To attract private shipbuilders from across the globe, Deendayal Port Authority (DPA) in Gujarat is looking to lease 2,000 acres in Kutch district to develop a shipbuilding cluster. The target is to annually build 50 very large crude carriers (VLCC) or similar class of sea-going vessels with 3.2 lakh dead weight tonnage (DWT) capacity each.
The ₹27,000-crore greenfield project is expected to come up in Veera village, near Tuna Tekra. SK Singh, Chairman of DPA, which operates India’s oldest major port at Kandla, told businessline, “We have already floated an expression of interest (EoI) for auctioning 2,000 acres at Veera. We will give land on lease to an industry partner who has the capability in designing and constructing shipyards anywhere in the world.”
While a private partner will build the shipyard, DPA will make available land with a 1.2-km waterfront on a 30-year lease. It will also provide connectivity and the basic infrastructure needed to operate the facility. “We are trying to test the market… offering this land parcel and waterfront in an advantageous location in Kandla. We are in search of a private player who has the appetite for setting up this kind of facility and can arrange for the funds. We are even ready to enter into a joint venture with the private partner and take equity. We are open to all kinds of models,” Singh explained.
Idling capacity
Once completed, the greenfield project will become the 11th shipyard in Gujarat, which already has shipbuilding capacity of over 5.4 lakh DWT, most of which is idling. Usually the shipbuilding capacity of a yard is defined in terms of the number of vessels built and their maximum carrying capacity. In the past decade, six of the biggest shipyards in Gujarat downed shutters, including two belonging to ABG Shipyard — at Magdalla and Dahej, respectively; one belonging to Pipavav Shipyard at Pipavav; and two State-owned facilities — Alcock Ashdown at Bhavnagar and Chanch in Amreli district.
A decade ago, Pipavav Shipyard (formerly known as Reliance Naval and Engineering Ltd), with 4 lakh DWT capacity, was the biggest shipbuilder in the country. Post slowdown and closure, the unit was recently taken over by Swan Energy, and it resumed operations by refitting a fast patrol vessel of the Indian Coast Guard in December 2024. ABG Shipyard, the second largest private sector facility (1.2 lakh DWT), remains dysfunctional. Among the public sector companies, Alcock Ashdown (15,000 DWT) — the third largest after Cochin Shipyard and Hindustan Shipyard Ltd — continues to idle.
Global interest
Asked why Kandla seeks to build a greenfield project when several shipyards are dormant in the State, the DPA chairman said, “In every market survey we have conducted, there is some demand for shipbuilding. We expect private entities to come up with proposals. The shipbuilding infrastructure in Japan and South Korea is saturated, and they may explore countries like India to set up joint venture projects.” With 0.05 per cent share, India ranks 20th in the $146-billion global commercial shipbuilding market, which is led by China, South Korea and Japan, according to KPMG.
Among the 35-odd functional shipyards in India, Cochin Shipyard leads with 1.1 lakh DWT capacity, followed by Hindustan Shipyard (80,000 DWT), and Shoft Shipyard (10,000 DWT).
At the end of financial year 2022-23, these 35-odd entities cumulatively had an order book of 433 ships with gross 2.49 lakh DWT. Among public sector companies, Cochin Shipyard delivered the highest tonnage — 14 ships with 2,880 DWT. In the private sector, Mandovi Drydocks led with 14 ships and 13,400 DWT, followed by Sea Blue Shipyard (17 ships with 5,400 DWT), and San Marine (10 ships with 3,660 DWT).
New projects
Despite the dormancy, newer projects continue to be announced. DPA plans to build a ship-repair hub at Vadinar in Devbhumi Dwarka district, Gujarat. The ₹1,700-crore project is being executed in a joint venture with Cochin Shipyard. During the 10th edition of the Vibrant Gujarat summit in January 2024, five proposals to build new shipyards in Gujarat were received from big entities like ArcelorMittal Nippon Steel and Mandovi Drydocks, as also little-known ones like Unicorn Docks and Port Engineers. The agreements with the Gujarat government are for future shipbuilding yards at locations like Hazira, Kutch, Bhavnagar and Amreli.
