Cochin Shipyard to set up Rs 490 cr repair facility

Cochin Shipyard Limited (CSL) and Cochin Port Trust (CPT) have entered into an agreement for setting up an international ship repair facility at Willingdon Island, near here.

According to the agreement, 42 acre owned by the Cochin port will be leased out to CSL for a period of 30 years. The agreement was signed by CPT chairman Paul Antony and K Subramaniam, chairman and managing director of CSL, in the presence minister of state for communication Milind Deora on Monday. The letter of award for the project had been formally handed over to chief minister Oommen Chandy by minister of shipping GK Vasan during the ‘Emerging Kerala’ event held in September.

 

In addition to leasing out the land, 243 employees who are currently working in the dry dock and workshop of the port will be deputed to CSL. CPT will also hand over its existing graving dry dock, associated workshop facilities and 15.60 hectare (39 acre) adjoining the water area for setting up the repair facility, a CPT press release said.

The port will receive an upfront payment of Rs 88 crore for the land and as the value of the other facilities. CSL is planning to put up a modern ship lift system in the above facility at an estimated cost of Rs 490 crore. The repair facility will be mainly for small and medium ships, up to 130 metre in size. The facility will be commissioned in 2017 and the projected revenue from this is Rs 980 crore by 2043.

The land, with an 800-metre waterfront, already has a small repair facility and is close to the Mattancherry Wharf of the Cochin port. The port trust wanted to go for a global tender to lease out the land for setting up the repair facility. However, the shipping ministry, which administers both the port and the shipyard, has decided that the ship repair yard would be set up by CSL.

For CSL, this will be a part of its expansion plan costing close to Rs 1,500 crore. The Kochi-based public sector undertaking is likely to go in for an initial public offer (IPO) to part-fund the expansion. With the commissioning of the Vallarpadam container terminal and new projects such as the LNG terminal and expansion at the BPCL-Kochi refinery, the port will see increased traffic and demand for a ship repair facility.

CSL has also identified two projects – a new larger dry dock in the existing premises for taking up underwater repair of rigs and semi-submersibles and a facility to take up fabrication of offshore structures.

The growth of CSL over the past few years has been impressive. The total income of the company has grown from Rs 453 crore in 2005-06 to Rs 1,480 crore in 2011-12. Net profit has correspondingly grown from Rs 18 crore to Rs 172 crore.

The ship repair project is one of the three identified public-private partnership projects for CPT by the ministry of shipping to be awarded during 2012-13. The other two projects are multi-user liquid terminal project at Puthuvype and the general cargo terminal Q8-Q9 at Ernakulam Wharf of the port.