The government’s expanded special ships are a plus for the Cochin shipyard

Mumbai-listed Cochin Shipyard Ltd will benefit from the government’s decision to expand the list of “special purpose vessels” eligible for a 10-year state aid scheme introduced in April 2016. In April, the Department of Ports, Shipping and Waterways added ships to install wind turbines; Self-propelled semi-submersible heavy lift and heavy transport vessels; wind farm service and maintenance vessels and cable-laying vessels to the list of “special purpose vessels”.

In November 2022, the state-owned Cochin Shipyard announced it had received a “prestigious” export order from an unnamed European customer to build a Commissioning Service Operation Vessel (CSOV) for offshore wind farms. The contract is worth around Rs 1,000 crore with potential for more orders in the series, the company said when announcing the order.

Cochin Shipyard will receive an additional 14 percent on the contract price of the operational vessel for commissioning service as a grant from the government under a Union Cabinet-approved “Shipbuilding Financial Assistance Policy.”

The financial support for state and private shipbuilders is effective from April 1, 2016 for a period of ten years, with the amount being reduced by three percentage points every three years, starting at 20 percent in the first three years, and 17 percent for the next three years, 14 percent for the following three years, and 11 percent in the tenth year.

A “special purpose ship” is a ship type or class of ship built for a specific purpose, under the Shipbuilding Financial Assistance Scheme.

In comparison, a “standard ship” is a ship that is not a special purpose ship and for which the competent authority regularly sets a fair price based on international price trends.

For all ships except special ships, the financial support will not exceed Rs 40 crores per ship.

The list of special ships originally included LNG tankers; LPG carrier; passenger ships 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 offshore platforms and mobile offshore production units.

Self-propelled dredgers were added to the ‘Special Purpose Vessels’ list in December 2021, months before Cochin Shipyard signed a contract with Dredging Corporation of India Ltd (DCI) in March 2022 to build Trailing Suction Hopper Dredgers (TSHDs) with a hopper capacity of 12,000 cubic meters with Dutch technology support in a deal worth about 950 rupees.

As a result of this order, Cochin Shipyard is entitled to an additional government subsidy of 17 per cent on the contract price of the dredger.

Dubbed the DCI Dredge Brahmaputra, the dredger will be built with technology and design support from IHC Holland BV, the world’s largest dredge builder.

This is the first dredger to be built by Cochin Shipyard at their Cochin facility after signing a Memorandum of Understanding (MoU) with IHC in November 2020 to collaborate on technology and design for complex, high-capacity dredgers.

Cochin Shipyard, India’s leading shipbuilder, is also trying to capitalize on the increasing global focus on offshore wind farm construction 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 specialized, 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 a motion-compensated 3D gangway system (walk2work), a 3D crane that forms the mission equipment, and a helipad.

The ships have a built-in dynamic positioning system and carry the Clean Design label. The ships are also equipped with advanced eco-friendly solutions aimed at reducing emissions through alternative fuels.

The order has catapulted the Cochin shipyard into the league of early risers in the high-end and niche segment of global shipbuilding for wind farms.

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