Tata to order six large bulkers

India?s biggest private power utility, Tata Power Co. Ltd, is talking with shipbuilders in South Korea to construct six 175,000 dwt dry-bulk carriers, which it will use to carry coal from its mines in Indonesia to feed its ultra mega power plant at Mundra in Gujarat. The company will have to invest $550-600 million to buy the ships.

TPC Energy Asia Pte. Ltd is reportedly talking to Hyundai Heavy Industries and STX Shipbuilding to build the Capesize bulk carriers. TPC Energy Asia is a special-purpose vehicle incorporated in Singapore by Tata Power, for owning ships and trading in fuels.

Tata Power estimates it would need 8-9 ships to haul coal for the Mundra power project. “This will be met through a combination of outright purchases and hiring of ships on long-term contracts,” Tata Power managing director Prasad R. Menon said.

Tata Power is in a hurry to place orders for new ships and hire more on long-term contracts as they have to be ready by 2012, when its Rs17,000 crore, 4,000MW power plant becomes operational. “If Tata Power doesn?t order ships now, it will land in serious problems for transporting coal to the Mundra plant,” said a Mumbai-based executive with a South Korean shipbuilder. “Getting ships built by 2012 looks a tough task as most global yards are fully booked till 2010-11. Tata Power will have to shell out a premium on the current market price to get shipbuilding slots.”