SCI to spend Rs3,768 crore on expansion in FY 2011

Shipping Corporation of India (SCI) has earmarked Rs3,768 crore for expansion in the current financial year with 80 per cent of this capital expenditure, or about Rs3,000 crore  to be funded through debt raised overseas.

The state-owned shipping firm is also bullish on the container segment despite a March quarter loss of Rs6.17 crore.

According to S Hajara, chairman and managing director, SCI, the planned capital expenditure for the financial year is around Rs3,768 core and the company would be funding around 80 per cent of this through external commercial borrowings. A significant amount of the capex would go towards fleet expansion.

The company is to add around 17 vessels this fiscal with six being Handymax bulk carriers, two Supramax bulk carriers, eight anchor handling tugs and supply vessels and one platform supply vessel.

The company posted a Rs6.17 crore loss, with a pre-tax loss in its container segment at Rs18.32 crore. Company officials attribute the loss in the container segment to ''market cycles''.

According to BM Mandal, director-finance SCI, the company witnessed a major drop in freight rates in the liner segment against a considerable increase in oil prices (bunker costs). The company was however positive that the freight rates would move up.