Mumbai, July 8: The Oil and Natural Gas Corporation (ONGC) will have to shell out around Rs 75 crore to five shipping companies following the ministry of petroleum and natural gas' acceptance of recommendations of the Saksena committee report.The committee was set up in March 1995 to charter the hire rate payable to these companies for ONGC's use of their 25 offshore supply vessels (OSVs). The vessels were hired between 1983 and 1986. Of the five companies, the Shipping Corporation of India (SCI), which has deployed 10 OSVs with ONGC, will alone get around Rs 30 crore. According to sources, ONGC has already paid around Rs 21 crore to the company while the balance is expected to be paid soon. The remaining four firms -- Essar Shipping, Great Eastern Shipping Company (Gesco), Varun Shipping and Garware Shipping -- will share the remaining Rs 45 crore.
The committee, which submitted its report in February 1996, had made recommendations for determination of the daily charter hire rates of 25 OSVs beyond 12years. It also resolved some outstanding issues pertaining to the initial 12-year period. The daily charter hire of OSVs was governed by the DG (directorate general of shipping) formula. According to a communique issued by the joint secretary, government of India, Shivaraj Singh, a copy of which is available with The Financial Express, the ministry has directed ONGC to take immediate action.
Except for the recommendation on the cost recovery factor (CFR), the petroleum ministry has accepted most Saksena committee recommendations. As regards the fixation of the daily charter rate for 25 OSVs beyond 12 years, the ministry has accepted a divisor of 341 days per annum duty cycle for calculation of the day charter rate and operating expenses for all the OSVs from the thirteenth to sixteenth years.
The compensable down time for the thirteenth to sixteenth years and for the eleventh and twelfth years would be as follows:
Three day per quarter cumulative for two quarters for breakdown andmaintenance; 14 days for every statutory dry docking up to two dry dockings in the total period from the eleventh to sixteenth years. In case any OSV is dry docked third time during the period, compensable down time of 2.6 days is accorded for the third dry dock; 10 days have been granted for statutory special survey (once a year).As regards operating expenses, the ministry has agreed to fix wages of the crew members in accordance with the wage agreement entered between INSA-MUI and INSA-NUSI.
All the recommendations made by the Saksena committee for victualling (food expenses), repairs and maintenance, insurance expenses and overhead expenses have been accepted.
As for outstanding issues for the second five-year period (sixth-tenth years) and two-year period (eleventh-twelfth years), the ministry has agreed to allow the swapping of loans and revision of operating expenses.
Interest at 16 per cent per annum (simple) on the arrears due on account of revision of cycle has also been agreedto be paid in terms of the award of the committee.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
