The Hindu Business Line : Are foreign lines being wooed to bid for SCI?

A meeting scheduled by Mr Sinha with foreign shipping lines here on Thursday, close on the heels of the Government allowing 51 per cent foreign equity in SCI, has given rise to speculation in shipping circles here.

The Cabinet Committee on Disinvestment at its meeting on Tuesday decided to invite fresh EoIs for 51 per cent SCI equity. Interestingly, the earlier FDI cap of 25 per cent stake set for SCI was also removed. This would mean that foreign lines can bid for 51 per cent stake — or majority stake — in SCI.

Mr G.S. Sahni, Director-General of Shipping, who has invited foreign shipping lines to meet the Minister, said Thursday's meeting has been called to discuss "how to make the Indian flag more attractive". The DG Shipping has denied that the meeting has anything to do with disinvestment of SCI. The Minister wants to explore ways and means to make registration of merchant ships in India easier and more attractive, he said.

The CCD was forced to invite fresh bids for SCI as it had received a poor response earlier. A serious bidder such as Great Eastern Shipping Company had pulled out of the race following the delay in the disinvestment process. The company said it would not bid for SCI.

The Minister would be meeting representatives of foreign container lines operating service to and from India. Mr Julian Bevis, Chairman, Container Shipping Lines Association, confirmed that he had received an invitation from the Director-General of Shipping.

The Minister will also be meeting the top brass of select private sector Indian shipping companies separately. However, the agenda is different. The Shipping Minister is apparently upset over the plans of some Indian lines to flag their ships out of the Indian registry. The tax and other operating costs in India are said to be higher as compared to that of other maritime countries.

The Great Eastern Shipping, India's largest private sector shipping firm, has recently said it was planning to flag out some its fleet. Tolani Shipping has registered a newly acquired ship in Singapore. Varun Shipping, had registered two LPG carriers outside India.

Ships flagged out of India will not be subject to Indian tax laws while they could be owned by Indian companies through their subsidiaries. However, the dividend remitted by the subsidiary will be taxed in India. Some companies register their ships in tax heavens such as Mauritius and Panama.

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