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Mamuni Das

Move driven by Navy's strategic interests in the region

New Delhi May 28 With Indian Navy's strategic interests in the region around Visakhapatnam and its plan to set up a new, futuristic base near the district, the Union Cabinet has referred a proposal to restructure Hindustan Shipyard Ltd (HSL) to a Group of Ministers (GoM) for further deliberations.

The GoM includes the Union Defence Minister, Mr A.K. Antony; the Union Minister for External Affairs, Mr Pranab Mukherjee; the Union Finance Minister, Mr P. Chidambaram; and the Union Minister of Shipping, Road Transport and Highways, Mr T.R. Baalu.

The proposal was referred to the GoM due to strategic interest of Indian Navy in HSL, it is learnt from Government sources.

The Department of Shipping had sent a Rs 799.61-crore proposal to the Cabinet Secretariat to rehabilitate and revive the shipyard, which now has an order-book of Rs 2,000 crore. A department-related Parliamentary standing committee had recommended expeditious clearance of the proposal.

HSL had been in a financial crisis for many years due to several factors that include poor order-book position, lack of working capital, managerial inadequacies and inability to raise funds from financial institutions due to a negative net worth. But driven by the recent surge in shipping industry, the order books of all shipyards in India including HSL have swelled.

NAVAL INTERESTS

The Indian Navy's Eastern Command, headquartered in Visakhapatnam, is the nodal point for naval operations on the eastern sea front.

Last year, the Indian Navy had announced plans to set up a new base on 5,000 acres, located about 50 km south of Visakhapatnam. The land acquisition process for the base is yet to be completed.

The new base is of strategic importance for the ENC to expand its facilities in an exclusive enclave by deepening a natural channel to have easy access to sea.

The need to set up a new base arose as the existing channel of Visakhapatnam port is shared by the Navy and the port has become crowded.

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