Alcock Ashdown sale deferred again, low bids to blame this time

Alcock Ashdown sale deferred again, low bids to blame this time
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First Published: Fri, Sep 07 2007. 12 53 AM IST
Updated: Fri, Sep 07 2007. 12 53 AM IST
Mumbai: The Gujarat government has abandoned plans to sell shipbuilding firm Alcock Ashdown (Gujarat) Ltd after bidders quoted prices that were below the reserve price set by the government.
“The price bids received from the two bidders were below the reserve price fixed by the government. So, we decided not to accept the bids,” said Arvind Agrawal, commissioner, Bureau of Public Enterprises, Gujarat government.
He declined to disclose the reserve price set by the government or the price quoted by the two bidders. India’s biggest private sector shipbuilder, ABG Shipyard Ltd, and the country’s largest gearbox manufacturer, Elecon Engineering Co. Ltd, had independently submitted price bids to acquire the state-owned shipbuilder which has two shipbuilding and ship repair facilities in Gujarat, one each in Bhavnagar and Chanch.
The state government had planned to privatize Alcock Ashdown at a time when there is a boom in the global shipbuilding industry. Global shipowners are building more ships at Indian yards as builders in maritime strongholds such as South Korea, Japan and China are not accepting orders for building relatively smaller ships.
As a result, Indian shipbuilders such as ABG, Bharati Shipyard Ltd, Cochin Shipyard Ltd, Tebma Shipyards Ltd, Larsen & Toubro (L&T) and Pipavav Shipyard Ltd are looking to grab a higher share of the global shipbuilding market and capture the market vacated by the closure of yards in Europe and other developed countries.
India’s share in global shipbuilding is expected to rise to around 15% or $22 billion (Rs90,200 crore) by 2020 from the current 0.4% now, says a report prepared by Mumbai-based consultancy firm i-maritime Consultancy Pvt. Ltd.
Local shipbuilders such as ABG, Bharati and L&T are expanding capacities to meet the growing demand for building new ships to carry cargo and replace those that are scrapped globally as per the rules framed by the global shipping regulator, the International Maritime Organization (IMO).
“With the shipbuilding industry in a boom both in India and abroad, we will try to sell Alcock Ashdown again at an opportune time,” Agrawal said.
This was the second attempt by the state government to sell the yard. Last year, the government had called off a competitive bidding process to re-evaluate the company’s value in a changed global scenario.
Alcock Ashdown, which caters to the lower and middle segment needs of fleet owners, designs and builds sea-going grade steel vessels for various purposes as well as inland and coastal ships and boats in steel or fibre-reinforced plastic (FRP). The firm’s Chanch yard has the largest dry dock on India’s northwestern coast with direct access to the sea.
A dry dock is a narrow basin or vessel that can be flooded to allow a load to be floated in and then drained to allow that load to come to rest on a dry platform. Dry docks are used for the construction, maintenance and repair of ships, boats and other watercraft.
The proximity to the Mumbai High oilfields and the international Gulf-bound shipping routes makes Alcock Ashdown’s shipyards ideal for offshore support, fabrication, ship repair or construction.
The oufit jetty of the yard has a depth of 4.5 metres and can build multipurpose cargo and passenger ships of capacities up to 20,000 tonnes, platform supply vessels, defence production ships, tugs and barges. Alcock Ashdown was originally owned by a British firm. When the firm ran into financial trouble, it was taken over by the Indian government in 1975. Subsequently, in 1994, the yard was acquired by the Gujarat government.
The firm is currently building 30 vessels costing Rs1,200 crore including eight tankers, each with a capacity of 12,800 tonnes, valued at Rs850 crore for Sea Tanker Management Co. Ltd, which is based in Norway and Cyprus.
“The yard has very good business potential,” said an official at Elecon Engineering.
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First Published: Fri, Sep 07 2007. 12 53 AM IST