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    Centre okays Rs 155 crore for building 47 ships

    Synopsis

    In response to queries from ET, the shipping ministry said that 95 applications have been received till now seeking an in-principle approval for 170 vessels with contract value of Rs 2,620 crore.

    shipsAgencies
    The guidelines of the policy have been in force from April 1, 2016 and shall be applicable for shipbuilding contracts signed between April 1, 2016 and March 31, 2026.
    The Centre has approved financial assistance for 47 vessels amounting to ₹155 crore under the Shipbuilding Financial Assistance Policy (SBFA). The total contract value of these ships stands at ₹850 crore.

    In response to queries from ET, the shipping ministry said that 95 applications have been received till now seeking an in-principle approval for 170 vessels with contract value of Rs 2,620 crore.

    The guidelines of the policy have been in force from April 1, 2016 and shall be applicable for shipbuilding contracts signed between April 1, 2016 and March 31, 2026.

    "The focus of the policy is to make domestically produced ships competitive with Chinese ones. Till date we have not rejected any request for financial assistance under the policy," an official told ET on condition of anonymity. "Shipyards will have to make their own investments if they intend to undertake capacity expansion. The purpose of the policy is to support specific ship building projects."

    Under the SBFA policy, 21 shipyards having various capacities have registered under the scheme. Prominent companies registered under the scheme include L&T Shipbuilding Ltd, Cochin Shipyard Ltd, Titagarh Wagons Ltd and Goa Shipyard Ltd.

    "Financial assistance is being granted to Indian shipyards equal to 20 per cent of the lower of contract price or the fair price or actual payments received of each vessel built by them for a period of at least 10 years commencing 2016-17. This rate of 20 per cent will be reduced by 3 per cent every three years," said a shipping ministry statement.

    Under the policy, only those vessels, which are constructed and delivered within three years from the date of contract, shall be eligible for availing financial assistance. In case of specialised vessels, the Centre can grant an in-principle approval for construction and delivery of such vessels for up to six years.

    Prior to the existing policy, the Centre had a shipbuilding subsidy scheme for Indian shipyards which expired in 2007. The earlier scheme had provided subsidies for domestic orders of 80 metres length and above which were obtained only on a global tender basis. Export orders were also eligible for subsidy.


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