State-owned Shipping Corporation of India (SCI) remains cautious on ordering new vessels amid the continuing slump in business, and has earmarked only around Rs 700 crore in investments for the next fiscal.
"For FY17, we are looking at something like Rs 500-700 crore. This would go into various things; it also depends on when the LNG project comes up. Part of it would be for LNG, part of it for offshore," SCI Chairman and Managing Director BB Sinha told PTI.
The LNG project is the $1.2-billion order from state-owned GAIL for chartering nine LNG vessels.
There is a proposal to build three high-value ships within the country and SCI has the right to take up to 26% interest in each of the ships.
GAIL has extended the tender to charter the ship by a month to March 31, he said.
Sinha, who took over as the chief of the company recently, said SCI is cautious when it comes to placing vessel orders and has no vessels on order at present.
Only the tankers and oil and gas segments are doing well at present, he said.
Between the 2008 global financial crisis and the 2013-14 fiscal, the shipping industry globally was in troubled waters and SCI was not immune to the supply glut issues which led to a massive fall in tariffs on one hand lower tonnage on the other.
Some of SCI's previously ordered ships also got delivered during this time, resulting in losses for three consecutive fiscals till 2013-14.
In 2014-15, it came back to the black registering a profit of Rs 200 crore and has posted a net profit of Rs 384 crore in the three quarters in the current fiscal.
Union shipping and ports minister Nitin Gadkari had recently said SCI would post a net profit of Rs 450 crore in the fiscal.
Sinha said there were at least a dozen ships which were ordered but the contractors did not deliver on time.
SCI recovered nearly Rs 360 crore paid to such contractors over the past two years, he said.
When asked about its joint venture with the national shipping company of Iran and if we can see some revival after the sanctions were lifted, he replied in the negative.
He explained that troubles around the sanctions continue to remain and there are only four ageing ships which the JV holds, including three bulk carriers and an oil tanker.
"We want to exit. Lot of time has already passed," the chairman said.
