Recent vessel acquisition spree by Indian ship owners has helped to bolster the national shipping tonnage.
After a two-year slump, the Indian shipping tonnage registered a robust growth to touch the all time high of 9.71 million GT as of 30th April 2010. This buoyancy is expected to continue and the tonnage could well cross the 10 million mark soon as several shipping companies are taking advantage of the very low prices in today’s market to acquire second hand tonnage. Besides, others have placed orders for new buildings and are maintaining the scheduled deliveries.
The number of vessels that are now registered with the Directorate General of Shipping, Government of India - the regulatory body with whom all Indian ships are licensed as required under the Merchant Shipping Act of 1952 - has also shot up to 1006. This too is a new record figure never achieved. According to sources in the Directorate the number of coastal vessels stands at 677 and ocean going at 329.
What is significant about this robust growth is that it is in direct conflict with the fears expressed by the Indian National Shipowners’ Association’s about Indian shipping companies flagging their ships out. The reason they have been extending is that Indian shipping industry does not have a level playing field vis-à-vis players from other maritime nations where the taxation burden is around zero to 0.5% tax as compared with that for Indian shipping being around 8%.
In the month of April 2010 five shipping companies went in for acquisition with each adding a vessel each to their fleet. These were: Tolani Shipping Company; Goodearth Maritime Ltd.; GESCO; Essar Offshore and Affable Fisheries Pvt. Ltd. Four companies in the coastal trade also acquired one additional vessel during the month of April. These being: Ocean Sparkle Ltd.; Adel Shipping & Logistics Pvt. Ltd.; TAG Offshore Ltd.; and PFS Shipping (India) Ltd.
Many shipping majors have firmed up expansion plans. Heading the list is state owned Shipping Corporation of India which has outlined a $ 4 billion capex to acquire 36 ships, over and above the current order booked for 32 vessels. Great Offshore acquired a second hand rig in March this year and will be taking delivery of another 350 feet jack-up rig and a new multi supply vessel by the end of the current fiscal. Mercator Lines, which already owns eight ocean-going oil tankers of different size and carrying capacity, plans to acquire four second-hand Aframax ships this year. Dredging Corporation of India will soon be taking delivery of two dredgers. Similarly, other companies too are considering market conditions for their vessel acquisition.