November 21, 2008

SCI making pitch for change in procedures to purchase vessels

BL reported that Shipping Corporation of India Limited is lobbying for changes in the government’s ship acquisition procedures to make the process more flexible and expedite its own purchase of ships. It is also looking to promote shipbuilding facilities that have come up in India such as the ones run by Pipavav Shipyard Limited and Larsen & Toubro Limited.

Mr Umesh C Grover director technical & offshore at SCI said that "We are approaching the union shipping ministry with a proposal to relax the ship acquisition procedures by allowing us to consider new shipyards also. This will ensure more flexibility and better participation of shipyards in buying new ships."

SCI is also planning to invest more than USD 3 billion in 3 to 5 years to buy ships as it replaces its ageing fleet. It has placed orders with Korean yards such as Hyundai Heavy Industries Co Limited, Daewoo Shipbuilding and Marine Engineering Co Limited, STX Shipbuilding Co Limited and China’s Jinling Shipyard for building 28 ships, at an estimated cost of USD 1.3 billion.

SCI currently owns and operates about 20 dry bulk carriers. These are mostly of the handymax variety, which can typically carry as much as 60,000 tonnes of dry bulk commodities. Apart from the smaller size, SCI’s dry bulk carriers get lower rates as most of them are older ships and fetch fewer rates compared with younger vessels.