Financial Daily from THE HINDU group of publications
Monday, Jan 14, 2002
Logistics - Shipping
Plan for submarine repair yards
Mr Vedprakash P. Goyal, Union Minister for Shipping, and Mr R. Muthu, President, SICCI, at a meeting on `Strategies for development of port infrastructure to boost international trade' in Chennai on Sunday.
CHENNAI, Jan. 13
THE Shipping Ministry is exploring the possibility of making the public sector shipyards - Hindustan Shipyard Ltd (HSL), Visakhapatnam and Cochin Shipyard Ltd (CSL), Kochi, - into speciality submarine repair yards, the Union Minister for Shipping, Mr Vedprakash P Goyal, has said.
Things were at a preliminary stage, but the Ministry was seriously looking at this issue, said sources.
Addressing members of the Southern India Chamber of Commerce and Industry at a round-table meeting on `Strategies for development of port infrastructure to boost international trade,' here on Sunday, Mr Goyal said that due to lack of orders, the Ministry was looking at other alternatives to keep the two shipyards running. The shipyards already have expertise in submarine repairs.
"Normally, the unions would ask for increase in wage or bonus. But, in recent meetings, the HSL unions asked us for more business," he said.
With regard to HSL, the government has already taken up a viability study for a comprehensive restructuring. The CSL in 2000-01 recorded a net profit of Rs 38.49 crore and notched up the highest ship repair income so far of Rs 181.33 crore, making shipbuilding activity profitable for the first time.
Reacting to a point raised by Mr Tony Adam, Executive Committee Member, SICCI, that to operate and manage facilities being privatised at the ports, there was a tilt towards foreign players, Mr Goyal said that privatisation was mostly done through open tender system. If participating in such tenders as a single company was difficult, Indian firms can form groups and compete with foreign players. Such an opportunity was coming up through Shipping Corporation of India (SCI) disinvestment. The Minister said that a few days ago he had written to all the port trust chairmen seeking a detailed report on road connectivity between the ports and the national highways.
On the proposed strike by port trust workers opposing privatisation later this month, Mr Goyal told presspersons that with the threat of war in the country, workers should not go on a strike.
In his remarks, Mr Adam said that the port trusts should also be made accountable for any delay or productivity loss.
At present, the loss was borne only by the port users, despite not having any role in the delay and loss of productivity.
Capt. A K Bansal, Master Mariner, Bar-at-Law, said that the shipping industry required huge infusion of capital, both as equity and borrowings, at low interest rates and lower taxation.
The chamber President, Mr R. Muthu said that by the end of 1999, India had a fleet strength of 510 ships aggregating 70.5 million grt (gross registered tonnage.)
However, Indian ships carried only about 30 per cent of the country's overseas sea-borne cargo during that year.
The use of foreign vessels ultimately meant that foreign exchange was taken out of the country.
Every effort need to taken to ensure that there was long-term growth of Indian shipping, especially through various fiscal incentives for the industry.
Mr Goyal visited the Chennai port and had detailed discussions with the Chairman, Mr P Baskaradoss, and the various heads of departments, on the overall performance and various initiatives taken up at the port, said sources.
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