SCI plans to add two more crude tankers to its fleet

Kailash Rajwadkar

Mumbai, July 17: The Shipping Corporation of India (SCI) is evaluating plans to order two new crude tankers with a capacity of 1,40,000 DWT (dead weight tonnage). The proposal, which is currently awaiting approval from the Public Investment Board, would cost around $45-50 million for each tanker, senior SCI officials said.

The proposal, which is expected to be considered by the PIB at its meeting next week, will be funded by external commercial borrowings (ECBs) and internal accruals in a 70:30 ratio. The decision to order these crude tankers is in tune with SCI’s plan to add more tonnage, officials said.

The two tankers are in addition to its fleet acquisition programme of eight tankers, two bulk carriers and three container vessels which it had planned for the current fiscal. At the current freight rates in the tanker segment, the two vessels would normally generate charter rates of around $ 30-35,000 per day, officials said.

The average charter rates for the tanker segment have currently softened from a high of around $40,000 per day in January this year to the current levels of around $26,000 per day.

This resulted in SCI registering a net profit of Rs 111.72 crore on a turnover of Rs 792.24 crore for the quarter ended June 2001. The net profit, though robust when compared to the corresponding quarter last year, was down as compared to its preceding two quarters.

Meanwhile, SCI’s board is considering extending a VRS scheme to all the employees to enable them to seek tax concessions under the Income-Tax Act for the consideration received.

SCI’s VRS launched for its employees (excluding the professionals) did not provide for tax relief as the VRS was restricted to certain employees and not to the entire staff. This makes the entire amount of consideration above Rs 5 lakh taxable, officials said.

However, despite the VRS being made open to all employees, the management will have its prerogative in granting VRS thereby succeeding in retaining its professionals, officials said.