Shipping Corporation of India (SCI), the state-owned shipping company, is moving ahead with a $1 billion newbuilding project and is approaching Chinese and South Korean shipyards.
Korean media reported that SCI’s newbuilding project includes 2 Very Large Crude Carriers (VLCCs) and 2+2 16,000 TEU container vessels, with a total value of about $1 billion, with the VLCCs expected to be about $120 million each and the container vessels expected to be about $180 million to $190 million each.
Chinese shipyards New Times Shipbuilding and Heng Li Heavy Industries and Korean shipyards HD Hyundai Heavy Industries, Samsung Heavy Industries and Hanwha Ocean are all under SCI’s consideration.
According to SCI’s plan, the order for new vessels is aimed at ensuring stable crude oil and cargo transportation capacity in the long term and enhancing the competitiveness of the Indian shipping industry. The new vessels will be equipped with state-of-the-art equipment, including fuel efficiency, environmental performance (dual fuel, LNG propulsion, etc.), and the latest cargo handling systems, etc. The VLCCs are planned to be conventionally-fueled, and the choice of fuel for the larger container vessels is yet to be determined.
SCI said that all vessels ordered must be built in experienced and trusted shipyards and comply with international environmental regulations (e.g. BWTS, carbon emissions, etc.). SCI will conduct a formal tender exercise and finalize the detailed specifications of the vessels after concluding the negotiations with the shipyards.
The Korean industry believes that SCI is more likely to choose Korean shipyards. Earlier, India’s state-owned energy company Oil and Natural Gas Corp (ONGC) asked HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries for quotes for the construction of three 100,000 cbm VLECs, stating that “Chinese yards are not under ONGC’s consideration in view of the government’s policies and risks.” Japanese yards also did not participate in the bidding due to recent order backlogs, labor shortages and relatively high construction costs.
Therefore, the Korean industry believes that SCI may take the same shipbuilding route as ONGC. However, according to the Indian government’s shipbuilding development policy, SCI may also take a cooperative shipbuilding approach, such as assembling at an Indian shipyard based on Korean cooperation.
SCI is understood to be one of the main companies working with the Indian government to promote the development of the shipbuilding industry, and is also the largest shipping company in India. Clarkson data show that SCI currently owns 125 ships, most of which are older than 15 years old. In the VLCC and container ships, SCI operates four container ships (two of which were built in 2009) and five VLCCs with an average age of 17 years. in order to promote the modernization of the fleet, the company may plan to add new ship orders in the future.
SCI is understood to be one of the main companies working with the Indian government to promote the development of the shipbuilding industry, and is also the largest shipping company in India. Clarkson data show that SCI currently owns 125 vessels, most of which are older than 15 years old. In terms of VLCCs and container vessels, SCI operates four container vessels (two of which were built in 2009) and five VLCCs with an average age of 17 years. In order to promote the modernization of its fleet, the company may plan to place additional orders for new vessels in the future.
India is currently promoting the development of its domestic shipbuilding industry and reducing its dependence on foreign-built vessels. As part of its “shipbuilding rise”, India is boosting its shipbuilding industry by expanding its fleet size, planning to invest $10 billion to build 112 tankers by 2024. In the first phase, 79 vessels will be built, of which 30 will be medium-range (MR) tankers. Through this move, India aims to increase the proportion of Chinese-made tankers in its fleet from the current 5% to 7% by 2030, and to 69% by 2047.
In addition to tankers, India in February this year announced the establishment of state-controlled Bharat Container Line (BCL), plans to spend to build a hundred container vessel ocean-going fleet, to independent capacity layout of the world’s major trade routes.
In addition, India is promoting a $400 billion marine project and plans to order at least 1,000 new vessels to reflect the country’s willingness to expand cooperation with developed countries in a number of areas, such as technology transfer, shipyard intelligence, financial support and human resources training, in order to achieve autonomy in the maritime and shipbuilding industries.