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Shipping Corp plans $3 bn investment

The state-owned SCI unveils an ambitious plan to add 60 million tonnes of vessel capacity in the Eleventh Plan with an investment of $3 billion, reports Deepak Joshi.

business Updated: Aug 10, 2007 21:45 IST
Deepak Joshi

State-owned Shipping Corporation of India (SCI) on Friday unveiled an ambitious plan to add 60 million tonnes of vessel capacity in the Eleventh Plan with an investment of $ 3 billion, to meet the growing trade requirements of the company. The public sector enterprise on Friday placed orders for four Aframax crude oil tankers and two LR-II size product tankers with South Korea-based Hyundai Heavy Industries.

The $400 million contract signed by SCI is the largest-ever shipbuilding deal in terms of value.

Speaking to reporters in the Capital, SCI Chairman and Managing Director S Hajara said there was an urgent need for a level-playing field and fiscal incentives in the shipping sector. “The Indian shipping industry requires an investment of $20 billion in the next four years.

SCI will be undertaking an investment of $3 billion in the next three-four years, including external commercial borrowings (ECBs) of nearly $2 billion,” he stated.

The company estimates ECBs of $400 million annually for the next five years.

Plans to establish a mega dredging alliance would be in place by the end of the year, Hajara. “We are in the process of appointing a consultant to prepare a detailed feasibility report within the next three months. Various government clearances would then be sought and the project should be operational by the end of the year,” he added.

According to the SCI chairman and managing director, the contract with Hyundai Heavy Industries was part of the block of 12 vessels for which SCI received approval from the government earlier this month. The other two projects in the block are four Panamax bulk carriers and 2x 5,000 TEU container vessels. SCI is processing these tow projects and details would be finalised soon, he said.

With the signing of these contracts, SCI’s order book position has increased to 18 vessels. All these vehicles would be delivered between October 2008 and April 2011. Delivery of these vessels would augment SCI’s fleet profile further, and provide it a competitive edge in the market.

SCI has plans to acquire another 56 vessels in various size categories during the the Eleventh Plan. The public sector enterprise has already floated global tenders for acquisition of Panamax bulk carriers.