Bangalore: Indian shipping firm Varun Shipping Co. Ltd has asked the maritime regulator to clarify its rules on allowing foreign ships to operate along India’s coast.
The appeal comes after one of Varun’s India-registered ships was denied the right to match the lowest rate quoted by a foreign ship in a recent auction by Gujarat State Petroleum Corp. Ltd (GSPC).
Coastal trade: A vessel of Varun Shipping. The shipper’s bid was rejected by Gujarat State Petroleum Corp. without giving any reason.
In a public tender, Indian ships have the right of first refusal if they can match the lowest rate quoted by foreign ships, according to rules framed in 2002 by the director general of shipping to develop the local shipping industry.
India’s coastal trade is reserved for Indian ships. Foreign ships can be hired only when Indian ships are not available, and with the regulator’s approval.
GSPC, in the first round of bidding for hiring a tug-cum-supply vessel on a two-year contract to support its offshore oil drilling operations, had asked Varun to match the lowest rate quoted by a foreign ship.
Varun matched the rate, but the state-run firm later scrapped its bid without giving a reason.
In the second round of bidding for the same contract, another Indian firm, Great Offshore Ltd, offered the lowest day rate on a Cayman Islands-registered anchor-handling tug owned by its subsidiary Great Offshore (International) Ltd.
“But Varun was not given the right of first refusal by GSPC to match the lowest rate quoted by the foreign ship of Great Offshore, though it was the only company offering an Indian ship for the contract,” a person familiar with the matter said on condition of anonymity. The contract was awarded to Great Offshore’s foreign-registered ship.
Existing guidelines say that a foreign-registered ship offered by an Indian bidder would be treated as a foreign vessel for the purpose of bid evaluation.
GSPC could not be reached for comment, and a spokesperson for Varun declined to comment.
“The matter has been brought to our notice and we are looking into it,” said an official at the regulator. He did not want to be named.