Cochin Shipyard Ltd is saddled with two 1,200-seater passenger cum 1,000-ton cargo vessels it has built for the Andaman and Nicobar Administration for some Rs819.22 crores under the government’s ‘Make in India’ programme after the Union Territory decided against taking delivery of the two ships, a fall out of the shifting travel choices of the island people for whom the ships were ordered.
“With regard to the shipbuilding contract for construction of 2 Nos 1,200 passenger ships with a customer, the contractual delivery date (as extended) for one ship is already expired and the second ship is nearing expiry,” Cochin Shipyard said while announcing the first quarter FY24 results on 11 August.
“At the request of the customer for reallocation of the vessel for other prospective buyers, the delivery of ship has been abated with minor progress. The company has provided for liquidated damages for the delay up to 29 April 2023 and 30 October 2023 in respect for the two ships. Since the Company has a valid contract with the customer, the Company has not recognized further liquidated damages in the financials beyond the dates mentioned above,” the shipbuilder controlled by the Ministry of Ports, Shipping, and Waterways added. The island people who were totally dependent on water transport to travel to the mainland and back, are now increasingly using air transport for their travel needs, saving the 2-3 days required for journey by ship one way, as cheaper air tickets aided by government schemes force a change in their travel patterns, an official familiar with the development said.
