Kandla Shipyard Cancels Tender Following Receipt of Single Bid

The Deendayal Port Authority (DPA) has cancelled its tender for developing a 2,000-acre integrated shipbuilding cluster at Kandla, Gujarat. This decision came after the receipt of only one bid—from a consortium consisting of Pune-based Accurate Industrial Controls and Korea Maritime Consultants Co, (KOMAC)—which failed to meet the strict qualification requirements outlined in the tender.

The DPA's tender aimed to boost India’s shipbuilding capabilities and required that participating entities must have directly designed, executed, and constructed a shipyard capable of producing Very Large Crude Carrier (VLCC) class vessels. This condition effectively ruled out joint ventures or consortia unless the lead entity independently satisfied the criteria. Although the tender allowed joint ventures later in the process, the core qualification standards remained unchanged, which limited the number of qualified participants.

The single bid received from the Accurate Industrial Controls-KOMAC consortium was considered inadequate because the Indian partner did not possess prior shipbuilding experience. As a result, the DPA decided not to proceed with opening the price bid and plans to reissue the tender with revised qualification criteria to encourage more competent bidders to participate.

This move aligns with the Indian government’s broader strategy to strengthen the country’s shipbuilding sector, as mentioned in the Union Budget. Finance Minister Nirmala Sitharaman announced the creation of a Rs 250 billion Maritime Development Fund and the extension of Basic Customs Duty exemptions on shipbuilding materials for another ten years starting from April 1, 2025. These initiatives aim to improve infrastructure, skill development, and technological innovation within the maritime industry.

The DPA had set a provisional reserve price of Rs 27,510 per acre per year for leasing the land, with the final price to be disclosed during the pre-bid clarification or before the technical bids were opened. The land lease was offered for a maximum period of 30 years without any renewal options, and bidders were required to offer a premium above the reserve price to secure the lease.

Currently, India accounts for less than 1 per cent of the global shipbuilding market but aims to be ranked among the top 10 by 2030 and within the top 5 by 2047. Establishing large-scale shipbuilding clusters is critical to reaching these goals, particularly as the global shipping industry anticipates the construction of over 50,000 ships in the next 30 years, driven by a transition toward green technologies aimed at reducing emissions.

News source: Urban Acres