South Korean shipbuilder STX Shipbuilding Co. Larsen & Toubro Ltd and Bharati Shipyard Ltd have filed expressions of interest to set up an international size shipyard on India’s west coast, said a person involved in the project. He did not want to be identified.
The Union government’s shipping ministry had invited expressions of interest for the development, construction, operation and management of an international size shipbuilding facility on the west coast of India. The facility would be built with a capacity to build and repair ships, initially of up to 1.75 lakh dead weight tonnes (dwt).
The proposed yard should be able to expand capacity to construct ships of up to 300,000dwt (the measure of the cargo carrying capacity) which may be container ships, liquefied natural gas carriers, very large crude carriers, Suezmax and Capesize carriers.
Mumbai port was appointed the nodal agency to process the tender on behalf of the ministry of shipping. The last date for submissions was4 July.
STX Shipbuilding has shipbuilding facilities in Busanand Jinhae.
The company, which is one of the largest shipbuilding firms globally, is also constructing a new shipbuilding complex at Dalian in China, where the labour costs are low, in a bid to boost shipbuilding capacity and achieve cost and production competitiveness.
The planned yard on the west coast of India will also have the capacity to repair and refit about 70-80 ships of different types in a year, said a shipping ministry official who didn’t want to be quoted.
The Union government plans to build two international size shipyards, one each on the east and west coast of India, with private investments to strengthen the shipbuilding infrastructure in the country. “The present shipbuilding facilities available in India are not commensurate with the growing demand, both global and local,” the official said.
Local builders such as L&T, Cochin Shipyard Ltd, ABG Shipyard Ltd, Bharati Shipyard and Tebma Shipyards Ltd are expanding capacities to grab a larger share of the global shipbuilding market and capture the space vacated by the closure of yards in Europe and other developed countries.
In a highly labour intensive shipbuilding industry, India’s strengths lie in its low-wage structure and abundant supply of highly qualified personnel.
The labour cost-per-worker in India is estimated at $1,192 per year when compared with $10,743 and $21,317 in South Korea and Singapore, respectively, says industry experts.
India also has lower fabrication costs—a key contributor to total cost in any shipbuilding activity, particularly for building larger ships.