Ships built in India to get first right of refusal; ministry revises normshttps://indianexpress.com/article/cities/mumbai/ships-built-in-india-to-get-first-right-of-refusal-ministry-revises-norms-5591935/

Ships built in India to get first right of refusal; ministry revises norms

The revised guidelines laid down by the ministry also state that the RoFR would be exercised only in case the vessel being offered for charter by the lowest bidder has been built outside India and for any bidder to exercise RoFR, his bid should be within the Margin of Purchase Preference, which will be 20 per cent of lowest bidder.

Ships built in India to get first right of refusal; ministry revises norms
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 lowest bidder’s quote

THE SHIPPING ministry has revised its guidelines for chartering of ships by providing Right of First Refusal (RoFR) to ships built in India. The move, the ministry said in a statement on Monday, was aimed at encouraging ‘Make in India’ initiatives in the ship building industry.

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 lowest bidder’s quote, the statement said.

Union Minister for Shipping, Road Transport & Highways, Water Resources, River Development and Ganga Rejuvenation Nitin Gadkari was expected to launch the policy at the Regional Maritime Safety Conference in Mumbai on Tuesday. He was, however, unable to attend. Sanjay Bandopadhyaya, Additional Secretary (Shipping), said that the policy will be in effect from Tuesday.

Prior to the revision of the guidelines, the RoFR was reserved for Indian flag vessels as per the Merchant Shipping Act, 1958. The revised guidelines laid down by the ministry also state that the RoFR would be exercised only in case the vessel being offered for charter by the lowest bidder has been built outside India and for any bidder to exercise RoFR, his bid should be within the Margin of Purchase Preference, which will be 20 per cent of lowest bidder.

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Under its Shipbuilding Financial Assistance Policy (2016-2026), the shipping ministry had earmarked Rs 30 crore (2018-19) for providing financial assistance to all Indian shipyards, excluding defence shipyards. An amount of Rs 11.89 crore has already been disbursed to three shipyards, the ministry said in a statement. Bandopadhyaya said that the ministry will release data pertaining to disbursal soon.

The two-day conference that started on Tuesday is the first such organised by India. The conference is being coordinated by the Ministry of External Affairs, Ministry of Shipping and Ministry of Animal Husbandry, Dairy and Fisheries and National Maritime Foundation.