October 07, 2008

L&T to start work on mega shipyard at Ennore soon

BL reported that Larsen & Toubro hopes to shortly begin work on the integrated shipbuilding yard and port at Ennore, north of Chennai. Its proposal for this project got the Tamil Nadu Government’s approval in January 2008 and the company is now discussing the agreement it will sign with the Government for the project.

The project’s cost has been estimated at INR 3,060 crore with the equity component being put at INR 1,100 crore. The Tamil Nadu Industrial Development Corporation, a State Government industrial promotion agency will hold a 3% equity stake in the venture.

According to the sources the process of earmarking the 1,200 acres of land for the project is on and once that is finished construction work will start. The project is expected to take 24 months for completion.

L&T plans to build large sized ships, including very large crude carriers at the shipbuilding yard. It is expected that the company will also make vessels for defense purposes.

L&T already has a ship building facility at Hazira in Gujarat and was looking to construct a Greenfield facility because the ship building business is booming.