Sagarmala project to up DCI revenue

The ambitious Sagarmala project announced by the Prime Minister, which aims at developing several ports along the Indian coastline, will boost the revenues of Dredging Corporation of India Ltd (DCI), said a top company official in Ahmedabad on Tuesday.

The state-owned DCI is the largest dredging company in the country, with a 93 per cent share in the country's dredging business. It is also the seventh largest dredging company in the world.

"DCI will earn an additional revenue of at least Rs 500 crore every year once the Sagarmala project kicks off," company sources said. The sources added that the mega project, in which Rs 1 lakh crore is to be spent over ten years, will have an investment of at least Rs 10,000 crore per year in new port projects.

"Even if dredging activities are considered to be five per cent of the cost, there will be an additional revenue of over Rs 500 crore every year," the sources said.

Dredging, which involves widening and deepening the channel so that larger vessels can berth at ports, has basically four components, with capital dredging and maintenance dredging being the two main parts apart from land reclamation and beach nourishment.

Interestingly, maintenance dredging - deepening the already existing channels - constitutes for over 90 per cent of DCI's revenues. Maintenance dredging provides 96 per cent of the income.

"With the government issuing a notification that all dredging orders by PSUs and private players must be through the tendering process," said a company source, adding that this will give DCI even more opportunities in the Indian market. Also, the board of directors has now been given more autonomy, the sources said.

The Kolkata Port Trust, Vizag Port Trust, Jawaharlal Nehru Port Trust, Kandla Port Trust and Paradip Port Trust continue to be the major clients of DCI. "KoPT contributes to over 50 per cent of our income from operations and we have the dredging contract until 2007 for this port. Apart from KoPT, Kandla Port too requires regular dredging, while others require periodic dredging" , officials said.

The operating income of the company rose from Rs 384.4 crore in 2000-01 to Rs 489 crore in 2001-02. During the last fiscal, the operating income rose to Rs 492.8 crore. "In the nine months of the current fiscal, the operating income stood at Rs 367.2 crore," sources said. Established in 1976, DCI has been receiving the mini Ratna PSU award for the past eight consecutive years.