Dredging Corp mulls JV for Sethusamudram work

State-owned Dredging Corporation of India Limited (DCI) is exploring the possibilities of participating in the tendering process of the Sethusamudram ship channel project.

DCI is already working on about 16 per cent of the Sethusamudram channel's dredging work on a nomination basis. It is planning to form a joint venture with a foreign dredging company to bid for more work.

"Our main constraint is shortage of dredgers. So, we will try for joint ventures with foreign dredging companies to take up this work. If we succeed, we will participate in the tendering process," Neerav Kumar Gupta, chairman and managing director, DCI, told Business Standard.

DCI is to take an equity stake in the Sethusamudram canal project to the tune of Rs 30 crore. The entire project cost is Rs 2,427 crore, of which around Rs 972 crore would be raised through equity. The central government is to put in about Rs 495 crore equity funds in to the project, about 51 per cent of the total equity.

Of the estimated 82.3 million cubic metres of dredging work at the proposed Sethusamudram project, the government has allotted 13.5 million cubic metres of work to DCI on a nomination basis. For the remaining dredging work, the government has called for international bidders through tendering process.

DCI, which is the largest dredging company in the country and the sixth largest in the world dredging market, has deployed one of its trailer suction dredgers of 4,500 hopper capacity built by IHC Holland for the dredging work at Sethusamudram channel in E-3 and E-4 stretch, with an estimated quantity of 13.5 million cubic metres.

"We started the dredging work from June 25 itself. The work will be completed within two years from now," he said. To speed up the work, the company is planning to deploy another vessel with 7,500 hopper capacity soon. It is also planning to deploy a cutter suction dredger. Meanwhile, DCI will get Rs 4.5 crore every month on the 4,500 hopper capacity dredger and Rs 7.5 crore on the 7,500 hopper capacity dredger as advances, Gupta said.

The scope for dredging works in the country is enormous. But, DCI is unable to take advantage of the situation as it is facing a shortage of dredging fleet.

"We have sent two vessels to Bahrain. But now, we want to bring back one vessel to meet the local demand," he said. DCI has decided to purchase two dredgers at a cost of about Rs 575 crore. "We are expecting the two dredgers to join the fleet by 2007," Gupta added.

At present, DCI's fleet comprises 12 dredgers of which 10 have hopper capacity of 55 million cubic metres and two cutter suction dredgers with a combined capacity of 25.8 kw installed power.