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Dredging Corp’s fleet expansion plan stuck on bid price expiry

Dredging Corp’s fleet expansion plan stuck on bid price expiry

The efforts of state-run Dredging Corp. of India Ltd (DCI) to acquire three new dredgers has run into rough weather with the sole qualified bidder refusing to extend the validity of its price bid.

In 2006, DCI called for bids and subsequently selected IHC Holland Merwede BV, the world’s top dredging equipment maker, to build the dredgers. The other bidder, ABG Shipyard Ltd, which had offered to build the dredgers at its under-construction facility at Dahej in Gujarat, failed to cross the pre-qualification criteria set by DCI.

However, it was only on 20 July that the government cleared DCI’s proposal regarding the purchase of the three trailer suction hopper dredgers of 5,000cu.m capacity each at a total cost of Rs1,087 crore. A trailer suction hopper dredger digs sand and silt from the seabed, collects the dredged materials and takes them to the deep sea or shore for dumping.

By the time the government cleared this proposal, however, the bid had expired;and DCI has been unable to get it extended.

“The validity of the price bid has not been extended by IHC Holland," said an official spokesman for DCI, explaining the reason for not yet placing the order with IHC.

“Our price bid was not valid when the Indian cabinet cleared the proposal," said Biswajit Basu, the general manager at IHC Holland’s India office in New Delhi on the sidelines of the International Maritime Exhibition at Mumbai last week. He refused to elaborate or answer any other questions on the issue. In 2006, IHC had quoted Rs1,087 crore for the three dredgers, an amount that experts had then said was higher than the prevailing market rates for building such vessels, especially by Chinese companies.

DCI now has no option but to rework its fleet expansion plan. The DCI spokesman said that the company was “yet to take a decision on inviting fresh bids for the dredger building contract".

The shipping ministry, meanwhile, has sounded out state-run shipbuilder, Mazagon Dock Ltd, on building at least one of the three dredgers at its yard in Mumbai. Mazagon Dock is currently building a cutter suction dredger for DCI under the supervision of Amsterdam-based Vosta LMG, an engineering and contracting company. The cutter suction dredger, the biggest such vessel to be built at an Indian yard, can cut rock and stones, and will be delivered inearly 2008.

DCI plans to buy new dredgers to boost its dredging capacity to 100 million cu.m a year. The firm currently has 12 dredgers in its fleet with a capacity to dredge 80 million cu. m a year.

A shortage of dredgers has affected dredging work at Indian ports and harbours.

India’s 12 major ports, owned by the Union government, have lined up investments worth Rs6,304 crore to deepen their channels and berths over the next five years in an effort to accommodate larger ships carrying more cargo to and from India as the economy expands.

Ports owned by the governments of several states have been given to private entities for development and operation; these require dredging to allow ships to call for loading and unloading cargo. This is estimated to cost about Rs15,000 crore over the next five-seven years.

DCI has also been entrusted by the Union government with the task of implementing the controversial Rs2,427 crore Sethusamudram ship channel project that involves dredging a ship channel across the Palk Straits between India and Sri Lanka.

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