India’s SCI Seeks Six Newbuild LNG Containerships in Its Biggest Tender
India’s state-run Shipping Corporation of India (SCI) is continuing to move forward with its growth plans aligned with the country’s ambitions to reduce its dependence on foreign-flag carriers and to expand its shipbuilding capabilities. A new tender was released on July 31, which is the largest containership project in the history of the company and its second containership tender in recent months.
The new tender is open both domestically and internationally, seeking bids for up to six 8,000 TEU 14,000 dwt containerships. They would be among the largest containerships for the company and the Indian flag and would be dual-fuel LNG vessels. Among the characteristics described in the tender are vessels with 1,000 reefer slots and an air draft suitable to make entry into U.S. container ports. The ships would measure about 330 meters (1,083 feet) and have a service speed of 17 knots. They are designed with a range of 20,000 nautical miles. Responses to the tender are due by August 31.
Reflecting the government’s plans to make India into a world-class shipbuilder, the tender provides special considerations for Indian shipyards in the global competition. It permits the yard, if it does not have experience building containerships, to form a technical tie-up or collaboration with an established international shipbuilder that has containership experience. It will be a fixed-price contract for two firm orders and four options, but the yard cannot subcontract construction. Estimates set the value of the contract at $720 million.
As an additional nod to the Indian shipbuilders, the tender provides further competition with the international market. The lowest price qualified Indian shipbuilder will be offered a Right of First Refusal against the lowest foreign shipyard. If the lowest Indian bidder fails to match the bid from the lowest foreign shipyard, the same first right option will be extended in turn to each of the other Indian yards in the order of the lowest bid first.
The new containerships are part of the government’s broad plans for the shipping industry. This year alone, it expects commitments for 62 new vessels representing an investment of $5.3 billion. In May, it was reported that the government expects as many as 437 vessels to be built or acquired by 2042. The majority (over 200) will be for oil and gas, while SCI is slated to add 58 ships. Also, a new joint venture container operation, Bharat, is projected to add 51 vessels.
SCI has already launched a tender valued at $360 million for up to six 1,700 TEU vessels that are designed to be methanol dual-fuel feeders. That tender was published in April and also provided special consideration for the Indian shipbuilders.
Another project that was recently opened proposes India’s first domestically built Aframax tankers. SCI called for proposals for four vessels.
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The government has announced a series of financing plans to help the development of the shipbuilders. It is also providing financial incentives to the shipowners to build new vessels.
Cochin Shipyard has already received an order from CMA CGM to build LNG-fueled containerships, and it is expected to be one of the key competitors. The newly launched Swan Defence and Heavy Industries is also seen as a key competitor, benefiting from the former Reliance yard, and L&T Shipbuilding is also a strong competitor for the new projects. Garden Research Shipbuilders is forming a consortium to bid for the projects, and the major South Korean builders have also shown strong interest in Indian partnerships. HD Hyundai has already announced agreements as it looks to contribute to the growth of shipbuilding in India, with the other major builders expected to also contribute to the Indian government’s plans.
