The Hindu Business Line : SCI to review LR 1 tanker purchase plan

STATE-owned national flag carrier Shipping Corporation of India (SCI) is reviewing its plans to buy two new Long Range 1 (LR 1) tankers of 60,000 dead weight tonnes (dwt) each due to non-availability of suitable shipyards for building the tankers.

The LR 1 tankers were to be acquired for replacing two ageing lighterage tankers, C.V. Raman and Homi Bhaba. For this, SCI needed vessels that were not of standard size but tankers that were specially designed to suit its specifications. "But given the high shipbuilding market scenario, it is difficult to get yards to agree for that straightaway," a Shipping Ministry official said.

The yards want to take advantage of the huge demand for new orders to build bigger and high-value ships, he explained.

The management of SCI had circulated a proposal at its June 30 board meeting to shelve the LR 1 tanker acquisition for the present and take it up at a later stage. "However, this item, along with the proposal to buy two new very large crude carriers of 3,00,000 dwt each, were deferred in the absence of government directors at the board meeting," the official said.

SCI was accorded board approval during a meeting, held on April 15-16 this year, to buy the LR 1 tankers, which at current prices are estimated to cost $64 million. Following the board approval, SCI had even floated global tenders inviting technical offers from shipyards for building the new tankers. "But SCI realised that it was difficult to get suitable yards to undertake the job," the official said.

The proposal to shelve the purchase of two LR 1 tankers and the plan to buy two new VLCCs would now be discussed at the next board meeting slated for July-end. Besides, the board is also expected to discuss the acquisition of six new Handymax bulk carriers of 50,000-55,000 dwt each, which are meant to replace a few of the 1986-built similar carriers operated by the company.

Meanwhile, SCI has short-listed one Korean and one Chinese ship yard to build two new Capesize bulk carriers of 1,70,000 dwt each. The price bids from the two technically qualified yards will be called before the acquisition proposal is taken to the Public Investment Board and the Cabinet Committee on Economic Affairs.