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DCI attracts a single bid for three dredgers

DCI attracts a single bid for three dredgers

Mumbai/Bangalore: An acute global shortage of specialist dredger builders has nearly nixed the plans of India’s biggest dredging firm to buy more such ships. State-run Dredging Corp. of India Ltd (DCI) has attracted only one bid for a tender it floated last year to buy three trailer suction hopper dredgers of 5,000 cubic metres (cu.m) capacity each.

Besides, the bidder, IHC Holland Merwede BV (IHC), the world’s top dredging equipment maker by sales, has quoted more than €80 million (around Rs548 crore) for each dredger, while DCI had budgeted Rs1,050 crore for the three ships, a person familiar with the bidding said.

A dredger of this type should not cost more than €60 million, he added, speaking on condition of anonymity as he’s not authorized to give details on the bid. Mint could not independently verify his claim.

DCI has a fleet of 12 dredgers with a capacity to dredge 80 million cu. m a year. The firm is looking to boost its dredging capacity to 100 million cu. m a year, as all Indian ports have to deepen their channels to allow bigger ships.

DCI had 91% capacity utilization in 2007-08.

“IHC has quoted a high price for the dredgers," said an official at the shipping ministry, without confirming the price. “DCI has been negotiating with IHC to reduce the price, but it has not yielded any results so far. Attempts are going on to get the prices reduced." He also didn’t want to be named.

Mint could not reach Biswajit Basu, general manager of IHC Holland’s India office. His office said Basu was travelling abroad and would not return until next week. A DCI spokesman declined to comment.

A trailer suction hopper dredger digs sand and silt from the ocean bed, collects the dredged material, and takes it to the deep sea or shore for dumping.

In 2007, DCI had to scrap a tender to buy three similar dredgers from IHC, then too the lone qualified bidder, because of delays in getting approval for the high price quoted by the Dutch firm.

By the time the Union government’s cabinet committee on economic affairs (CCEA) cleared the purchase plan, the validity of the price quoted by IHC had lapsed. The Dutch firm had declined to extend the validity date.

Unlike its smaller private rivals, state-owned DCI cannot negotiate and buy dredgers; it can make purchases only through tenders.

“In the latest tender, DCI tried its best to rope in as many players as possible by relaxing several conditions. But still it didn’t click," the ministry official briefed on the matter said.

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