Shipping Corporation of India Told to Buy New Ships
- Business & Finance
Shipping Corporation of India (SCI) should purchase new fuel efficient vessels to replace the old ones, the company was told by India’s standing parliamentary committee on transport.
The recommendation comes in the aftermath of Shipping Corporation of India’s recovery from its loss making phase since 2011-12, bouncing back to a net profit of Rs.384.41 crore during 2015-16.
Since posting losses for three consecutive fiscal years, from 2011 to 2014, SCI abstained from ordering new tonnage and has not acquired any vessel during 2015-16, and the company has no vessels on order, the committee said.
SCI had registered losses at a time where the shipping industry was struggling to come out of its unprecedented long recession and the outlook for shipping industry was progressively deteriorating. In order to make up for the sustained losses and to turn itself around, cost reduction measures were undertaken, including fleet reduction steps in the company’s liner vessels, dry bulk carriers, tanker and passenger vessels.
Future plans include focus on coastal & near-coastal trade, expansion of break-bulk & project cargo business, optimization of equipment inventory, along with reduction in Opex costs through various initiatives, the committee added.
“The committee understands that some of the ships owned by the SCI are aged and needed to be phased out. The committee recommends that if the international market situations are viable, they may go for purchasing new fuel efficient vessels in place of the old ones,” the committee said in a report.
SCI owns a fleet of 69 vessels of 5.893 million DWT tonnes with a share of more than one third (in DWT) of the total Indian tonnage. SCI’s owned fleet includes bulk carriers, crude oil tankers, product tankers, container vessels, RORO vessels, LPG/ammonia carriers and offshore supply vessels.
World Maritime News Staff