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Hyundai bargain

HYUNDAI Heavy Industries Ltd has won a bargain for lowering the price of four Aframax carriers to be purchased by the Shipping Corporation of India. The purchase was cleared by the Union Cabinet recently.

In return for reducing the cost per vessel from $36.28 millions (the price quoted when fresh bids were invited in February) to $35.76 millions (Rs. 157.02 crores) through negotiations with a government team, the South Korean shipbuilder has got the deliv ery time for each vessel extended by 12 months on an average as against the earlier offer.

The first vessel will be delivered by Hyundai in 34 months from the date of signing the contract as against the earlier delivery period of 22 months. The fourth vessel will be delivered in the 38th month of signing the contract as against the earlier sch edule of 26 months.

The South Korean company argued that the delivery time has been extended primarily because all its ship building berths are busy, a fallout of the time taken by the SCI to confirm the Aframax orders.

With the delivery period extended by 12 months on an average, it remains to be seen whether this will have an impact on the cost per vessel, especially after factoring in the interest during construction (IDC) component. The SCI will acquire the Aframax crude oil tankers on cash basis. -- Our Bureau