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Cochin Shipyard signs agreement with Andaman and Nicobar Administration

Capital Market 

To commence operations at Marine Dockyard at Port Blair

Cochin Shipyard has entered into an Agreement with the Andaman and Nicobar Administration to commence its operations at Marine Dockyard, at Port Blair, a facility that is currently being operated directly by the A&N Administration.

Under the ambit of this Agreement signed on 28 November 2019, CSL shall assist the Administration to set up a Ship repair ecosystem at A&N islands, shall associate in Augmentation and Modernisation of the facility and shall also focus efforts towards Skill Development in the Islands in consultation with the Administration and Technical Institutions located in the Islands.

CSL will be entitled to a management fee of Rs 15 crore per annum. A profit share of 7.5% of PAT shall be payable by CSL to the Administration for profit generated by CSL through providing Ship Repair Services at the Marine Dockyard facility. CSL shall assist the Administration in the preparation of DPR for Augmentation and Modernisation of the facility for which the Company would charge 3% of the project cost (as per approved DPR). CSL has also offered to provide procurement services on a Cost plus Mark-Up basis, in case the Administration so desires.

The Agreement is for a period of 30 years, during which CSL is expected to spruce up the operational efficiency of the dockyard as well as improve the overall ship repair eco system in the island to ensure faster turnaround and minimise downtime of the vessels, which are the lifeline for the Islands CSL already has an existing MoU (since 2017) with A&N Administration for repair of large sea going vessels of A&N Administration at its facility in Kochi, which is being successfully executed, which has in turn led to the conclusion of this Agreement for long term association.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, November 30 2019. 17:12 IST