Rodolphe Saadé (far left); Jose VJ (far right)
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NEW DELHI: Cochin Shipyard Ltd on Wednesday signed a $360 million shipbuilding contract with France’s shipping and logistics player CMA CGM, marking the first major undertaking of shipbuilding at Indian shipyards for global shipping companies, a space which is currently dominated by China, South Korea and Japan.
On Wednesday, Rodolphe Saadé, Chairman and Chief Executive Officer of CMA CGM Group and Jose VJ, Chairman and Managing Director of Cochin Shipyard Ltd formally signed a contract for building six state-of-the-art LNG-powered container ships of 1700-TEU capacity for the shipping liner. The contract was signed in the presence of Shantanu Thakur, Minister of State of Ports, Shipping and Waterways and Secretary Vijay Kumar.
While the six vessels for CMA CGM, will be manufactured in India, Cochin Shipyard will get assistance in terms of the design and equipment from Korean partners.
“This is a prestigious project for Cochin Shipyard and we will be executing this project in Cochin, in our main facility with the technical cooperation from HD KSOE (Korean Shipbuilding and Offshore Engineering) the global leader in shipbuilding and it will be built as per design of KOMAC (Korea Maritime Consultants Co Ltd) from Korea,” said Jose VJ.
The shipbuilding contract from one of the world’s largest shipping liners has been possible with the government providing financial assistance. Cochin Shipyard’s CMD outlined that the company will get about 23 per cent of the contract value as financial assistance under the Shipbuilding Financial Assistance Scheme.
“In the recent financial assistance scheme which the government has announced, there are different slabs (for subsidy). For vessels up to ₹100 crores there is a certain percentage and for the value above ₹100 crores, the percentage is different. So in this project we will get around 23 percent,” said Jose VJ.
Nagesh Krishna Moorthy, General Manager, Business Development at Cochin Shipyard highlighted that the financial assistance from the government will make the CMA CGM vessel contract price competitive and very close to the prices offered by shipyards such as those in Korea.
Last year, the government unveiled the Shipbuilding Financial Assistance Scheme with an outlay of ₹24,736 crore for Indian shipyards with an aim to bridge cost disadvantages and promote competitiveness.
“We have taken the bold decision to order six 1,700 TEU ships with Cochin Shipyard. I hope it is the beginning of a long lasting relationship. We firmly believe that India can play an important role in this very competitive environment. You have China on one hand, Korea on the other. But I believe that India has all that it requires to also be a country that will be building ships for CMA CGM and the rest of the industry,” said Saadé.
Cochin Shipyard is contracted to deliver the first vessel 36 months and then thereafter two vessels every year.
