MUMBAI : State-run Shipping Corporation of India Ltd (SCI) has initiated steps to buy five ships, all second hand of various types, with an investment of some Rs.2,000 crores, in an indication that the ‘unofficial’ freeze on acquiring ships due to the on-going privatisation exercise has been lifted, multiple sources said.

The board of the national carrier has given “in-principle” approval to the ship purchases by 31 March, that includes a very large gas carrier (VLGC), a medium range tanker (MR Tanker), a container ship of over 9,000 twenty-foot equivalent units (TEUs) capacity, a platform supply vessel (PSV) and one anchor handling, towing and supply vessel (AHTSV), one of the sources, a Government official, said.

Shipping Corporation of India last expanded fleet in FY2017 when it acquired four vessels – two platform supply vessels, one VLGC and one Suezmax tanker – all second hand.

In December 2020, the Department of Investment and Public Asset Management (DIPAM), the government’s asset sale department, started the process of privatising Shipping Corporation of India, a so-called ‘navratna’ public sector undertaking, by selling the government’s 63.75 percent stake to a strategic buyer. The sale process is yet to reach a conclusion.

SCI is India’s biggest shipping company by fleet size and is the country’s only shipping company that owns very large crude carriers or so-called oil super tankers. It has five VLCC’s on its fleet.

The carrier has not purchased a ship for more than six years while its fleet strength is getting “depleted” as older ships are sent to the scrap yards. In comparison, its private rivals have expanded their fleet through second hand purchases at regular intervals.

SCI currently runs a fleet of 59 ships of various types of which one product tanker will be heading for the scrap yard in February.

“This issue was discussed in a recent board meeting wherein it was decided to initiate steps to buy ships,” the Government official said.

“We are in the market to acquire second hand ships,” said a senior Company official.

“Disinvestment happening or not happening, we are going to be aggressive in ship acquisition. Our idea is to multiply the fleet in the next 2-3 years. Our main revenue earning assets are vessels and if that is getting depleted because of age, we have to take corrective measures,” the official said.

“My bottom line is if I don’t earn on the fleet, I have no future,” the official said.

The Ministry of Ports, Shipping, and Waterways, which administers the Company, has also made it clear that the carrier’s “business plans should not suffer” due to the disinvestment process, the government official mentioned earlier said. Private fleet owners can acquire ships quickly while SCI being a state-owned company has to “follow the process”.