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Irano-Hind Shipping Company, a joint venture between Shipping Corporation of India and the Islamic Republic of Iran Shipping Line, is facing trouble in making payments for a ship being built at a South Korean yard on account of the economic sanctions against Iranian companies.
According to those familiar with the development, the vessel, a Suezmax tanker named Taj Mahal, said to be costing around $70 million, will be ready for delivery by this month-end. If payments are not made by then, the company may have to pay a penalty, they said.
Since Islamic Republic of Iran Shipping Lines is a company facing economic sanction because of Iran's nuclear programme, its Irano-Hind joint venture based in Teheran, also comes under the cloud. The public sector SCI holds 49 per cent stake in the joint venture while the Iranian partner owns the majority 51 per cent.
Loans refused
Since banks were refusing to give loans, the initial payments were made by Irano-Hind from its internal resources. Now, the company does not have enough funds to make the final payments and it has approached the promoters for contributions.
SCI has to pay 49 per cent of the balance amountdue to the yard. According to sources, around 70 per cent of the cost of the tanker has already been paid and what is remaining is only 30 per cent, and SCI has to pay its share. Officials at Irano–Hind at Teheran said they cannot comment on the matter. An SCI official said Irano-Hind officials are in talks with the Korean shipyard and they will come out with a solution. SCI may not be able to make direct payments owing to the economic sanction.
Board to meet
The board of Irano-Hind, expected to meet next week, will take a decision on how to resolve the issue, said an SCI official. SCI's share will come to less than Rs 50 crore, he said. In fact, ever since the economic sanction has been imposed on the Iranian partner, SCI has been seeking the Central Government's advice on the future of its joint venture, which was set up following a bilateral agreement between India and Iran, in 1975.
Irano-Hind, mainly operating tanker and bulk carriers, has been a successful joint of venture of SCI. The operation of the vessels has not been affected as they are in cross trade.
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