CDL chasing navy and civil jobs

Sri Lanka’s Colombo Dockyard Ltd (CDL), the island’s sole listed shipbuilder, is bidding for three new local ship building contracts, including one from the navy where it has tied up with a Croatian yard, officials said. The yard, a subsidiary of Japan’s Onomichi Dockyard Co. which provides management and technical expertise, said its repair business is doing well and that it is in talks with an Indian client for more vessels.

???The ship repair business is doing extremely well at the moment,?? CDL???s chief executive Mangala Yapa said. ???In ship building, we’re on schedule to deliver the first anchor handling tug to India’s Greatship by mid-December 2007 and to launch the second vessel this month. So this year ship building should give a reasonable return.?? The yard is in talks with Greatship on building more advanced vessels for the company’s offshore oil industry support services business.

The newest tender DCL is bidding for is a research vessel for the ministry of fisheries and aquatic resources. The second tender is to build a tug boat for the Ceylon Petroleum Corporation to be used at its offshore mooring buoy which tankers use to unload crude oil. CDL has also tied up with a Croatian shipyard and submitted a bid in an international tender to build bigger patrol boats for the Sri Lanka navy. The Croatian yard will provide the technology to build the new type of vessels. The navy is seeking bigger patrol vessels to enhance its capacity against the Tamil Tigers arms smuggling efforts, especially deep in the Indian Ocean.

Yapa said the yard has to compete with other yards some of which get state subsidies.

The Indian government has just agreed to extend a 30% subsidy given to Indian yards for building ships for Indian and foreign clients, giving them a cost advantage over yards like CDL.

Yapa said that in the absence of subsidies, government policy should be to support the local ship building industry by giving priority to the local yard at least for local orders so they can develop further.