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Govt’s expanded specialised vessels list a plus for Cochin Shipyard

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KOCHI : Cochin Shipyard Ltd will gain from the government’s decision to expand the list of ‘specialised vessels’ that are eligible for a state-aid introduced in April 2016 for a ten-year period. In April, the Ministry of Ports, Shipping, and Waterways added Wind Turbine Installation vessels; Self-Propelled Semi-submersible Heavy Lift and Heavy Transport vessels; Windfarm Service and Maintenance vessels and Cable Laying vessels to the list of ‘specialised vessels’.

In November 2022, state-run Cochin Shipyard said it had secured a “prestigious” export order from an unnamed European client for constructing a Commissioning Service Operation Vessel (CSOV) for offshore wind farms. The contract is valued at around Rs1,000 crore with potential for more orders in the series, the company said while announcing the order.

Cochin Shipyard will receive an extra 14 per cent on the contract price of the Commissioning Service Operation Vessel as subsidy from the government per a ‘Shipbuilding Financial Assistance Policy’ approved by the Union Cabinet.

The financial assistance to shipbuilders, both state-owned and private, is valid for a ten-year period beginning 1 April 2016, scaling down the quantum by three percentage points every three years, starting with 20 percent during the first three years, 17 percent for the next three years, 14 percent for the subsequent three years and 11 percent in the tenth year.

A ‘specialized vessel’ is a type or class of vessel built for a specialized purpose, according to the shipbuilding financial assistance scheme.

In comparison, a ‘standard vessel’ is a vessel that is not a specialized vessel and for which fair price is determined on a periodic basis by the competent authority based on international price trends.

For all vessels other than specialized vessels, the financial assistance will not exceed Rs 40 crores per vessel.

The list of specialised vessels originally included LNG tankers; LPG carriers; passenger vessels with a minimum capacity of 500 passengers; chemical tankers; floating or submersible drilling or production platforms; floating, production, storage and offloading (FPSO) units; floating, storage and offloading (FSO) units; floating, storage, regasification Units (FSRUs); mobile offshore drilling unit (MODU) or rigs and mobile offshore production units.

Self-Propelled Dredgers were added to the list of ‘specialised vessels’ list in December 2021, months ahead of Cochin Shipyard signing a contract with Dredging Corporation of India Ltd (DCI) in March 2022 for constructing a trailing suction hopper dredger (TSHDs) having a hopper capacity of 12,000 cubic metres, with Dutch technology support, in a deal worth some Rs950.

On this order, Cochin Shipyard is entitled to receive an extra 17 per cent on the contract price of the dredger as state aid.

The dredger christened ‘DCI Dredge Brahmaputra’ is being constructed with technology and design support from IHC Holland B V, the world’s largest dredger builder.

This is the first dredger to be built by Cochin Shipyard at its facility in Cochin following a memorandum of understanding (MoU) signed with IHC in November 2020 for collaboration on technology and design for high capacity, complex dredgers.

Cochin Shipyard, India’s top shipbuilder, is also looking to tap the rising global focus on erecting offshore wind farms for sustainable and green energy solutions.

Offshore wind farm commissioning service operation vessels (CSOVs) and service operation vessels (SOVs) are part of an emerging, highly specialised niche vessel segment.

These vessels are designed and built for the commissioning, service, maintenance, and operational needs of the offshore wind industry. CSOVs are equipped with 3D motion compensated gangway system (walk2work), 3D crane, which form the mission equipment, and a helideck.

The vessels will have an in-built Dynamic Positioning system and carry ‘Clean Design’ notation. The vessels are also provided with advanced green solutions aimed at emission reduction through alternate fuels.

The order has propelled Cochin Shipyard into the league of early movers in the high-end and niche global wind farm vessel construction segment.

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