Shipping Finance Corporation still a long way off: minister
27 Jul 2009
There is no immediate plan for setting up a Shipping Finance Corporation although commercial banks may extend easy credit facilities to shipping companies in India for acquisition of ships in view of the global financial crisis, union minister of shipping G K Vasan informed the Lok Sabha in a written reply.
The shipping ministry, he said, had sought help from the finance ministry for providing soft loans to shipping companies for acquisition of ships on account of the current financial meltdown.
The finance ministry, however, has not committed itself to offering cheap capital to shipping companies, nor has the Indian Banks' Association set up any panel to look into the issue, the finance ministry today clarified.
Individual shipping companies can take up the matter with the banks, the ministry further clarified.
The shipping ministry, meanwhile, has proposed that the Infrastructure Finance Company Ltd (IIFCL) provide loans to shipping companies for vessel acquisition.
However, the finance ministry is of the opinion that IFCL's job is financing viable infrastructure projects and, accordingly, it has been providing financial support to improve the viability of infrastructure projects. The acquisition of ships is basically purchase of capital equipment and not funding of infrastructure projects.
Meanwhile, the shipping minister said the proposal of signing and ratification of the Hong Kong International Convention for the Safe and Environmentally Sound Re-cycling of Ships is under consideration.
