Shipping Corporation plans stakes in logistics players

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Kolkata, Jul 24 : Shipping Corporation of India Ltd (SCI) is poised to take participatory interest in railway transportation, terminal management, inland container depot (ICD) and container freight station (CFS) operations, with the government clearing its promotion from a mini ratna public sector undertaking to a navaratna.

S Hajara, chairman and managing director, said SCI is sitting on cash reserves of Rs 2,000 crore and taking participatory interest in other areas of logistics besides carrier operations would not involve "large capital expenditure."

For its own carrier operations, SCI plans to invest $5 billion over the next ten years to buy 70 ships, with orders for 28 ships worth $1.6 billion already placed. SCI would place orders for four more ships in August.

Hajara said SCI is looking for partners to form joint venture companies that would in turn take up a stake of at most 26% in logistic companies that are into railway transportation, terminal management and ICD & CFS operations.

"Liberalisation of rail services and breaking away from the monopoly of Concor will benefit trade," Hajara said, referring to the erstwhile Container Corporation, a unit of Indian Railways.

The government began to open up Indian Railways in 2005-06 by introducing a own-your-wagon scheme, which was later modified to the wagon investment scheme.

SCI has already expressed interest in managing the new terminals coming up at the Jawaharlal Nehru Port Trust and Ennore port. These terminals will be capable of handling 4 million TEUs.

SCI is in talks with the Mediterranean Shipping Company and Concor to get them as partners in terminal management, Hajara said.

He said SCI has signed an MoU with Steel Authority of India Ltd to form a joint venture company that will carry SAIL's coking-coal imports, a job that SCI used to do for SAIL so far.

SCI and SAIL will limit their stake in the new shipping company to less than 50% and invite private players to take the rest.

Ranen Nag, SAIL's executive director for transport & shipping, said SAIL planned to import around 20 million tonne of coking coal annually by 2011-2012 from 9.9m tonne this year, so saving on ocean freight would be important.