Gujarat may get Rs 1100 cr shipyards

Kandla, Adanis plan ship building, repair facilities

Encouraged by the Centre's draft maritime policy which stresses on developing international shipyards in India through public-private partnership, two ship-building and ship-repairing facilities are now set to be developed in Gujarat.

Subsequent to the finalisation of a ship repair and building yard project by the Ahmedabad-based Adani Group, the Kandla Port Trust (KPT) has decided to construct a ship repair and building yard close to its port site in Kutch.

While the Adanis have lined up an investment of over Rs 800 crore for the facility to be developed at Mundra where it is also developing a special economic zone (SEZ), KPT will invest Rs 500 crore for the project for which an expression of interest (EoI) might be opened within a fortnight.

According to an official document of KPT lying with Business Standard, the project has been divided into two phases.

"During phase one, a ship repair yard conforming to international standards and a jetty for ships arriving for repairs will be provided at an estimated cost of Rs 120 crore. During the second phase, a ship-building yard and a jetty will be provided at an estimated cost of Rs 380 crore," the document said.

Though KPT had earlier decided to invite an EoI during last month, it has rescheduled to invite an EoI by the end of this month.

Talking to Business Standard on Tuesday, A Janardhana Rao said, "We expect to open the EoI for the ship-building and repairing project in the next 15 days and the project will be developed through public-private partnership."

He, however, denied to disclose any further information on the project for which an investment of Rs 500 crore has already been earmarked by the trust. KPT is also looking for equity partners for the yard.

According to a source close to KPT, "We are going to provide a huge site with excellent road network along with proper electrification of the entire area while other facilities like exclusive fire services along with uninterrupted water supply also will be there at the proposed yard. The yard will be able to handle as much as 20 large vessels at a time."

The project is expected to be ready in the next 36 months, while the Adani Group which is also coming with a major ship-building and repairing yard at Mundra targets to complete its project in the next 24-30 months.

"The project requires an investment of more than Rs 800 crore and we are at present working on both the options of meeting the cost through internal accruals or also partial funding through an equity partner. However, a decision of going for a joint-venture model has not been taken yet while the group will launch a special purpose vehicle for this ship-building and repairing project," said Sanjay Gupta, chief executive officer, Adani Group, on Tuesday.

Interestingly, the Adanis and KPT already have been competing with each other as both run ports in Kutch district and also have container terminals. The new plan by KPT and the Adanis to come up with the shipyard would once again put both the entities into another round of commercial competition.

"We are open for such healthy competitions and also competition will broaden the market size and the industry," Gupta said.

Interestingly, Gujarat houses world's largest ship-breaking yard at Alang in Bhavnagaar district which however, does not have any ship-building facility.

Alang produces three million metric tonne of metal scrap annually and broke nearly 4,200 vessels till date providing livelihood to over 40,000 people.