SCI rethinks fleet expansion

State-run Shipping Corp. of India Ltd (SCI) has scrapped a tender to buy four dry bulk cargo carriers as demand for ships declines in the face of a slowdown in global trade. In September, South Korea?s STX Shipbuilding offered to sell four 175,000DWT Capesize vessels at $94.10 million each.

SCI had got STX to extend the price bid validity date a few times since November but, last week, the corporation decided not to seek more extensions and scrapped the tender.

The company had announced plans to buy 72 new ships with an investment of $3.1 billion in the five-year period beginning 2007. SCI has so far ordered 32 new ships worth at least $1.88 billion at various global yards to replace some of its ageing fleet, which has to be decommissioned in line with global maritime regulations. It plans to acquire the remaining 40 new ships worth close to $2.6 billion over the next four years and is currently seeking about $2 billion in immediate funding to pay for the fleet expansion program. Most of the newbuildings will be tankers.