With the agreement of GAIL India to use Indian
vessels, to carry part of the liquefied natural gas it imports, the Shipping
Ministry is pushing for long term cargo support from sectors like petroleum,
steel and fertiliser for local shipping companies.
In the recent past, the Ministry held a meeting
with state-run companies such as Oil & Natural Gas Corp, Indian Oil Corp,
Steel Authority of India and Fertilizer Corporation of India, urging them to
give transportation contracts to Shipping Corporation of India or other Indian
firms for a period around 5 to 10 years. This move will definitely give the
Shipping Industry a boost as the Ministry pushes for long term cargo support
from other sectors.
The move is ultimately directed towards encouraging
domestic shipbuilding, in line with the present Government's aim of supporting
the local manufacturing sector.
A senior Government official was heard commenting
that, they are suggesting the PSUs to devise a long-term cost formula based on
global freight indices for signing up the contracts with the Indian shipping lines
so that no one is at loss. He further stated that banks would easily agree to
extend financing to the shipyards for building of the required vessels if there
is cargo commitment.
Most of the carriers required to transport liquid
and dry bulk cargo, such as very large crude carriers (VLCC), capesize bulkers
or Aframax tankers aren't built in India at present and technological expertise
will have to be imported.
The shipbuilding sector has been reeling due to
oversupply of vessels and a trend of falling demand for cargo due to the global
economic crisis. Most companies had either cancelled their new orders or put
them on hold.
Mr. Anil Devli, Chief Operation Officer at the
Indian Register of Shipping said that, “Japan, Korea and China have promoted
domestic shipbuilding by ensuring that the cargo is transported only on their
national carriers. We need to support our industry in a similar way,”
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