Dredging Corp in long-term Bahrain deal

The Dredging Corporation of India Ltd (DCIL) has entered into a long-term lease agreement worth Rs 55 crore with a Bahrain-based firm for undertaking dredging work in the country.

DCIL is also slated to take a decision on purchasing two more dredgers worth Rs 200 crore in the next couple of months, according to a senior official of the company.

G G Rao, director operations and technical, DCIL told Business Standard that the corporation had entered into the deal with the Bahrain-based firm for outsourced dredging work in the oil-rich nation. Two dredgers from the company's fleet would be utilised in dredging operations for the next 21 months.

"This long term lease is a unique opportunity for us in terms of eventually being able to market our dredging services directly. These kind of engagements will be able to help us better gauge what needs to be done in the long term to tap the market opportunity abroad," Rao said.

The lease agreement will see DCIL deploy one dredger for a consideration of about $25,000 per day for a period of 15 months, and another smaller dredger for a fee of $5,000 per day for a period of 6 months.

DCIL which recently came out with a public issue is transitioning from a protectionist era to one of competition and needs to substantially improve its capacity. After the recent IPO the government s stake has come down from 98.6 per cent to 78.6 per cent.

DCIL has a stranglehold of the Indian dredging market with an estimated 89 per cent market share of the estimated 65 million cubic meter major port dredging market in India, including 92 per cent of India s major port maintenance dredging market.

This kind of a high market share was due to the government's policy which made DCIL the only organisation that ports could negotiate with for dredging services.