India changes plan to build new shipyards

The Indian shipping ministry has asked two state-owned shipyards to carry out feasibility studies and help build two new shipyards, one on the east and one on the west coast.

Shipping secretary A.P.V.N. Sarma said that the Kochi, Kerala-based Cochin Shipyard Ltd and Visakhapatnam, Andhra Pradesh-based Hindustan Shipyard Ltd have been tasked with the work.

In August 2005, the government planned to establish two shipyards capable of building and repairing large oil tankers up to 300,000 dwt at a total estimated cost of Rs7,195 crore. A year later, the shipping ministry asked state-run Indian Ports Association to implement the shipyard plan and subsequently decided that the Mumbai Port Trust and Ennore Port Ltd would act as nodal agencies to set up the shipyards, including inviting expressions of interest. That decision has now been scrapped.

“However, no budgetary allocation has been made for the two (proposed) yards,” the shipping secretary said. “It?s a vision at this stage.” Jesper Kjaedegaard, partner with UK-based logistics and infrastructure advisory firm Mercator International Llc, said there is no business case at present for two new shipyards in India. “Why do you want to build a yard, when ships are available at cheap prices?” Kjaedegaard asked. “Average ship prices are at a 10-year low.”

India has 27 shipyards, of which six are owned by the Union government. The country has a share of less than 1% in the global shipbuilding market.

Sarma admitted that shipyards worldwide are facing a tough time because of the global slump but maintained that “it is time to build infrastructure now”.