With shipping majors including MSC – one of the largest players globally – expressing interest to explore shipbuilding and ship-breaking activities in India, the Ministry of Ports, Shipping and Waterways has decided to speed-up on a $ 2 – 3 billion (roughly Rs 16,000 crore) policy push aimed at modernising, ramping-up and if necessary, setting up of ship-building yards. Funding details are being worked out.
In maritime parlance, shipbuilding yards are facilities where new ships are constructed. They have large dry docks and basins for assembling the hulls, and workshops for building and installing ship components. Shipyard modernisation is the third part of the strategy, beyond Maritime Development Fund and SBFAP 2.0.
The Mediterranean Shipping Company (MSC) has already been in preliminary talks for setting up a greenfield shipbuilding and repair yard and is reportedly exploring partnerships. Mostly it is exploring locations in Gujarat, Ministry sources said.
China – one of the major shipbuilders – is already “booked to capacity” at least for “a few more years”; but there is a strong demand for ships against which there is short supply or availability.
Actual financial implication for the Centre “could be around 50 per cent” (around ₹8,000 crore) with the remaining capex requirements being borne by financial institutions, multilateral agencies, soft-loan arrangements and so on.
The policy will look to push for capacity expansion, tech upgrade and skilling of workforce at shipbuilding yards, and promote setting up of shipping clusters in select coastal States – Andhra Pradesh and Odisha – among others. Shipbuilding clusters, which found a mention in the Budget, will be facilitated to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.
Recently, Shipping Ministry officials visited Asian nations – South Korea and Japan – to bring in investments for shipbuilding. Players from both countries visited India to explore shipbuilding yard arrangements and the prospect of investing. Some of them are expected to visit India again in the next 30-odd days.
Beyond land, which is a State subject, the Ministry is looking to incentivise or help push for additional capex for providing for breakwaters, and so on. In shipping parlance, a ‘breakwater’ refers to man-made structures built off-shore to protect harbours, anchorages and coastline from sea water level surge (tides, etc). It also allows ships to safely manoeuvre and dock.
Already, a Maritime Development Fund – with a Rs 25,000-crore corpus – has been announced, while phase-II of the Shipbuilding Financial Assistance Policy (SBFA 2.0) with a Rs 18,000-crore outlay, is awaiting Cabinet nod. Both were mentioned in the Budget.
