Government-owned Shipping Corporation of India (SCI) is planning to have a 50:50 joint venture agreement with Coal India and National Thermal Power Corporation (NTPC) to ferry thermal coal for power projects in India.A senior company official close to the development said, “SCI plans to cater to import of thermal coal mainly from Indonesia and South Africa. The company has exchanged notes with Coal India and NTPC in this regard. However, since SCI’s follow-on public offer is coming up next month, the company is not willing to disclose more.”Coal India and NTPC account for majority of coal imports in the country. India currently imports about 28.5 million tonnes of thermal coal per annum, with NTPC alone accounting for around 12.5 million tonnes. Coal India will import around 6 million tonnes of thermal coal in 2010-11 largely based on the orders placed by companies.The proposed joint venture is likely to be managed by SCI, as it has the domain expertise in the field. The JV will be formed on the lines of the joint venture with the Steel Authority of India (SAIL) to import coking coal for steel plants.
The joint venture is likely to look at buying separate vessels for import. In the case of SAIL, SCI plans to buy two Panamax vessels of 65,000–80,000 dead weight tonnage (dwt) at a total cost of around $90 million. The company will do the same in case of Coal India and NTPC, once the desired volume is achieved.
India, one of the world’s five biggest buyers of coal, uses the fuel for more than half of its power generation capacity. The government estimates the power industry will grow by 9.5 per cent annually until March 2012, as it aims to end blackouts and sustain economic expansion.SCI is in the process of raising Rs 1,400 crore through a follow-on public offer in which the government will sell 10 per cent stake and issue another 10 per cent fresh equity. The government’s 80.12 per cent stake will come down to 63.75 per cent after the issue.
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