Shipping Corp bags IOC crude transport bid

The Shipping Corporation of India (SCI) has emerged as the successful bidder for transportation of 9 million tonne crude oil for Indian Oil Corporation (IOC).

The two companies were negotiating the rates after SCI quoted 12 points above the Baltic Index for TD 3 route though IOC wanted the rate to be about 5 points below the index.

Company sources said, SCI emerged as the lowest bidder in the race in which there were two other participants "" GE Shipping and Mercator Lines.

IOC wants to transport 9 mt crude oil from the Persian Gulf to the Indian coast for a year starting July 2005. It had specified that it needed only very large crude carriers (VLCCs) which only these three companies own.

"SCI took delivery of a VLCC earlier this year and it was likely to receive another such vessel in August-end," said an IOC executive, adding that the tender was limited to only Indian companies.

At present, four Indian shipping companies own VLCCs. SCI, Essar Shipping and Mercator Lines acquired one VLCC each last year while GE Shipping owns two, one of which was acquired in 2003-04 and other during the 2004-05.

IOC was recently granted the freedom to make its own shipping arrangements instead of going through Transchart, the shipping ministry's chartering wing but the company was bound by the Directorate General of Shipping guidelines under which it would need to give preference to Indian vessels in any kind of competitive bidding.

Shipping ministry officials said IOC was given permission on the condition that imports would be on free-on-board basis. This means that IOC cannot ask the exporter to make shipping arrangements.

In case of a global tender, IOC is required to give a chance to the most competitive Indian bidder to match the price quoted by a foreign company quotes the lowest price.