With Dredging Corporation of India Ltd (DCI) facing fund crunch, the government is looking at multiple options for financing India’s first locally-built high-end and larger dredger, including asking State-run Cochin Shipyard Ltd to extend equity support to the vessel it will construct for the dredging firm.
Mumbai-listed Cochin Shipyard and DCI signed a Memorandum of Understanding (MoU) recently for constructing either a 8,000 or a 12,000 cubic metre hopper capacity trailing suction hopper dredger (TSHD) estimated to cost ₹800 crore. TSHDs are used to maintain the channel of ports.
Cochin Shipyard and IHC Holland BV have signed a separate MoU for collaborating on technology and design for high capacity, complex dredgers.
Pooling resources
The Ministry of Ports, Shipping and Waterways, which brokered the deal to build dredgers locally as part of the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives, has suggested pooling of resources by different entities to finance the construction.
These include Cochin Shipyard chipping in with 20 per cent of the equity component of the dredger cost with the balance equity funded by the four major ports – Visakhapatnam Port Trust, Paradip Port Trust, Deendayal Port Trust and Jawaharlal Nehru Port Trust – who are shareholders of DCI.
DCI could also explore overseas soft loan particularly from institutions based in the Netherlands as major equipment/parts for constructing the dredger will be supplied by IHC Holland, the world’s largest dredger builder.
“Cochin Shipyard has said it is willing to look at picking equity stake in the dredger construction project to facilitate the ‘Make in India’ policy,” said a government official briefed on the plan.
The yard is also agreeable to receiving the construction cost of the dredger staggered over a longer time span along with some interest to help the cause of Make in India, he added.
DCI and Cochin Shipyard are discussing the specification of the dredger. After the finalisation of the dredger specification, the yard plans to submit the construction cost basis which the funding arrangement will be tied up.
