Dredging co with foreign ties on cards

NEW DELHI: If you can’t beat them join them. Facing fierce competition from Dutch and Belgian companies in dredging, India has decided to float a mega dredging outfit which could have them as partners.

The company would be set up as a 50:50 public-private partnership in which JNPT, Mumbai Port Trust, Kolkata Port Trust, Mazagon Dock and Shipping Corporation of India (SCI) would jointly hold 50% stake The JV which would involve a total investment of Rs 5000 crore is likely to be fully functional by the end of 2007, a government official told ET.

“With the demand for capital dredging work increasing across the country at existing and new ports, there was a need to create such a dredging company. DCI is focused more on maintenance dredging and has limited resources for capital dredging,” a shipping ministry official said.

The JV would concentrate primarily in the Indian region, and also be involved in the ambitious Sethusamudram project.
While the government is yet to invite expression of interest for interested private dredging companies, some Dutch and Belgian companies, it is learned, have already made a beeline to become partner.

The idea of a dredging JV was initially mooted to counter the dominance of Dutch and Belgian companies in the sector. About 90% of the dredging business in the country is in the hands of Dutch and Belgian companies.

“Since these foreign companies have the required expertise which is lacking in the country, a 50% holding of one or more of these companies should not raise any objections,” a government official said.

The participation of these foreign companies is also expected to give the JV recognition besides technical expertise.

“Dredging Corporation of India, the only dredging PSU in the country, is not known world-wide. The foreign participants of the JV, being internationally known for their dredging prowess, would help in making raising of credit much easier for dredging activity,” the official said.