The power arm of the Tata group, Tata Power has announced that it is thinking of entering into the shipping business soon. The officials of the company informed that Tata Power is going to invest an amount of $500 million through its Singapore-based special purpose vehicle, TPC Energy Asia, for the purpose. The officials added that the company is planning to prepare a fleet of nine vessels for transporting coal from Indonesia to its plants located in the western coast of India.
Confirming the news, the Executive Director of Tata Power, Mr. S Ramakrishnan said that the company has already signed charter agreements for three ships. He added, "We are planning to buy some ships. Totally, we need nine. Whatever we dont get (through charter agreements), we will buy. I wont be surprised if we own about 4-5 ships". He also said that Tata Power is planning to buy ships worth up to $100 million each, at the moment. The analysts from the market have stated that the India-bound freight rates are likely to be firm, as the companies like Vedanta, Reliance Power and other ultra mega power projects begin shipment of coal. They said that not only the prospect of high rates is weighing on the minds of power producers, but also the possibility that ships too may not be available.
Informing that Tata Power is likely to consider commercial use of the spare ship capacity later. Mr. Ramakrishnan said, "At the moment, we are focusing on our own requirements. There may be some months where we have excess capacity...at that time, we will see how to synergize with other companies, including group companies". The market analysts are saying that there is possibility for Tata Power to use its shipping fleet for providing services to its arm importing coal or ore and exporting finished goods. Mr. Ramakrishnan added that the company is going to continue to focus on the core areas and is willing to restructure its arms and make them self-sustained and profit-making entities, in the neat future.
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| Posted : 5/9/2008 |
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