Firms buy more dredgers to keep up with port deepening activity

Firms buy more dredgers to keep up with port deepening activity
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First Published: Thu, Jul 31 2008. 11 26 PM IST
Updated: Thu, Jul 31 2008. 11 26 PM IST
Bangalore: As demand rises sharply to maintain and deepen India’s ports and harbours, companies are buying and hiring dredgers to service a market estimated to be worth Rs20,000 crore, spurred by the government relaxing qualification norms at its 12 major ports.
“We are liberalizing the qualification criteria for dredging firms by formulating competition-friendly guidelines for undertaking dredging works at major ports,” said shipping secretary A.P.V.N. Sarma. “The new policy will be announced shortly.”
Under the new policy, firms lacking requisite experience but having the technology and equipment will be eligible to participate in the tendering process, he said. The 12 major ports plan to spend nearly Rs7,000 crore over the next 3-5 years to deepen their channels.
Infra Dredge Services Pvt. Ltd, a new firm set up by A.P. Srivastava, a former executive at Dutch dredging firm Van Oord Dredging and Marine Contracting Co. NV, has bought a dredger from Hong Kong and hired three more from overseas for five years.
The dredgers are expected to arrive in India by the end of September and the firm is in talks with potential clients to deploy these, Srivastava said.
The more established International Seaport Dredging Pvt. Ltd, 61% owned by India’s biggest engineering and construction firm Larsen and Toubro Ltd, is building two dredgers at yards in Singapore and Malaysia. Dredging International NV, the operating company of DEME Group, a Belgian dredging and hydraulic engineering contractor, holds the remaining 39% stake.
The new dredgers will be ready by April next year, said deputy chief operating officer G.Y.V. Victor. The firm is also scouting the market to buy another dredger, he added.
International Seaport Dredging already has one dredger engaged for the Sethusamudram ship channel project and another working at the under-construction Dhamra port in Orissa.
“There is a huge potential market for undertaking dredging works in India due to a shortage of dredgers worldwide,” said Infra Dredge’s Srivastava.
A spurt in port expansion globally as well as offshore construction and land reclamation in West Asia has led to a global shortage of these specially equipped ships and raised dredging costs significantly.
The cost of dredging to create new ports and harbours and deepen the channels and berths of existing ports, called capital dredging, has gone up 70-80% in the past five years, said Victor.
The cost of maintaining the depths at existing levels, called maintenance dredging, has risen by 22-65%, he added.
Indian ports accumulate silt quickly and require maintenance dredging throughout the year to allow ships to come in. Currently, dredging costs Rs120-240 every cubic metre depending on the location, the type of material to be dredged and the distance from the dredging site to the dumping area, according to an official at state-run Dredging Corp. of India Ltd.
Many new players have recently entered the dredging business attracted by the huge potential. These include Sical Logistics Ltd, Mercator Lines Ltd, Essar Shipping Ports and Logistics Ltd, Marg Ltd, Navayuga Group and Adani Group.
State-run Shipping Corp. of India Ltd, Hindustan Infrastructure Projects and Engineering Pvt. Ltd and Gujarat Maritime Board have also announced their intentions to enter the sector, which was so far dominated by Dredging Corp., Dharti Dredging and Infrastructure Ltd and Jaisu Shipping Co. Pvt. Ltd.
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First Published: Thu, Jul 31 2008. 11 26 PM IST