Financial Daily from THE HINDU group of publications
Friday, Sep 27, 2002
Financial Daily from THE HINDU group of publications Friday, Sep 27, 2002 |
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Logistics
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Shipping Government - Policy Shipbuilding subsidy policy for 5 more years Our Bureau
NEW DELHI, Sept. 26 THE Union Government has decided to continue with the shipbuilding subsidy policy for domestic yards for a further period of five years with certain modifications. The existing policy expired in August. A proposal piloted by the Ministry of Shipping to extend the policy for another five-year term was approved by the Cabinet Committee on Economic Affairs (CCEA) on Thursday. The revised shipbuilding policy will bring the State Government yards and private yards such as ABG Shipyard and Bharati Shipyard under its ambit. So far the policy was applicable to the seven public sector yards in the country. These included Cochin Shipyard Ltd, Hindustan Shipyard Ltd, Hooghly Dock & Port Engineers Ltd, Raja Bagan Dockyard of Central Inland Water Transport Corporation Ltd, Mazagon Docks Ltd, Goa Shipyard Ltd and Garden Reach Shipbuilders & Engineers Ltd. Under the policy, 30 per cent subsidy on the bid price would be available to shipyards on domestic orders obtained through global tender process for the construction of sea going vessel as defined under Section 3 (41) of the Merchant Shipping Act, 1958. However, the vessel must be a merchant vessel of minimum length of 80 metres. For export order obtained through global tender process or otherwise for the construction of any type/size of vessel, 30 per cent subsidy on the bid price or negotiated price as the case may be will be payable to the yard. However, the Government has decided to drop the interest differential subsidy scheme from the subsidy policy while extending it for a further period of five years. The interest differential subsidy scheme enabled ship owners to get loans at a concessional interest rate of nine per cent for up to 80 per cent of the acquisition cost when orders are placed with Indian yards. The difference between the concessional rate and the prevailing lending rate of banks would be reimbursed by the Government. Faced with stiff competition from Korean and Japanese yards, the off-take for the subsidy scheme has been very poor. Government sources said that none of the Indian public sector yards took advantage of the subsidy policy to bag orders against international competition.
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