New Delhi: With the defence ministry set to take over Vizag’s Hindustan Shipyard Ltd (HSL) for building military vessels for the navy, the government intends to set up a new commercial shipyard on the east cost. The new shipyard will be built through the joint venture (public-private partnership) route and the strategic partner from the private sector will be selected through a competitive process, a senior government official told FE.
“With the HSL going to the defence, our merchant shipbuilding capacity in the public sector will come down significantly. From the strategic point of view also, it is necessary to have a large shipyard on the east cost wherein the government has a significant stake,” the official said. The shipping ministry has included the proposal for a new public-private shipyard in the cabinet note on transfer of HSL, the source added. The JV shipyard will require total investment of about Rs. 4,000 crore, although the exact plans are to be made. The government is also weighing options on the exact location of the new shipyard.
Currently, India has seven public sector commercial shipyards, besides the naval shipyards in Mumbai and Vizag. Apart from HSL, Cochin Shipyard Ltd, Alcock Ashdown, Garden Peach, Goa Shipyard, Mazagoan Dock and Hooghly Docks are the other public sector shipyards. There are over thirty private units that either build ships or repair them, like Bharati, L&T, Pipavav, Sesa Goa, Alang Marina, ABG, Adani etc.
India’s ship fleet is now 938-strong, and the gross tonnage is 9.38 million tonne (mt). The government had earlier set a target to increase the capacity to 15 mt by 2012, but the global economic crisis has upset that plan. Indian carriers handle less than 10% of India’s foreign trade at present.
The defence and shipping ministries have already agreed for transfer of HSL to the former.
Since its inception, HSL has built around 150 ships and repaired over 1,800 besides undertaking naval repairs. The shipyard also has work orders worth Rs 2,000 crore to be completed by March 2011, a recent agency report said.
HSL’s website says its objective is “to become a world class ship yard, to serve the shipping requirement of the mercantile marine, oil & offshore and defence sectors.” With its strategic location, HSL’s new role would be build frigates, destroyers and submarines for the navy. With the nation’s naval fleet ageing, the government has a target to build 100 warships over the next 10 years and HSL will be a major component of the plan. The defence ministry has plans to infuse funds into the unit to equip it for the planned defence production.
The shipping ministry had earlier got the public sector unit’s current assets valued at over Rs 1,000 crore by Axis Bank.
Currently, Japan, China and Korea share 70% of the world’s shipbuilding capacity between themselves.
Source : FinancialExpress