The global supply chain industry has begun to recover from Covid-induced headwinds, but the economic growth uncertainty produced by Russia’s invasion of Ukraine and subsequent worldwide sanctions has taken a bite out of investment expectations.
The destiny of the Shipping Corporation of India (SCI), whose protracted privatisation project is once again in jeopardy, is one such casualty of the approaching storm.
In the most recent federal budget statement, Indian authorities stated that the strategic sale will be completed in fiscal year 2022-23. When the first round of bidding completed, the shortlist was reduced from six to three applicants who had responded to the tender. Safesea Group of the United States, a consortium of Foresight Group International of the United Kingdom, and Megha Engineering & Infrastructure of Hyderabad are among the interested parties.
SCI’s board of directors opted in August to spin off the carrier’s non-core assets into a new business to sweeten the deal, but the spin-off procedure has yet to be completed. Officials from the Ministry of Shipping were once again urged to move quickly on the demerger proposal during a review meeting held on February 24.
“The process of demergering the Shipping Corporation’s core and non-core assets is underway,” a government official said last month, “after which financial bids would be requested for their strategic sale.”
SCI has been navigating a turbulent shipping market for some time, with tight balance sheets and a diminished fleet – currently 59 vessels with a total carrying capacity of 5.4 million deadweight tonnes, principally tankers and bulk carriers. The carrier has also relinquished all its long-haul consortium deals with foreign counterparts, confining itself to some short-sea services on the container front.
