SCI plans to build vessels

The Shipping Corporation of India (SCI), India?s largest liner shipping company, plans to start building ships and is currently in talks with private shipbuilders at home and abroad for a shipyard project that will cost around Rs 4,000 crore ($1.02 billion).

“We are negotiating with both Indian shipbuilders as well as foreign companies. An agreement is expected to be formalised in two month?s time,” said SCI chairman and managing director S. Hajara. If the SCI decides to go with a foreign partner, it will have to approach the respective state governments for allotment of land. Hajara refused to divulge the names of shipyards the SCI is talking to.

The company plans to rely on debt to fund the joint venture shipyard project. “Our share will entirely depend on the equity structure we have with the partner. However, we plan to raise debt to fund our share,” Hajara said.

Currently, SCI operates 83 ships with a capacity of 4.8 million DWT which accounts for 35% of India?s total shipping tonnage. It has placed orders for another 28 ships totaling around 2.4 million DWT that will cost around Rs 6,500 crore. The orders include container ships, tankers, bulk carriers and anchor-handling tugs.

Over the next three years, the SCI plans to place orders for another 50 vessels, subject to government approvals. The company plans to achieve a total tonnage of 8 million DWT by 2011. During this period, the company may have to scrap an estimated 1 million DWT as 30% of its fleet comprises single hull ships.