The Hindu Business Line : SCI board okays investment in Sethusamudram project

THE board of directors of Shipping Corporation of India (SCI) on Saturday approved a proposal to invest Rs 50 crore in the equity capital of the Rs 2,000-crore Sethusamudram canal project.

The board, at its last meeting, had deferred a decision on the proposal as some members wanted more details of the project and a report on its cost-benefit analysis. In fact, some members had even questioned the rationale of SCI investing in the project.

However, the board on Saturday approved the proposal on the ground that the project is fully backed by the Union Government, which owns nearly 80 per cent of SCI's equity, said a source familiar with the development.

Other equity holders in the special purpose vehicle set up to implement the project are Dredging Corporation of India and the five major ports of Tuticorin, Chennai, Ennore, Visakhapatnam and Paradip.

The project involves creating a navigable channel from the Gulf of Mannar to the Bay of Bengal through the Palk Bay. The navigation route will originate from the Tuticorin new harbour and proceed to south east of Pamban Island, pass through a canal created in Adams Bridge and run parallel to the International Medial Line.

This is estimated to reduce the voyage time of ships from the East Coast to the West Coast by 400 nautical miles and save roughly 36 hours of sailing time. The five ports are understood to have agreed to the proposal to invest in the project.

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