December 02, 2008

Reliance Power to float a shipping subsidiary to import coal

TNN reported that Anil Dhirubhai Ambani Group’s Reliance Power Limited, after secured coal mines in Indonesia, is now planning to float a shipping subsidiary to cart the coal to India and is looking at an investment of around USD 1.2 billion initially.

Reliance Power has drawn up an ambitious strategy for its shipping business in the next three years. It plans to have a fleet size of almost 12 vessels, including 5 capsize carriers. It has also appointed international brokers like Clarkson to work out finer details, and the final orders are expected to be placed in about two months. Shipping yards in China, Japan and Korea are to be tapped for ship building.

As per report, Reliance Power plans to have 4 to 5 capsize vessels, having capacities of between 160,000 tonne and 200,000 tonne and around 5 Panamax ships. As of now, GE Shipping is the only Indian company to own capsize vessels, which require a draft of almost 18 meters.

For Reliance Power, this will be a backward integration move, as it will help the company in transportation of coal, the fuel for its power projects. The proposed shipping company will have an assured business of around 20 million tonne annually in the initial stage, which is equivalent to the coal required for Reliance Power’s Krishnapatnam and Shahapur plants. Reliance Power has won the rights to build and operate two ultra mega power projects in the past 6 months.