Cochin Shipyard Ltd (CSL) and Cochin Port Trust (CoPT) have entered into a contract under which 42 acres of land will be leased out by CoPT to CSL for setting up an international ship repair facility at Willingdon Island, according to Exim News Service.
The agreement was inked and the documents exchanged by Mr Paul Antony, Chairman of CoPT, and Cmde K. Subramaniam, Chairman and Managing Director of Cochin Shipyard, at a function presided over by Mr Milind Deora, Minister of State for Communication, Information Technology and Shipping, here earlier this week.
The ship repair facility project is one of the three identified public-private partnership (PPP) projects for CoPT by the Ministry of Shipping, to be awarded in 2012-13. The other two projects are the Multi User Liquid Terminal at Puthuvypeen and the General Cargo Terminal Q8-Q9 at Ernakulam Wharf.
As per this agreement with CSL, CoPT will get the upfront premium, the value of the assets handed over, the guaranteed revenue quoted by CSL every year for the 30-year period, and the lease rental for the land and water area allotted at the TAMP-notified rates from time to time. In addition, 243 employees currently working in the Dry Dock and Workshop area will be deputed to CSL.
CoPT had issued a tender in June 2012 to set up an international ship repair facility on approximately 42 acres of its land. Cochin Shipyard bid successfully for the project.
As per the terms of the tender, the following facilities of CoPT would be leased out for a period of 30 years:
¡ª16.90 hectares (42 acres) of land area with 850 metres of waterfront including:
* The existing Graving Dry Dock of size 66 m x 12.5 m and associated workshop facilities
* 15.60 hectares (39 acres) adjoining water area for setting up shiplift and allied facilities
CoPT will receive the upfront payment of Rs 75 crore and the value of the assets handed over, Rs 12.92 crore, immediately on execution of the agreement.
CSL plans to develop a modern shiplift system at the facility at an estimated total cost of Rs 490 crore over a four-year period. This is besides the upfront premium, value of assets, annual guaranteed amount, annual lease rental for land and water area payable to CoPT. CSL will be using the facility to repair small ships up to 130 m in size so that its existing repair facility can be dedicated to the value-added repairs of larger ships. The projected revenue from the new facility for CSL is expected to be around Rs 980 crore by the end of the 30-year period (2043).
This is seen as a landmark investment for CSL, being its first major investment in a ship repair facility.
In addition, CSL has identified two more projects for taking up in the short to medium term:
(a) A new larger dry dock in the existing CSL premises for carrying out underwater repairs to rigs and semi-submersibles
(b) Fabrication of offshore structures
The growth of CSL over the last few years has been impressive, with total income surging from Rs 453 crore in 2005-06 to Rs 1,480 crore in 2011-12. The net profit has correspondingly increased from Rs 18 crore to Rs 172 crore. In order to sustain the growth momentum, the yard has been looking to expand its operations. A business plan and visioning exercise was undertaken with the help of Ernst & Young to identify potential areas for expansion and growth. One of the areas identified was ship repair, in which Cochin Shipyard¡¯s expertise is well known. |
