The latest on cabotage in India

And how it will affect you.

http://www.moneylife.in/article/switching-off-the-lighthouses-cabotage-kills-a-maritime-nation/28743.html

And why this impacts the future of not just your jobs, or the maritime industry in India, but the larger issues therein.

India Maritime Week 2012 -

India Maritime Week was held in Delhi from the 17th through 21st of January 2012. Organised by Gateway Media of Singapore and Hyderabad. Here's my report, as carried first at MoneyLife:-

http://moneylife.in/article/the-deeper-message-from-the-india-maritime-week/23271.html

The deeper message from the India Maritime Week

http://www.indiamaritimeweek.com/

January 28, 2012 08:20 AM |
Veeresh Malik

The participants at the IMW were reminded that if they wanted the freedom to grow, they had it, and there was no point in simply bringing up old issues. The approach was that the IMW heralded a solution oriented future, and was not going to be the complaint centre

There is a theory doing the rounds in the backrooms of power in India, quietly gaining strength with those for whom national interest takes precedence over anything else, that the Bombay-Calcutta axis of commercial power enhanced by the alignments of maritime trade as elevated in the post-Mughal colonial eras is about to self-destruct and implode into a natural end. This may not be very palatable to many, but then the truth is usually anything but bitter, and is more than wishful thinking by rival ports and cities and the people behind them which have come from literally the deep blue ocean and taken large chunks of cargo away from these two traditional city-ports.

Witness the following winds of change, globally and in India, as weather-vane indicators:

• Large historically strong port-cities from powerful nations worldwide have re-invented themselves as banking and trading centres as the physical ports themselves have moved away. Examples —London, New York, San Francisco, Amsterdam, Tokyo and even Shanghai. However, they have also re-invested vast sums of money in building up the support infrastructure to make themselves global cities. Can we say the same of Kolkata or Mumbai, which have more or less, simply changed their names? Can the Kolkata or Mumbai Port Trust start to try to emulate the methods adopted with changing times by, for example, the Port of New York Authority, which has become a huge infrastructure company now known as the “Port Authority of New York and New Jersey”?
• Vast chunks of the commercial aspects of shipping have moved to inland cities like Toronto, Geneva, New Delhi and some inland cities in the states of Connecticut and Virginia in the US. Even land-locked Mongolia is emerging as a maritime registry of some clout. Within India, shippers and customers inland now often have the upper hand over the ports, shipping lines and agents, which also dictates not just cost control, but also timelines demanded of the shipping industry. Shippers from upcountry inland centres who had to go and beg for everything they wanted in port cities even as recently as 10 years ago, will and do demand real-time solutions in their own town, or will simply not use those ports again.
• Within the Indian context, the states which appear to be racing ahead with building ports and allied inland infrastructure are Gujarat, Tamil Nadu and Andhra Pradesh. Industry as well as consumption is already following them. The realities with Mumbai/Maharashtra andKolkata/West Bengal and their satellite ports are there for all to see, in comparison, which is sad, no doubt, but as put forward by one of the speakers, “time and tide waits for no-one”. Broadly, a clarion call has gone out to these two ports—shake up, or ship out.
• Forget removal of cabotage, the message was that the government was going to make concerted and joint efforts to assist coastal shipping, though at this juncture the inter-ministry co-operations required were as hazy as the intra-ministry co-operation missing from within the various arms of the ministry of shipping. A call went out that like in inland water navigation, the cobwebs of the DG (Directorate General) of Shipping be removed so that coastal and inland shipping in progressive states could go forward like it did in Goa. This is a fact—the biggest stumbling block for coastal shipping in India has been our own shipping governance.

In this context, the first ever India Maritime Week (IMW) held in Delhi from the 17th through to the 21st of January, was a mirror to all that is going up and down, or better still, like the ocean tides, flowing in or out, along our coasts and connected aspects. Incidentally, one additional reason for holding this now to-be annual feature in Delhi was that it removed any trace of regional bias between coastal states and local power brokers, which has been the bane of similar attempts in the past. Holding this event in Delhi, straddling all aspects of the maritime industry, means that there was no Bombay club, Calcutta adda, Madras coffee-shop, Cochin spice or any other parochial or communal bias. This was simply—pan India.

The IMW also spanned seamlessly the complete spectrum of issues related to the role of shipping in securing and strengthening a country and its economy. Intermodal linkages (road, rail, inland water), ports, maritime industries (ship-building, repair, dredging), technology (software and hardware), people (HR onboard as well as skills development onboard and ashore), coastal shipping, passenger movements, ship-owning, finance and domestic as well as international regulations were just some of the issues where information was shared, and discussed, freely and frankly, often between disparate groups who were inter-dependent but rivals. In addition, this being Delhi, governance was present in full force, and made some important announcements which will have very deep bearings on the larger issues of national interest.

In addition to the inaugurals, where there was some plain speaking by various arms of the central government on past mistakes and future path forwards, were the surprise star sessions which sort of provided additional inputs on where the industry and therefore economy was headed. These included:

• Real time status reports and plans of some of the private ports in the country, previously known as ‘minor ports’ but having now over-taken the major ports, also known as ‘non-major’ ports. The simple fact that such ports have aggressive marketing and sales personnel posted not just in inland centres in India but also abroad shows how far this business has come from a day and age when the trade had to beg for berths—as they often still have to do at the government-run major ports. To observe the marketing managers of some ports actively networking and hustling for business was such a refreshing change from what it is like with the ‘major’ ports.
• Inland waterways seem to be stealing a march over all other forms of domestic transport, including linkages to the North East through Bangladesh. House-full to overflowing sessions. Freed from the shackles and cobwebs of the moribund DGS, this seems to be shooting ahead in eastern UP, Bihar, Andhra Pradesh, Kerala, Goa and even Kashmir. Gujarat appears to be blocked here because the Gulf of Kutch and Khambat are still under the ‘control’ of the ancient Merchant Shipping Act, and the islands are being slowly denied good sea service by rules designed to frustrate, but some changes are proposed here too.
• Deliberations on how to turn around the central government-run major ports brought out some surprising numbers—the realisation from just about 8% of the land owned by the Bombay/Mumbai Port Trust, currently locked in by legacy tenants, would be more than enough to dredge and re-modernise the complete Mumbai/JNPT/Butcher Island/Nhava Sheva Port complex and leave enough money for outright purchase of one or two satellite ports not too far from Mumbai. The thinking here is that the PPP (public-private-partnership) route or seeking funds from the Centre is not really necessary for the Port Trusts when the major port trusts already have the asset base to take things forward on their own. The message was—if you don’t take your land back from your tenants despite being able to, then don’t come with a begging bowl to the Centre.
• A session on petroleum imports (liquid and gas) and their storage moved on from the known numbers and projections to new alternate scenarios of impact of renewable energy and storage of both crude and gas in underground caverns, as well as issues of energy security and micro-generation of power using wave generation around ports. This is more than symbolic, since many of the larger oil companies—foreign and Indian—and their related entities are quietly re-inventing themselves as energy companies with eminently green credentials—where a continuous increase in consumption of energy does not mean a concurrent increase in the consumption of fossil fuels, solid, liquid and gas.
• Some plain and straight talking by the ministers who attended as well as the civil servants and technocrats from the ministries and shipping boards as well as infrastructure segments of the government would have gone down hard with the industry. PPP was the preferred route, long-term investment with Corporate Social Responsibilities (CSR) was expected, security considerations were top essential and in that context ‘denied’ on security grounds by the intelligence services meant ‘denied’. Customer is King, and if you don’t satisfy him, then don’t blame us if they somehow go via Colombo, was another message which the Sri Lankan delegates, waiting in the slips like their cricketers, were snapping up. Mention needs be made of co-operation between India and Sri Lanka in developing and re-vitalising Sri Lankan ports. All bets need to be covered, right? Right.

There is most certainly a deep realisation within the government and others that India’s complete future as a nation is at an inflection point, and is also intricately linked with India’s economic strength, which in turn depends a lot on the maritime strengths. The message is loud and clear—there is no more time to waste, the country has a large coastline, those states and ports and support services which move ahead will be given all support, those who continue to waste time and bicker may need to be aware of the consequences. There are nine state governments with coastal assets, there are some central government assets along the coast, the North East states have a good chance of being linked to the oceanways through Myanmar and/or Bangladesh, and most importantly—the country is not willing to accept a lack of efficiency any more.

If there was one message that went out from the IMW in Delhi, then it was this—the new ports in India are now the destinations of choice for trade, import, export and domestic. And if the older ports and their cities don’t provide this vital service, then nobody outside is going to mourn their change in status. To be given guided tours of the old dock systems in Kolkata and Mumbai and realise that things are so much still the same in both of them as they were decades ago, when this writer first joined a ship, may excite those seeking heritage and vintage thrills, but brought out titters and sniggers of “same shame” from some of the assembled delegates.

And then you are shown real-time satellite feeds and video clips of the newer ports, along with first-hand feedback from friends still sailing whose ships call these new generation Indian ports, and get invitations from more friends working at these ports—and you say to yourself, wish it was easier to secure permissions from the other authorities currently paranoid about security to bring this message to our own people that this, too, is India. And then you head into the exhibition area of the IMW, and suddenly, all this and more on display there.

The IMW should have had a “public day” for general visitors. Or place a mobile exhibition outside Red Gate, Indira Docks, Mumbai and Netaji Subhash Docks, Kolkata, for the people of those cities to see what their ports and cities could be.

The aim of the government is to put up at least 130% of projected capacity, both in captive and common user facilities, of all shipping-related needs, after which, may the most efficient survive and flourish. The participants at the IMW were reminded that if they wanted the freedom to grow, they had it, and there was no point in simply bringing up old issues. The approach was that the IMW heralded a solution oriented future, and was not going to be the complaint centre—and that was clear to see at IMW 2012 in Delhi.

(Veeresh Malik started and sold a couple of companies and is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)

Mumbai Port Trust, Taj Mahal Hotel, and a fraud on us?

Here's an interesting little episode - the land on which the Taj Mahal Hotel stands, all of it and some more nearby, is rented out to Indian Hotels (the Tata company that owns the Taj brand of hotels) for all of 13 lakhs a year.

http://www.business-standard.com/india/news/mumbai-port-trust-taj-hotel-lock-horns-over-land-rent/397727/

Now, what happens is that in the larger public interest, somebody wants to know how and why this is happening, after all, why not put the property to open auction?

The Mumbai Port Trust, which otherwise seeks central funds for expansion, will not ask its tenants to increase rentals!!

http://rti.india.gov.in/cic_decisions/CIC_SS_A_2011_000666_M_67686.pdf



Appeal Nos.CIC/SS/A/2011/000666

CENTRAL INFORMATION COMMISSION
B- Wing, 2nd Floor,
August Kranti Bhavan, Bhikaji Cama Place,
New Delhi - 110066
Appeal Nos.CIC/SS/A/2011/000666

PARTIES TO THE CASES:

Appellant : Shri Vikas Patel (present in person)
Respondent : Deputy Estate Manager, General Administrative Department,
Mumbai Port Trust, Mumbai (represented through Shri K.L. Sache, Dy.
Estate Manager, Mumbai Port Trust)
Date of Hearing : 26/09/2011

ORDER

1. The Appellant vide his RTI Application dated 27/10/2010 had sought
the photocopies of Lease Agreement executed between the Taj Mahal
Palace (“Taj Hotel”) situated at Apollo Bunder, Mumbai – 400 001 and
the Mumbai Port Trust (“MbPT”) along with all such Lease Renewal
Agreements which were executed subsequently between the said parties.

2. The CPIO of the Respondent authority vide his Order dated
09/11/2010 denied the above sought information under Section 8 (1) (e)
of the RTI Act. Aggrieved henceforth, the Appellant preferred first
appeal dated 07/12/2010 to the FAA of the Respondent authority. The
FAA dismissed the said first 1Appeal Nos.CIC/SS/A/2011/000666 appeal
vide his Order dated 19/01/2011 and held that MbPT has a fiduciary
relationship with its lessees and as such, the copies of the lease
agreement cannot be provided to the Appellant. The FAA further held
that there was no larger public interest involved in disclosing such
information and therefore, upheld the Order of the CPIO.

3. The Appellant has thereafter approached this Commission in second
appeal. The Commission has duly considered the submissions made by
both the parties and has perused through the material placed on
record.

4. The MbPT is constituted by the Major Port Trusts Act, 1963 (“MPT
Act”) enacted by the Parliament and the Preamble thereof reads as
follows: “An Act to make provision for the constitution of port
authorities for certain major ports in India and to vest the
administration, control and management of such ports in such
authorities and for matters connected therewith.”
For each major port trust established by the MPT Act, such as the
MbPT, the Central Government has constituted a Board of Trustees for
such major port under Section 3 of the MPT Act. One of the many powers
exercised by the said Board of Trustees under the MPT Act is stated in
Section 49 (3) of the said Act and reads as follows: “(3)
Notwithstanding anything contained in sub-section (1), the Board may,
by auction or by inviting tenders, lease any land or shed belonging to
it or in its possession or occupation at a rate higher than that
provided under sub-section (1).” 2Appeal Nos.CIC/SS/A/2011/000666
Section 57 of the MPT Act states that the Board of Trustees shall not
lease, farm, sell or alienate any power vested in it under the MPT Act
of levying rates without the prior sanction of Central Government.

In light of the afore-quoted provisions of the MPT Act, it becomes
clear that the power vested in the Board of Trustees of the MbPT to
execute lease agreement is a statutory power which cannot be exercised
without prior sanction of Central Government. The lease agreement
entered into between the MbPT and the Taj Hotel, therefore, cannot be
termed as being such information which is held by the MbPT in the
capacity of a fiduciary under Section 8 (1) (e) of the RTI Act.

5. It is apposite to mention the following excerpt from the decision
of the Hon’ble Kerala High Court in the case of ‘Treesa Irish vs
Central Information Commission’ [ILR 2010 (3) Kerala892]: “16. […] it
is clear that 'fiduciary relationship', although arises out of a
transaction involving trust between two parties, it requires something
more than mere trust to make the relationship fiduciary. It also
cannot be equated with mere privacy or confidentiality. At the heart
of fiduciary relationship lie reliance, de facto control and
dominance. A fiduciary relationship exists when confidence is reposed
on one side and there is resulting superiority and influence on the
other. The Canadian Courts have developed the following tests for
determining whether fiduciary relationship has been established, viz.
Appeal Nos.CIC/SS/A/2011/000666
a) The fiduciary has the scope for the exercise of some discretion or power;
b) The fiduciary can unilaterally exercise that power or discretion so
as to affect the beneficiary's legal or practical interests; and
c) The beneficiary is peculiarly vulnerable to or at the mercy of the
fiduciary holding the discretion or power.

Based on the legal principles arising from the above discussion, I am
inclined to add one more to the same viz.

d) The fiduciary is obliged to protect the interests of the other party.

From the material available on the subject, I am satisfied that those
tests can be applied for deciding the question as to whether there is
fiduciary relationship between two parties.”

(EMPHASIS ADDED)

6. Clearly, the features of a fiduciary relationship, as observed by
the Hon’ble High Court (supra), are missing in a lease agreement
entered into between MbPT as an exercise of a statutory power under
the MPT Act, with the Taj Hotel. Therefore, there is no merit in the
reasoning given by the FAA of the Respondent authority in this regard.

7. The Commission hereby directs the CPIO of the Respondent authority
to provide the information sought by the Appellant herein, i.e.
photocppies of the lease agreement entered into between the MbPT and
the Taj Hotel, Mumbai along with any subsequent renewal agreements
thereto, to the 4Appeal Nos.CIC/SS/A/2011/000666 Appellant within 15
days of receipt of this Order.

The Appeal is accordingly allowed.
(Sushma Singh)
Information Commissioner
30.09.2011
Authenticated True Copies
(D.C. Singh)
Deputy Registrar

Name & Address of Parties:

Sh. Vikas Patel,
Plot No. 31, Sector No. 9,
Above Central Bank of India,
Gandhidham – 370 201, Kutch – Gujrat

The PIO/CPIO,
Southern Division, Estate Department,
Mumbai Port Trust, “Vijaydeep”, Third Floor,
Shoorji Vallabhdas Marg, Mumbai – 400 001
The Appellate Authority/Transparency Officer,
Mumbai Port Trust, O/o Secretary, Port House,

2nd Floor, S.V. Marg, Ballard Estate, Mumbai – 400 001

Appeal Nos.CIC/SS/A/2011/000666

+++

Interesting, no??

____++++____

Releasing kidnapped Indians - the difference between seafarers and shore-staff

Can YOU spot the difference in the way the Ministry of Shipping and DG Shipping take forward matters for seafarers, and how the Ministry of External Affairs does so for others?




Here's a report from Mail Today/India Today:-


http://indiatoday.intoday.in/story/pranab-mukherjee-helped-free-kidnapped-indian-in-yemen/1/165246.html


http://epaper.mailtoday.in/epaperhome.aspx?issue=21122011

Pranab hand in freeing kidnapped Indian

Dipanjan Roy Chaudhury/ New Delhi

FOR Sukumar Roy Chaudhury ( 65), a Delhi- based geophysicist, his tour to Yemen was meant to provide a boost to his career. Instead, it turned out to be a nightmare. Chaudhury was abducted and held captive by the infamous Hussain gang for 10 days before he was freed a few days ago for a ransom of ` 5 crore. An IIT alumnus, Chaudhury is employed with a Faridabad- based oil and gas company. He was sent to Yemen to work for a local company with which the Indian firm has a tie- up. Chaudhury was kidnapped along with three Kazakh engineers when they were on their way to the work site, 150 km from the Yemeni capital, Sanna. A ransom of ` 10 crore was demanded for his release. While in captivity, Chaudhury was made to sleep on the floor and was given food once a day. Fortunately, he was allowed to use the phone. This enabled Chaudhury to contact his wife Anita who immediately got in touch with finance minister Pranab Mukherjee to secure her husband’s release. It has been learnt that Mukherjee acted swiftly and moved the ministry of external affairs ( MEA) to secure his release. It was nothing short of a secret mission launched by the MEA which saw Chaudhury being freed without much hassle. Though there were fears that with the government’s involvement the kidnappers could raise the ransom amount, the deal was finally settled for ` 5 crore. Currently lodged in a five- star hotel in Sanna, Chaudhury is expected to be back with his family in a few days after the legal formalities for his travel are completed. +++ And here's a report from the MASSA Newsletter of September 2011 for what the owners, agents and DG Shipping are doing for the seafarers stranded / kidnapped in Somalia especially those on the fully RPS compliant DG Shipping approved Indian Government authorised articles and agreements, working on Indian CDCs:- Meeting of OMCI Shipping with MUI / NUSI / MASSA for updating status of Asphalt Venture crew held captive in Somalia on 19th September, 2011. Capt. S. B. Kundargi, Secretary, MASSA attended the meeting and following is the gist of the meeting. Representative of Owners stated that owners are finding it difficult to continue expenses on account the seven seafarers held captive in Somalia. NUSI countered that all expenses will have to be borne by Owners as being done so far. Similar views were expressed by both at the meeting with DGS also. DGS has advised OMCI to discuss with Capt Vinay Singh on counseling methods used. They may also contact V Ships and Capt Rangnekar. Owners will now contact Red Cross directly without DGS involvement but keeping DGS advised on developments. DGS advised that pirates generally have been allowing medicines to be delivered to hostages and OMCI/Owners should check with family members on requirements and arrange accordingly. OMCI stated that their representatives are in regular contact with the seven seafarers. All are healthy but some with complaints of skin infection. They are kept in huts and are being shifted to different locations. 3) Meeting on 22nd September, 2011 in DGS Conference Room to discuss Creating Awareness about Merchant Navy in Tier 3 and 4 cities. The preliminary meeting of the committee for working out modus operandi to create more awareness of seafaring profession was held under the chairmanship of Joint Director General of Shipping on 22.09.2010. ++++ And then, the same DG Shipping had this meeting:- The modus operandi to create more awareness of seafaring profession: The Chairman explained the need for creating awareness of seafaring profession. The steps taken earlier on this issue were discussed. It was pointed out that during 2007-2008 road shows were arranged with involvement of INSA, FOSMA, & MASSA. Help lines were also introduced by MASSA & FOSMA. However, all these activities are at present practically not functional due to various reasons. Mckinsey report has indicated that there is additional demand on requirement of manpower in world shipping, which indicates that, the requirement of Indian resources in the coming years is going to be doubled. Hence, this issue needs detailed deliberations to work out a feasible road map to attain the target. Formation of sub-committee is, therefore, the primary need & this group itself may be formed as a sub-committee. It was also pointed out that the financial support to the project may also be forthcoming from overseas agencies for specific initiatives. FOSMA and MASSA representatives pointed out that if efforts have to be put up to create an awareness among the general public regarding the seafaring profession, it will be advisable to conduct road shows and to target students of 10 to 12 standards preferably during the start of the academic sessions in schools and colleges. They were also of the opinion that quality of marine training is declining and opined that a system shall be evolved by which the responsibility of academics will be with Indian Maritime University and the responsibility for the competency will be with Directorate General of Shipping. General awareness can also be created by printed material, electronic media & road shows, among other means. INSA was of the concerned view that there is a huge turn out from the Maritime training Institutes but due to lack of training berths, there is excess manpower available. The training is at present commercialized. Hence, awareness of seafaring profession is not warranted at this stage. The need for quality in training has to be given priority at present. Perhaps evaluating and benchmarking for the training institute may help the students choose the correct institute. After a detailed deliberations on the issue the following decisions were arrived at which can be put forth to the National Shipping Board. 1. The issue on creating awareness of seafaring profession has to be looked into comprehensively considering the present manpower availability, quality of training imparted, management and control of training institute, etc. 2. Considering the above it is advisable to have a two track approach as follows i) Enhancing the quality of training including controlling of the training slots in view of training berths, by controlling & monitoring by weeding out infructuous institutes, encouraging the 100% placement granted instead, i.e. sponsorship for admission for training. ii) Creating awareness of seafaring profession by following means. Awareness programme- multiprong approach - counseling in schools, advertisements, participation in education fairs, e-media, visual media, etc. Both these functions can be parallel taken up in a gradual manner. 3. The sub-committee has suggested that the above members may work on this issue and give their specific and elaborated recommendations after subsequent meetings. +++ Truth is this:- when senior seafarers go to DG Shipping for help in such cases, then people like Capt. Harish Khatri are reported to have told them to get out or he will call the police and have them arrested - forgetting that in this day and age these things are so easily recorded, both audio and video. Do our shipping administrators think that we are still supplicants dependant on them, isn't the DG's interview in SAARC Journal quoted below reason enough for them to hang their faces in shame?

Such are the strange ways of our Indian Government.

In September 2005 the Government of India announced by a gazzette notification the "Entry of Vessels into Ports Rules, 2005." Amongst other things, it spelt out the provisions for insurance on foreign ships entering India, to cover pollution and wreck removal.

In July 2006, the Ministry of Shipping, TR Baalu presiding, issued another notice putting the above Rule into abeyance till further orders.

A response to an RTI on this subject is awaited. Interim if anybody has any internal information on this, anonymity and confidentialities assured.

The Great Iron Ore Export scam - from Indian seaports . . .

Previously published at Moneylife . . .

http://moneylife.in/article/the-great-iron-ore-rip-off-buy-from-india-for-60-s-and-sell-it-for-around-200-a-tonne-landed-price-overseas/16790.html

The Great Iron Ore Rip-Off: Buy from India for 60 cents, and sell it for around $200 a tonne (landed price) overseas

As a nation, we are peddling our scarce natural resources that cannot be replenished. Global players are mining iron ore for a song, destroying the natural habitat around the mines and shipping it to metal-hungry destinations and making super-profits. As usual, the powers-that-be are silent  

As an ex-seafarer, the first cargo I loaded on a ship, way back in 1975, was iron ore from Vishakhapatnam (or Vizag) to Japan. Always interested in matters beyond my purview, I remember that the charterer in this case was the government-controlled monolith, MMTC (Minerals and Metals TradingCorporation), the buyer a Japanese trading house connected with Sumitomo-and that the price achieved for this shipment, delivered at the port of Nagoya, way back then, was around $17 a tonne.

The price that the Indian Government achieved, through MMTC, was around $10-$11 per tonne -ex-Vizag, loaded onto our ship. The rest was on freight and other costs. Laughingly, it was pointed out that kickbacks were high, around 15%-20%, but were likely to be impacted because the Emergency was on everybody's heads in those days. Even people at MMTC and STC (StateTrading Corporation) had to be careful.

This was for what is known as '60% FE lumps'. A very highly sought-after grade of iron ore that we export from India, and the rate is set in such a way that it permits for variations in quality along a few other parameters, using this as a benchmark.

60% FE in lumps is about as good as it gets. The Japanese term for it was the equivalent of malai, or "full cream", and we have a lot more in India. In the area, largely, called "Maoist", but that's not the subject of the debate.

The debate then was whether it was more profitable for the Nation of India to ship this iron ore to the US-East Coast (Norfolk) area-where the price achieved was around $25-$27 a tonne, landed.

What came in the way, in those days, was not just the freight rate-ships had to go around the Cape, since the Suez was closed. In addition, it was whispered,doing business with Japan was better for some corrupt people, since the Japanese were rumoured to not be averse to the idea of more than a few dollars per tonne as kickbacks, and making "relationships", while the Americans got slightly moralistic about such things then-5% to 7% was what was supposed to be their limit, and you often had to accept it in wheat.

Which was not a good idea, because India was getting 'free' wheat under the PL-480 scheme in any case in those days, which is a scam many may have forgotten.

In addition, the Japanese were very keen to provide the funding as well astechnology for building a railway line from Vizag into the pristine Aruku Valley area, to get the iron ore out more efficiently, and this was pushed through as a 'people-friendly' step to help connect one of the remotest parts of central India to the rest of the country.

Of course, nothing is free, so India was going to pay the Japanese back. In iron ore. And remember, west of Hong Kong was a huge swamp called the Pearl River Delta, then. And South Korea? South Korea was still teaching its sailors to work on ships. Under Indians.

So, we sold our iron ore in Aruku Valley to the Japanese for a song. How much they sell it in further trading, now that China and South Korea are also consumers, would be interesting to learn. Chances are, the onwards sale is atmarket prices, while the first sale is at the old pre-negotiated prices. We are still paying for that Railway Line, remember?

Think of it like this-you have a home in a remote part of, say, Maharashtra. You have some great boulders there, which can be extracted, broken down, and made into brilliant granite slabs. But you don't want to sell them or move them, even to the nice Japanese guy who comes to your house, because technically you can't and even if you could, you want to sell it one rock at a time, because the house is in a remote place.

So now the Japanese guy goes back to the government guy, and makes him a deal-the Japanese will pretend he is loaning money to the government, which will then cover the loan through its public sector banks, and the Japanese guy will then make a road to your house which nobody else can use, not even you, and then he will take all the granite away as soon as he can, for free, in payment for the road he helped build.

You will be left sucking your thumb, you may have to pay a toll to enter your own house on that nice new road, and if you protest, you will be called Maoist. But then, this is not about them.

That railway line from Vizag up into one of the prettiest parts of India rapidly being mined out of existence (the natural caverns being formed nearby are used as oil reservoirs, incidentally) now stands as a tribute to Japanese engineering skills. And runs between 40-80 rakes of iron loaded trains to the port cities of Vizag and Gangavaram, from where it heads off mainly towards the hungry steel mills of China, South Korea and Japan. But there are hardly any passenger trains on that route, and the few that operate, have to give way to the iron ore trains. I have been on this route once-and reached the other end 24 hours late, as we kept giving "pass" to iron ore rakes thundering past us.

To anybody except the most foolish it is clear to those who know this industrythat we are as a nation selling our resources. Fair enough, this does not want to become yet another article on the political and sociological, as well as economic aspects of this trade-people have been called 'Maoist' for less. But can we look at the numbers again?

The international prices of iron ore are shooting upwards, by as much as $20 to $30 in the last few weeks, and anticipated to go up by a similar amount to around $200 per metric tonne in the next few months. This is despite much lower requirements in Japan, and slightly reduced requirements in China, the two top global markets for iron ore. The top three suppliers of iron ore are Australia, Brazil and India.

The indicative price currently is around $170 per metric tonne for iron-ore lumps with a 60% FE content, cost plus freight landed at Qingdao in China as a benchmark, and freight rates varying from $8 to $16 per metric tonne depending on size of ship as well as market forces on freight rates. The saleprice of this kind of iron ore from Australia or Brazil is around $130-$150 per metric tonne, and rising, with some minor amounts for insurance, loading costs, holding costs, and other such expenses.

The royalty paid to the Indian government by the new iron ore exporters being invited in, like Posco, is Rs27 rupees a tonne for iron ore lumps. That's all. 60 cents. Not even a dollar a tonne. The rest is, apparently, part of the whole loan-loan-loan and more loan cycle, since Posco will help develop the area. At every stage in this financial game, there is a transaction cost, and it is instead of being in percentage points, now into multiples of the costs involved.

Agreed, there is a cost involved in mining the iron ore, extracting it, and converting it into lumps, which even after allowing for all sorts of cost overruns is not going to exceed $20 a tonne-an extremely high outer estimate. Agreed there is a cost towards "developing" the area, whatever it means. Agreed, some babu somewhere can justify how after 35 years, our export price is down from $15 a tonne to 60 cents a tonne.

But can anybody justify why the Indian government, the state government, the various public sector entities, the watchdogs, the parliamentary committees, the environmentalists, the media, everybody and more-why can't we get even some percentage of the increase in iron ore prices to the country's account?

Assuming the price has gone up by $50 a tonne, all other costs remaining the same, shouldn't the nation get at least some part of it-especially when all we appear to be getting is 60 cents a tonne?

And that is why anybody who disagrees will be called a Maoist, a seditionist and an anti-national. But this article just wants to know-how much of the increased price will we in India get?

An aside: The same companies who bid for iron ore mines in India, also bid for iron ore mines elsewhere in the world. The higher costs being achieved make it feasible to prospect for and take iron ore out from all new areas. There are more than a few Indian companies in the running for this business, and the royalty that apparently some of them are willing to pay for "futures" is in the $100 plus levels-for future imports into India, when we become an iron ore scarce and deficit region. Already plans are being made to ensure that ports being developed under infrastructure loans are geared up to handle current export and future import of iron ore.