Mercator Lines drops ports development plan

Mumbai-based shipping company Mercator Lines Ltd (MLL) has jettisoned the idea of developing minor ports in Gujarat in order to explore the possibilities to diversifying into other shipping segments.

"After a detailed project evaluation report, we have dropped the idea to foray into port development activities. MLL board has passed the resolution to opt out from port development," Mercator Lines Director Shalabh Mittal told Buisness Standard.

Mittal said though the company had evinced its interest in port development, it is "not fitting too well" with culture of the company. Earlier, the shipping line had signed a memorandum of understanding (MoU) to develop two minor ports, Maroli Port and Vansi-Borsi Port, under Gujarat Maritime Board (GMB) with an estimated cost of Rs 6,000 crore and Rs 300 crore respectively.

Mittal said the company has decided to focus more on shipping segment which would give more opportunity and better returns rather than working on projects with long payback period. However, the company has not earmarked any amount for GMB ports, he said.

"We are exploring the possibilities in other shipping segments, including those in chemicals transportation and offshore in addition to existing tankers and bulk segment," he said.

Asked about vessel acquisition plans, Mittal said Mercator would take delivery of second-hand bulk carrier on 20 September for $ 35 million.

To a query, he said the company has transferred nine geared Panamax vessels of total 644,069 dead weight tonne (DWT) carrying capacity to its subsidiary Mercator Lines (Panama) Inc as the government has not yet finalised chartering guidelines.

Earlier, the company had signed a memorandum of agreement for rights of operating these vessels on charter with an option of purchase in future.