Cochin Shipyard setting up dry dock, signs MoU with govt

Cochin Shipyard Limited (CSL) has signed a memorandum of understanding with the government of India for the financial year 2016-17, which will enable it to pursue two major expansion projects involving total investment of Rs2800 crore.

CSL is proceeding with two major expansion projects, including an international ship repair facility based on a 6,000 tonne ship lift and allied transfer facilities to be set up in 42 acres of land leased from Cochin Port Trust.

When commissioned, this facility will help the yard substantially increase its ship repair capacities and position Kochi as a major ship repair hub.

A new large dry dock of 310 x 75/60 m size will be constructed within CSL's premises in Kochi, which will provide the yard the capability to build large modern vessels like LNG vessels, large aircraft carriers etc in addition to undertaking repairs/ construction of jack up rigs, semi submersibles etc. Government approval has been accorded for both the projects.

The current MoU broadly consists of the performance evaluation parameters and targets for Cochin Shipyard for the ensuing year. The shipping ministry will review the MoU on a regular basis and the performance of PSU would be evaluated and ratings awarded at the end of the financial year.

The targets agreed in the MoU are in line with the aggressive growth plans of CSL in line with the ministry of shipping's ambitious plans and the Government of India's 'Make in India' policies.

CSL has reported excellent performance during the last financial year, despite very difficult market conditions. In the year ended 31 March 2016, CSL has posted a record turnover of Rs1,995 crore (provisional) surpassing the MoU target for the year. This is an increase of 7.3 per cent over the previous year. The provisional PBT and PAT figures are Rs424 crore and Rs275 crore, respectively, representing an increase of 15.4 per cent and 17 per cent, respectively, over the previous year.

In 2015-16, CSL has won new building contracts for building 5 vessels. The contracts for two 1,200 pax-cum 1000 tonne cargo vessels and two 500 pax-cum 150 tonne cargo vessels for the Andaman & Nicobar  Administration and one technology demonstration vessel for Defence Research & Development Organisation, totally worth about Rs1,675 crore.

The Cabinet Committee on Economic Affairs had, in April, given its approval for construction of a new dry dock within the existing premises of Cochin Shipyard Limited (CSL) to augment shipbuilding / repair capacity of the country.

The CSL project would not involve any financial outgo from the government on account of the construction of new dry dock as the expenditure of Rs1,799 crore will be funded through internal and extra budgetary resources (IEBR) of CSL and the funding requirements are fully tied up.

The project proposal would generate employment within the country. It may be noted that ship building and ship repair is a labour intensive industry, having a multiplier effect on employment generation and thereby help in the process of nation-building by way of socio-economic development and growth of manufacturing sector in the country. Apart from direct employment of 300 personnel, about 2000 personnel would be indirectly employed when the project becomes fully operational.