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Published on January 10th, 2017

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Expert Appraisal Committee gives green nod to CSL expansion plan

The expansion plan of state-run Cochin Shipyard Ltd (CSL) by constructing a new dry dock- its third – to help build and repair bigger ships has won environmental and coastal regulation zone (CRZ) clearances from the expert appraisal committee in the ministry of environment, forest and climate change. The clearance from a key agency of the ministry tasked with scrutinizing projects on environment and CRZ angle sets the stage for an initial public offering (IPO) of shares in Cochin Shipyard to part-fund the new dry dock within the yard and the international ship repair facility it is setting up at the premises of the adjacent Cochin port. Cochin Shipyard will invest Rs 1,799 crores to boost its shipbuilding and repair capacity, to be funded partly through internal resources and partly through the planned share sale. The new dry dock would be a ‘stepped’ dock with a length of 310 m, width of 75m at the wider part, and width of 60m at the narrower part and depth of 13m with a draught of up to 9.5m. This stepped dock will enable longer vessels to fill the length of the dock and wider, shorter vessels and rigs to be built or repaired at the wider part. The planned international ship repair facility involves setting up of ship lift and transfer system which will allow CSL to repair smaller ships. India’s biggest state-owned shipbuilder by capacity has mandated a consortium of SBI Capital Markets Ltd, J M Financial Institutional Securities Ltd and Edelweiss Financial Services Ltd, as merchant bankers for the share sale that has approval from the cabinet. The IPO involves the sale of 34 million equity shares of Rs.10 each translating into an equity capital of Rs.33.984 crore of Cochin Shipyard. The offer comprises fresh issue of 22,656,000 million equity shares and the central government’s stake of 11,328,000 million shares. When the share sale happens, it will make CSL the first public sector shipyard to be listed. The EAC approval is subject to clearance from the National Board for Wildlife, according to the expert appraisal committee. CSL currently has two dry docks, each exclusively used for building and repairing ships. The shipbuilding dock can construct ships with a capacity of 110,000 DWT while the repair dock can repair ships of 125,000 DWT. The new dry dock will help CSL tap the market potential of building specialized and technologically advanced large vessels such as Liquefied Natural Gas (LNG) vessels, Indigenous Aircraft Carriers of higher capacity, Jack up Rigs, Drill ships, large Dredgers and repairing of offshore platforms and larger vessels. This big sized dry dock is a critical requirement of CSL to promote ship building and is a step in the direction of “Make in India” initiative of the Government, a spokesman for the shipping ministry said.

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