SCI to buy 26 ships for Rs 5,154 cr

Shipping Corporation of India (SCI) will acquire 26 vessels at a cost of Rs 5,154 crore over the next 16 months.

While the company proposed to acquire 16 vessels worth Rs 2,813 crore in four tranches, it planned to go for block approval for 10 vessels, Shipping, Road Transport and Highways Minister T R Baalu said at the Economic Editors' Conference.

"The Planning Commission has given an in-principle approval to the acquisition of 16 vessels," a shipping department official said. He added that a concrete proposal for seeking block approval was being formulated.

Officials said the government was going for a block approval to ensure speedy acquisition to meet the Tenth Plan (2002-2007) target, as the SCI could not go for any vessel acquisition for nearly a year when disinvestment was being planned.

On the issue of LNG shipping guidelines that make it mandatory for a company bringing in LNG into the country to have 26 per cent Indian participation, Baalu said the commerce ministry had circulated a note for reviewing the norms.

He said the shipping department had maintained that only Indian-flag vessels should be allowed to import LNG. In addition, it had proposed that imports be done on free-on-board basis where the shipping arrangements were made by India.

He said the ministry had also insisted that the foreign partner in the LNG shipping venture also transferred expertise needed for operating LNG vessels to the Indian crew within five years.

On the roads sector Baalu said the model concession agreement for Build Operate and Transfer projects would be finalised in a month. Road transport department officials added that the unresolved issue of compensation to the contractors, in case of change in tax laws, had been settled.

Loss of more than Rs 1 crore would be compensated by the government, they said. Commenting on the progress of the Golden Quadrilateral, Baalu said 5,063 km of the 5,856-km stretch was constructed and the government expected to complete 96 per cent of the work by June 2006. He added that the work had been particularly slow on Delhi-Kolkata and Chennai-Kolkata stretches because four projects had to be re-tendered.