Shipping Corp's dredging venture fails to take off

The year-old plan of the country’s largest sea carrier to get into the dredging business has failed to take off.

Shipping Corporation of India (SCI) had planned to form a mega dredging company with the Bombay Port Trust, Jawaharlal Nehru Port Trust, Kolkata Port Trust and Mumbai-based ship yard Mazagaon Dock, with an investment totalling Rs 6,000 crore. SCI Chairman and Managing Director S Hazara said, “The dredging business has not taken off at all because there are too many parties involved.”

Dredging Corportion of India (DCI), the lone domestic company invovled in dredging is not capable of meeting more than 10 per cent of demand. Seeing the absence of Indian companies, foreign players from Denmark and Belgium have formed a cartel, raising the dredging charges in the country.

SCI, from which DCI was carved out, is now trying to get back into the business.

There are 12 major ports and 187 minor ports in the country, which are in an expansion mode. The country’s coastline is about 7,517 km and dredging is required to manage the appropriate depth along the sea route.

“The demand for dredging continues and there is no reason why SCI should not grab this opportunity,” said Jehangir Adi Master, an equity analyst with Mumbai-based brokerage Pranav Securities. “It is the bureaucratic hurdles that drag on the company’s performance,” said another industry analyst who did not want to be named.

SCI has also been struggling with more such JVs that it has planned with other public sector undertakings. Its plan to get into a joint venture with Oil and Natural Gas Corporation (ONGC) to build rigs has not seen light of the day since the announcement was made six months ago.

The government-owned sea carrier is trying to diversify its revenue stream by getting into businesses such as ship building, dredging, port infrastructure etc.