenetrable shield of security and protection, the minister added.
The meeting is being attended by 24 member countries i.e. Afghanistan, Bangladesh, Bhutan, Brunei, Cambodia, Fiji, Hong Kong- China, India, Indoneisa, Japan, Korea, Kiribati, Lao PDR, Macau China, Malaysia, Maldives islands, Mongolia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Thailand, Timor island, Vietnam and other international organization and observers like ICAO, IATA, TSA, Australia, UD, New Zealand and UAE are also attending the SCM of CASP AP.

The Steering Committee Meeting will provide an excellent platform to member countries of the Asia Pacific Region to interact and cooperate in understanding the issue of aviation security and share the actions and procedures adopted by these countries by practices, legislations etc to protect the civil aviation operations to achieve the ICAO objective to have aviation as most secured mode of transport.

The Cooperative Aviation Security Programme (CASP) seeks to achieve compliance amongst Participating States and Administrations with the Standards and Recommended Practices detailed in Annex 17 and the security provisions of Annex 9 of the Chicago Convention (1944), with other international conventions and with the guidance material provided by ICAO. It also aims to create a regional structure for cooperation and coordination of civil aviation security and for the training of aviation security personnel.

Flydubai begins Hyderabad-Dubai service

Flydubai, a Dubai-based new low-budget airliner, has launched its thrice-a-week flight between Hyderabad and Dubai.

Flight FZ 435 will operate on Thursday, Saturday and Sunday and the one-way fare from Hyderabad to Dubai is Rs 8,000, the CEO of Flydubai, Mr Ghaith AL Ghaith, told media persons here today.

“India is a key destination for Flydubai, which was set up by the Dubai Government to provide a good quality, low-cost alternative for millions of expats living in UAE,” he said.

Mr Ghaith added that Flydubai is connected to 37 operational destinations across the Middle East, Asia, Africa and Europe, and plans to increase its aircraft fleet from the present 17 to 21 by the year-end.

Flydubai has placed orders for 50 more aircraft, which it expects to get by 2015, at an investment of $4 billion.

Sultan AL Owais, UAE Ambassador to India, said that UAE is a significant partner for India and substantially contributes to the Indian economy.

AI revival plan to be placed soon before GoM for approval

Ailing Air India’s turnaround plan, including restructuring of its massive debt, would come up before a Group of Ministers for approval in a few weeks.

“The turnaround plan has been approved by the bankers.
... Now it needs to go to a Group of Ministers (GoM) and it should happen very fast ... within the next couple of weeks,” the Civil Aviation Minister, Mr Vayalar Ravi, said here.

About further equity infusion by the Government in the cash-strapped national carrier, he said his Ministry was holding “regular dialogue with the Finance Ministry. We will continue this dialogue and go to the GoM when necessary’’.

The Government has already set aside a provision of Rs 1,200 crore in the budget for infusing equity in Air India during this financial year. Till now, it has injected Rs 1,200 crore and Rs 800 crore in two tranches in 2009-10, raising the national carrier’s equity base to Rs 2,145 crore.

The Minister said all the issues, including routes from which Air India has withdrawn, were under discussion and would be taken up by the GoM.
Asked about the oil companies restricting jet fuel supplies and putting the national carrier on a cash-and-carry payment mode over non-payment of dues, he said: “Everything has been settled and there is a regular supply (of aviation turbine fuel) now.”

In a relief for Air India, state-run oil companies were yesterday directed to meet the carrier’s requirements for three months to allow it to fully restore its operations. Air India had been curtailing and combining about 15 per cent of its 320 daily flights for the past several weeks due to fuel shortage.

With the airline announcing plans to become operationally profitable in four years, nearly 20 of its lenders (banks) have indicated that they were willing to consider recasting its entire Rs 40,000-crore debt. Its annual interest payment on this debt is around Rs 1,800 crore.

Under the turnaround plan, the cash-strapped airline has set a target of enhancing its revenue by Rs 5,000 crore and slash costs by Rs 4,000 crore per annum, making it operationally profitable by 2015.

The airline is saddled with a debt of about Rs 40,000 crore, of which Rs 18,000 crore constitutes working capital loans taken from a consortium of banks and the balance Rs 22,000 crore is towards payment for new aircraft ordered.

The ailing national carrier had in March accepted a corporate debt restructuring package prepared by SBI Caps and vetted by Deloitte. The package was approved after several rounds of consultations with banks and the government.

Once finalised, the plan would be submitted to RBI for approval. If the RBI agrees to the proposal, Air India will be able to reduce the interest rate on its working capital loans to 6-6.5 per cent from the present 12 per cent, thereby considerably reducing its debt servicing burden.

Shimoga likely to be new destination for HAL

Shimoga is likely to be the new destination for Hindustan Aeronautics Limited (HAL) which is planning to establish a new helicopter manufacturing unit in the State.

A three-member team of the Bangalore-headquartered HAL visited the district and held discussions with the Deputy Commissioner, official sources said.

According to the sources, the district administration is looking at two places around the city, one at Devakathi Koppa and another near Sogane where a new airport is coming up for the proposed project.

 

INTERNATIONAL NEWS

New Management Board Appointments at Kuehne + Nagel International AG

The Board of Directors has appointed Horst-Joachim Schacht and Tim Scharwath to the Kuehne + Nagel International AG Management Board as of September 1, 2011. Horst-Joachim Schacht will be responsible for the business unit “Sea Logistics” and Tim Scharwath for the business unit “Air Logistics”. The two senior managers will take on the responsibilities of Peter Ulber who – as previously communicated – will leave the company due to personal reasons.

After holding several management positions in the shipping industry, Horst-Joachim Schacht (52) joined Kuehne + Nagel in 1997. He started his career as a member of the Management Board of the German organisation responsible for seafreight. As Senior Vice President he has been managing global seafreight operations since 1999.

Tim Scharwarth (45) joined the Kuehne + Nagel Group in 1992. Following positions in sales and branch management, he was appointed Executive Vice President Airfreight Central Europe in 2004. From 2007 to 2008 he was Managing Director of Kuehne + Nagel’s organisation in the Netherlands and in 2009 he was promoted to Regional Director North West Europe.

“We are very pleased to be able to fill two board positions with highly capable personalities from our own ranks, demonstrating the strengths of our organisation,” said Karl Gernandt, Chairman of the Kuehne + Nagel Group. “For many years both gentlemen have contributed to the success of our company in various management positions and bring with them a profound know-how and professional experience in the respective areas. At the same time, the appointment of two new board members underlines the importance of our dynamically growing “Sea Logistics” and “Air Logistics” business units. I am convinced that under the management of Horst-Joachim Schacht and Tim Scharwath our successful operations will continue and benefit from new impulses.“

UPS Expanding Capacity of Air Network in Americas

With Latin American economies showing solid growth, UPS has significantly expanded the capacity of its express air network throughout the region.

Effective last week, UPS increased its cargo capacity by more than 50 percent on 19 weekly flights into Central and South America, replacing a Boeing 757 narrow-body aircraft with a new, larger B-767 wide-body freighter. The flights will originate from UPS’s Americas hub in Miami and operate into Quito, Ecuador; Guayaquil, Ecuador; Bogota, Colombia; Panama City, Panama; Guatemala City, Guatemala, and Managua, Nicaragua.

“UPS has been one of the largest cargo carriers in the Americas for more than a decade so when our customers asked for more capacity, we responded with this larger aircraft,” said Romaine Seguin, president of UPS’s Americas Region. “This enhancement in the Americas is a great example of how we continue to grow our portfolio of business solutions to serve the logistical needs of our customers.”

The economies of Latin America grew an average 6 percent in 2010, led by such export industries as flowers and farmed fish in Colombia and Ecuador; fruits and vegetables in Guatemala; okra & automotive parts in Nicaragua, fresh fish out of Panama. Technology and health care products also are increasing.

“Whether you’re talking tilapia, technology or textiles, UPS is uniquely positioned to satisfy customers’ global logistics needs,” added UPS International President Dan Brutto. ”We are committed to helping customers grow their businesses to the United States and to expand businesses to new markets around the world.”

The B-767 can carry a payload of 132,200 lbs, or about 50 percent more than a B-757. Those two aircraft are used almost exclusively in the Americas for reasons of crew, operational and maintenance efficiency. The high schedule reliability rate of both aircraft is an attractive alternative for exporters with tight supply chain and cold chain requirements. To increase its reach into the Americas, Asia and other parts of the world, UPS continues to invest in new B-767s with 20 currently on order.

Unique three-way partnership in emergency relief aims to help Africa help itself

World Vision, Agility and Advance Aid are delighted to announce a three-way partnership that will enable African-produced emergency relief goods to be provided to assist in African emergencies- a first of its kind.

This partnership will begin to reverse a trend whereby all emergency relief goods have been sent to Africa from the Far East, sometimes even from Europe and North America. The 5,000 Emergency Kits that Advance Aid is supplying to World Vision today are 100% locally-purchased and more than 80% African-manufactured. The partners believe that this is the first time that a largely African kit has been supplied for use in African emergencies.

Advance Aid has worked with a number of Kenyan manufacturers to source the goods for the Emergency Kits. Each Kit provides the basics that help a family of five to survive once they have lost everything in a natural or man-made disaster and contains plastic sheeting, blankets, a mosquito net, a kitchen set, two buckets and a hygiene kit.

Logistics and warehousing services are being provided for the initiative by Agility, a leading global logistics provider, through its warehouses in Nairobi and Mombasa. Agility will also be working with World Vision Kenya to distribute the emergency kits – in forty-foot containers provided by Advance Aid – to World Vision offices across the country where they will be stored to be ready for use in the event of emergencies striking.

“We are delighted to be able to work with World Vision and Agility on this initiative,” says David Dickie, Chief Executive of Advance Aid. “They have both shown great vision in backing this idea and helping it come to life. We are also grateful to the local manufacturers who have helped us make this possible and have seen both the value of the initiative for Africa and the opportunity that it presents to them to get back into a market that has largely moved to South East Asia. Africans should be getting the full development benefit of the huge sums of money that are spent here on emergencies. This development benefit should be bringing jobs and wealth to Africa, not just imports.”

Nicholas Wasunna, Senior Advisor, World Vision Kenya adds, “As the frequency of emergencies increases, there is an urgent need to ensure that life saving humanitarian assistance is able to reach the most affected populations as soon as possible so as to uphold the humanitarian imperative of saving lives. World Vision is committed to remaining responsive to emergency needs and through this exciting partnership with Advance Aid and Agility we have together developed a solution that best addresses the immediate needs of vulnerable children and communities across Kenya”.

“Agility is pleased to partner with Advance Aid and World Vision in this new model of relief aid procurement and distribution,” says Dev Bij, Agility’s CEO of East Africa. “The partnership fits in well with Agility’s vision of corporate social responsibility and our commitment to contribute to positive change in the East African countries that we work in. Partnering in a project of this nature that largely depends on an effective supply chain solution is synonymous to our business and we are delighted to contribute our skills, knowledge, resources and local expertise. Building on local capacity and the high level of local content in this relief aid model coupled with the benefits of pre-positioning are also key factors attributed to Agility’s participation in this project.”


FedEx Enables Faster Access to the Hong Kong Marketplace

FedEx Express (FedEx), a subsidiary of FedEx Corp. and one of the world’s largest express transportation companies, enhanced its FedEx International Priority® Freight service, enabling shipments to be delivered to their destinations in Hong Kong before 12:00 noon.
The 12:00 noon delivery commitment is the earliest in the market and offers customers faster access to the Hong Kong and Greater China marketplaces. This service is applicable to shipments 68kg or above.

“FedEx is focused on offering best-in-class service that enables customers to capture business opportunities faster,” said Anthony Leung, managing director, FedEx Hong Kong and Macau. “The improved delivery time of the FedEx International Priority Freight service gives customers a competitive advantage in accessing the market, and more time for them to organize and redistribute their goods.”

FedEx continuously enhances its service offering to meet customer needs. Earlier this month, FedEx introduced FedEx International First®, a premium service that delivers extra urgent shipments by 10 a.m. to Eastern and Southern China, and Singapore. The service also applies to outbound shipments from Hong Kong, Japan and Taiwan to the U.S. (delivery by 8 a.m.) and eastern and southern China (delivery by 10a.m.).

In January this year, FedEx introduced a new direct connection between India and its Asia Pacific hub in Baiyun International Airport, Guangzhou, southern China, which provides customers greater access to two of the most rapidly developing markets in the world.

In 2010, FedEx introduced direct flights from Hong Kong to the FedEx Super Hub in Memphis, Tennessee, U.S., and from Hong Kong to its European hub in Paris, France. Using Boeing 777 Freighters, the direct flights improved call-in cut-off time to 18:18 and offer greater payload capacity for customers shipping from Hong Kong to the U.S. and Europe.

 
 
 
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