The Hindu Business Line : Global players eye Indian dredging market

The opportunities
Penta-Ocean of Japan, Great Lakes Dredge & Dock Co of the US and Hyundai Engineering of Korea are among the companies evincing interest.
The country's present capital dredging market is estimated at about Rs 700-800 crore.
As per the Tenth Year Plan, the various port expansion programmes would require a total capital dredging requirement of about 144 million cubic metres, involving all the major ports.

Mumbai , Sept. 19

International dredging majors from Belgium, the Netherlands, Japan, Korea and the US are increasingly setting sail for India.

These companies see significant opportunities in the domestic dredging sector, especially with India lining up major port expansion projects and the clearing of the decks for implementation of the Rs 2,500-crore Sethusamudram ship channel projects.

Apart from the Netherlands and Belgium-based companies that have already set up shop in India, other companies such as Penta-Ocean of Japan, Great Lakes Dredge & Dock Co of the US and Hyundai Engineering of Korea are looking at India as a major growth opportunity in the dredging sector. In fact, these international players command a major share in the global dredging market.

This trend was evident in the recent response to a tender from Jawaharlal Nehru Port for deepening of its channel to accommodate bigger ships at a cost of Rs 800 crore.

The port short-listed six companies out of the 10 that showed interest in the project — state-owned Dredging Corporation of India, Van Oord BV of the Netherlands, Boscalis of the Netherlands, Jan de Nul of Belgium, Penta-Ocean and Hyundai. The port has called for a pre-bid meeting on September 26.

Dredging in phases

At present, large size vessels having a draught of 12.5 metres have to navigate through Mumbai harbour channel and the JNPT channel making use of the tidal window. In the light of this, the port is deepening and widening the channel in two phases — in the first phase the channel will be dredged up to 14 metres draught to accommodate container vessels of capacity 6,000 TEUs and in the second phase the draught will be further increased to 15 metres.

Port expansion projects

The country's present capital dredging market is estimated at about Rs 700-800 crore. But with the port sector going through a significant expansion phase, the market is expected to grow faster in the years to come. As per the Government's Tenth Year Plan, the various port expansion programmes would require a total capital dredging requirement of about 144 million cubic metres during this period, involving all the major ports.

"But, what is expected to give a major thrust to the growth in this segment is the Sethusamudram project," an analyst said. DCI has already been awarded, on nomination basis, the first of the four sections in the 167-km long channel — this section involves dredging to the extent of 13.5 million cubic metres to get a draft of 12 metres.

Competitive bidding

The other three sections are open to competitive bidding, with DCI and the foreign dredging majors competing. Totally, the project envisages dredging of 82.5 million cubic metres, with the cost of the project estimated to be Rs 2,427 crore.

Analysts also feel that there could be some consolidation in the domestic dredging market in the form of strategic alliances between two or more companies or joint bidding for projects.