With its 15 dredgers ageing – their average age is 20 years – and replacements proving to be cost-intensive, state-owned Dredging Corporation of India (DCI) is planning to tap cash-rich ports (that are also its customers) for resources.
With its 15 dredgers ageing – their average age is 20 years – and replacements proving to be cost-intensive, state-owned Dredging Corporation of India (DCI) is planning to tap cash-rich ports (that are also its customers) for resources.
“Under this model, we want to take an advance from ports and use the proceeds to buy new dredgers. We will repay the ports in the form of our dredging services,” said D K Mohanty, DCI’s CMD.
The ageing dredgers have affected DCI’s October-December performance. “There is an increase in operations cost due to the old age of the fleet and this is eating into the margins,” said Mohanty.
Yet, DCI has started the process of replacing three of its old dredgers with the newly acquired 5,500 cubic-metre dredgers. “We had raised about `800 crore through external commercial borrowings and had drawn about `550 crore from that amount to buy two dredgers. We have now placed an order for another dredger worth `500 crore. To finance this, we are issuing tax-free bonds,” said the CMD. DCI’s tax-free bonds opened on March 7 and will close next Friday.
The first of the new dredgers was received last year; the second one is expected to join the fleet in June; and the third one in January or February next year. DCI is in the process of acquiring two 9,000 cubic-metre dredgers with an outlay of `1,200 crore. Mohanty said there are several ports like Kandla, Paradip and JNPT that have sufficient funds and could lend a part of their funds to DCI. “We will repay that with interest in the form of our services. This arrangement would also give us work for a period of time,” said Mohanty.
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