The priority in chartering is given to ships built in the country is expected to raise the demand for such vessels, giving them additional market access and business supportNew Delhi: The government has revised its guidelines for chartering of ships, with ships built in India set to receive priority in chartering under a new policy, the Shipping Ministry has said. The priority in chartering given to ships built in the country is expected to raise the demand for such vessels, giving them additional market access and business support, the ministry said.
Right of First Refusal to indigenous ships
“In a big step to promote the Make in India initiative and incentivise shipbuilding activity in the country, the Ministry of Shipping has revised its guidelines for chartering of ships by providing Right of First Refusal (RoFR) to ships built in India,” Shipping Minister Nitin Gadkari said in a statement.
“Henceforth, whenever a tendering process is undertaken to charter a vessel, a bidder offering a ship built in India will be given the first priority to match the L1 quote.”
Gadkari will launch the policy in Mumbai on Tuesday during the inauguration of the two-day Regional Maritime Safety Conference. The RoFR was previously reserved for Indian flag vessels as per the relevant provisions of Merchant Shipping Act, 1958, prior to the revision of the guidelines, he said.
‘Boost to domestic shipbuilding industry’
“The review is also in line with the need to give a long term strategic boost to the domestic shipbuilding industry, the need to encourage the domestic shipping industry to support the domestic shipbuilding industry, and the need to develop self-reliance and a strong synergy between these vital industries for the overall long term development and economic growth of the country,” Gadkari added.
Eligibility condition and rules for exercising RoFR
“The RoFR would be exercised only in case the vessel being offered for charter by the lowest bidder (L1) has been built outside India. For any bidder to exercise RoFR, his bid should be within the Margin of Purchase Preference, which will be 20 percent of L1,” an official statement said.
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