L&T angling for Dutch shipbuilding contract

India?s biggest engineering and construction firm, Larsen and Toubro Ltd, is in talks with a Dutch shipowner for a new building contract valued at more than $100 million (Rs397 crore).

“Yes, L&T is negotiating with a Dutch shipowner for a new building order. But, I cannot tell you the name of the shipowner, the number of ship order being negotiated or the value of the contract,” said Coert Kleijwegt, managing director of Hong Kong-based shipbroking firm Orient Dutch Shipbroking Ltd last week. Kleijwegt did say that the Dutch shipowner negotiating the deal was one of the shareholders of the Netherlands-based RollDock BV, which signed a memorandum of understanding with L&T on 13 February to built two modular carriers at Hazira yard in Gujarat, each having a cargo carrying capacity of 20,000 tonnes. This will take L&T?s order book to 10 ships.

L&T is currently building eight ships valued at about Rs1,150 crore comprising six for RollDock and two from BigLift Shipping BV, also of the Netherlands. L&T launched its shipbuilding venture in May 2006 with an order for building four ships valued at Rs440 crore for the Rotterdam-based shipping firm Zadeko Ship Management CV (now known as RollDock BV). RollDock placed a repeat order in August 2007 with L&T for building two more ships valued at more than $70 million.

“We have chosen L&T to build the ships on the basis of its quality of ships, timely delivery and price considerations,” said Diederik Legger, managing director, RollDock.

In June 2007, L&T won a contract for construction of two ships valued at more than $94.95 million from the Netherlands-based BigLift Shipping BV, a part of the Spliethoff Group.

Mumbai-based L&T has recently secured clearance from the Tamil Nadu cabinet to set up the country?s biggest shipbuilding facility at Kattupalli in Thiruvallur district near Chennai. The Rs3,000 crore proposed shipyard-cum-port project will be capable of building 25 ships per year, including five VLCCs of 300,000- 350,000 dwt and 20 Panamax bulk carriers. The yard will also be able to repair 50-60 ships a year.

L&T ventured into shipbuilding last year by converting part of its heavy engineering complex at Hazira into a yard that could build three 20,000 dwt cargo vessels in a year. The company is now expanding the capacity of the Hazira yard to six ships a year although it can?t build larger vessels because of the draught restrictions imposed by the river which is why L&T is building a new yard at Kattupalli.