New policy ends monopoly of Dredging Corporation

The recent announcement by the central government on the new national dredging policy has come as a major blow to Dredging Corporation of India(DCI), exposing it to competition from both domestic and foreign counterparts.

The state-owned corporation, which has been enjoying monopoly in maintenance dredging in the country for the last several years, now suddenly finds itself having to compete for maintenance dredging contracts.

It may be noted that the central government, in its recently announced national dredging policy, directed all the major ports in the country, except Kolkata port, to award the maintenance dredging works to dredging companies including DCI only through a competitive bidding process.

The government also directed DCI in particular to compete with other private domestic and foreign dredging players to bag maintenance dredging works even from the government-controlled major ports.

With this new announcement, DCI's monopoly in getting the maintenance dredging works from major ports will come to an end. According to the new dredging policy, the major ports in the country henceforth have the freedom to invite tenders for allotting maintenance dredging works instead of nominating DCI.

At present, DCI has been enjoying monopoly in maintenance dredging works in the country. During the last fiscal, DCI executed 812.18 lakh cubic meters of dredging works in the country.

The annual maintenance dredging requirement of all the major ports in the country is around 650 lakh cubic meters, and the entire maintenance dredging works have been awarded to DCI only on nomination basis.

"At present, major ports in the country have been spending around Rs 450-500 crore a year on maintenance dredging. If the government allows bidding, it will benefit the ports due to the competition among the dredging companies," said Visakhapatnam port sources .

DCI's chairman and managing director Neerav Kumar Gupta, however, is unfazed by the new policy.

"We can't avoid the global competition in the dredging sector in the present liberalisation and globalisation scenario. What we can only do is to improve our performance, quality and competitiveness. We are ready to face the challenges," he said.

"DCI is already competing with foreign dredging majors in capital dredging works. And it is a fact that 90 per cent of our total business has been coming from maintenance dredging. We have already reduced the rates substantially for maintenance dredging works. We have some inherent strengths to cope with domestic and foreign dredging companies. We are confident that the competition would only lead us further," Gupta said.