Shipbuilding Subsidy May be Revived

Wednesday, October 08, 2008

The ministry of shipping is considering reviving subsidy on shipbuilding to enable the industry to be globally competitive.
Currently, ’s share of global shipbuilding orders stands a minuscule 1percent.
The subsidy scheme had expired on August 14, 2007.
T R Baalu, Union minister of shipping, road transport and highways, said the ministry is thinking of circulating a cabinet note on subsidy this week.
The previous subsidy scheme provided a 30% incentive on the contract value of ocean-going merchant vessels more than 80 metres in length sold to Indian companies, and on all ships sold to foreign firms.
A report by audit and consultancy KPMG on shipbuilding subsidies across the globe last year showed that Indian yards suffer a minimum cost disadvantage of 32-37% on the price of a typical ship.
That’s because countries such as , , and give many direct or indirect incentives and subsidies to their own shipyards.
The firm was hired by the Shipyards Association of India (SAI) after finance minister P Chidambaram asked for a study on shipbuilding subsidies given by other countries and the quantum of such subsidies.
The ministry is also planning to streamline taxes and fiscal structure to offset the disadvantages faced.
However, a modified scheme may see the subsidy cut from the earlier 30%. Industry sources suggest that based on the studies conducted by the ministry, talks are on to reduce it to 20% for the next 10 years.
However, one point has been made clear that the new scheme would be an extension and take into account all the orders booked after the old subsidy expired.
Datar also said that thrice earlier draft notes have been circulated but with no outcomes.
currently has orders worth Rs 22,000 crore to be executed in its 23 shipyards, which are mostly in the private sector, barring nine run by the government.
All the private yards including ABG Shipyard, Pipavav Shipyard, Bharati Shipyard Ltd, Larsen and Toubro Ltd etc and newer ones that are planned have outlined capacity expansions worth Rs 20,000 crore in the next 3-5 years.

Source:  DNA

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

TOTE, Saltchuk Secure Financing for Marlin Class Vessels

Maritime Administration to Provide Title XI Loan Guarantee for World’s First LNG Containerships Today, the U.S. Maritime Administration (MARAD) announced a $324.

All-electric Tube Benders Take a Step Forward

The tube bending machine innovator Unison said it is moving the technology forward again, with the completion of a groundbreaking all-electric machine that is capable

Navantia Orders Sedni IAS for PEMEX Flotel

Sedni secures an important contract with Navantia to supply its Automation System (IAS) Diamar for the flotel vessel (BAP) which is being built at Ferrol factory for PEMEX owner.

 
 
Maritime Careers / Shipboard Positions Maritime Security Naval Architecture Navigation Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1743 sec (6 req/sec)