Shipping Corporation of India Ltd (SCI) has invited bids from domestic shipbuilders to construct two firm and two optional dual-fuel ready medium range (MR) product tankers, in a project that could cost more than $200 million. The tender, floated on Monday, marks a significant step in the government’s long-awaited strategy to revive and scale up India’s shipbuilding industry through assured order support from state-run companies.
The move follows the Cabinet’s approval in September of a ₹69,725 crore package aimed at strengthening domestic shipbuilding. Market sources estimate that building an MR product tanker from scratch currently costs between $50 million and $60 million.
This will be the first time in decades that an oil tanker is built in India, underscoring the government’s ambition to position the country among the world’s top 10 shipbuilding nations by 2030 and within the top five by 2047. At present, India accounts for just 0.07 per cent of global shipbuilding and less than 1 per cent of global shipping tonnage.
The MR tankers will be acquired by a joint venture between SCI and state-owned oil refiners, including Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). The vessels are intended primarily to serve the logistics needs of state-owned oil marketing companies.
By encouraging public sector entities to place shipbuilding orders with local yards, India is following a model successfully adopted by China. China’s Cosco Shipping, the country’s largest shipowner, recently placed orders for 87 vessels worth $7.07 billion at shipyards owned by China State Shipbuilding Corp (CSSC).
According to the tender, price, quality and timely delivery will be the key evaluation criteria. Shipyards capable of delivering the MR tankers ahead of schedule will receive additional weightage during the commercial evaluation.
Prospective bidders are required to submit a ‘Shipyard Qualification Template’ along with their bids, detailing infrastructure availability and execution capability. Shipyards lacking prior experience in building MR product carriers must demonstrate a technical tie-up or collaboration with a reputed global shipyard or international design company. Such partners must have delivered or designed at least three MR-sized product or chemical tankers, or larger crude, product or gas carriers, within the past five years that are currently in service.
The collaboration must include comprehensive basic and detailed design support throughout the project until vessel delivery. Additionally, the international shipyard or designer must have experience in delivering or designing dual-fuel ready vessels capable of operating on LNG or methanol.
Eligibility criteria also require Indian shipyards to have a positive net worth in the immediately preceding financial year. Shipyards failing to meet this condition may submit a ‘Letter of Comfort’ from scheduled banks or reputed financial institutions, indicating willingness to provide financial support covering at least 60 per cent of the contract value.
The MR tankers must be constructed entirely at the successful bidder’s own shipyard, with complete outsourcing or subcontracting of shipbuilding work expressly prohibited.
Meanwhile, the projected ship requirement of state-owned oil marketing companies over the next 15 years has been significantly revised downward to 59 vessels from an earlier estimate of 112, which had included 30 MR tankers, 24 very large gas carriers and four offshore vessels valued at around ₹85,400 crore.
Under the revised plan, the requirement comprises two MR tankers, five very large crude carriers (VLCCs), nine Suezmax tankers, four Aframax carriers, two very large ethane carriers, eight very large gas carriers, four LNG carriers, 11 platform supply vessels, 10 anchor handling, towage and supply vessels, and four offshore supply vessels.
The SCI-led joint venture, in which Shipping Corporation of India will hold a 50 per cent stake, plans to acquire around 59 vessels through a mix of second-hand purchases and newbuilds at Indian shipyards. The investment is expected to be as high as ₹15,000 crore over the next five years, according to a senior SCI official. (Source: ET Infra)
