Dredging Outlook: DCI continues to make significant progress

The Indian dredging market is driven largely by the trade segment, with dredging de­mand coming from major and non-ma­jor ports. At present, the annual dredging market in India for major ports is estimated to be approximately 80 million cubic metres (MCM), and the total dredging market stands at about 121 MCM Indian ports are gearing th­em­selves up to handle more cargo by acco­m­mo­­dating deep draft vessels, and aspire to me­et international port infrastructure standards in order to achieve economies of scale. As a re­sult, ports are taking measures to improve ba­sic infrastructure such as deepening and wide­ning channels, creating new dock arms, and implementing automation.

History of DCI

The Dredging Corporation of India (DCI) was formed in 1976 to provide dredging services to major ports in India. It became a public company listed on the Bombay Stock Exchange as well as the Kolkata Stock Exchange in 1992, and the first disinvestment took place in the same year. DCI also received Mini Ratna status as a public sector utility in 1999. Subsequently, in 2004, it was listed on the National Stock Exchange, and in the same year it disinvested about 20 per cent stake. In 2015, the third disinvestment took place, with the sale of 5 per cent stake. In 2016, 0.09 per cent stake was sold to employees. A major change took place in 2019, when a strategic share of 73.47 per cent in the company was taken up by the major ports – Vishakhapatnam Port Trust (19.47 per ce­­nt), Jawaharlal Nehru Port Trust (18 per ce­nt), Paradip Port Trust (18 per cent) and Deen­dayal Port Trust (18 per cent), with the share of financial institutions and the public being about 26.53 per cent.

DCI is headquartered in Visakhapat­n­am and has regional offices in Mumbai, Kol­kata, Pradip and Cochin. The business portfolio of DCI includes maintenance dredging, capital dredging, beach nourishment, land reclamation, project management consultancy, sand mining and inland dredging.

Fleet and equipment of DCI

DCI’s fleet and equipment includes 10 trailing suction hopper dredgers (TSHDs), one cutter suction dredger, one backhoe dumb (non-propelled) dredger, one inland cutter suction dred­ger and auxiliary craft to assist the main fleet. The dredgers have a maximum dredging depth of about 25 metres, with the deepest one having 8.5 cubic metres of capacity, and the highest one about 7,500 cubic metres. Of these 10 dredgers, seven have short pumping facilities that can pump up to 2.5 km.

DCI, with its hopper capacity of 59,000 cubic metres, can dredge up to 65 million cu­bic metres per annum. In order to meet the balance market requirement, it is currently partially outsourcing work. It plans to eventually au­gment its capacity enough to meet the entire demand on its own. The Ministry of Ports, Ship­ping and Waterways granted approval to DCI for procuring three TSHDs with 12,000 cubic metre hopper capacity – the first in 2021, the second in 2023 and the third in 2026. Work on the first TSHD is currently at an advanced sta­ge. It is to be built at Cochin Shipyard Limit­ed under the Make in India and Atmanirbhar Bha­rat initiatives. This is not only the first 12,000 cubic metre hopper capacity TSHD being built in an Indian yard, but also the world’s first Bea­gle-12 series dredger.

Contracting practices

Contracting practices have evolved over the past decade. Till 2004, all ports, with the exception of Kolkata, could issue tenders or engage in negotiations with DCI for executing projects on a nomination basis. Preference was given to DCI if bids were requested. All ports besides Kol­­kata were permitted to issue tenders bet­ween 2004 and 2007, and DCI was given a 10 per cent priority over the lowest technically co­m­petent bidder. All significant ports, with the exception of Kolkata, could issue tenders between 2007 and 2015, and Indian companies using Indian flag dredgers could offer bids up to 10 per cent greater than the lowest am­ount, as well as exercise their right to reject. All ports could issue open requests for proposal for capital and maintenance dredging projects from 2015 through 2021.

After the introduction of dredging rules in 2021, the promoter ports of DCI are now permitted, with the consent of the board, to award their dredging works to DCI on nomination ba­sis. Currently, DCI has four promoter ports – the Jawaharlal Nehru Port Authority, Vishakha­pat­nam Port Authority, Paradip Port Authority and Kandla Port Authority.

Key developments

At present, DCI is catering to 10 of the 12 major ports. Three dredges have been deploy­ed at Syama Prasad Mookerjee (SMP) Port – dredges 12, 14 and 21. These are shallow dr­ed­ge vessels, with a minimum draft of about 3.5 metres. They were designed for Haldia, and are always deployed at SMP Port. Two dred­g­ers, 15 and 16, are in use at Paradip Port for maintenance dredging operations.

DCI and Cochin Shipyard Limited signed an MoU in February 2021. DCI has deployed two vessels there – one with a capacity of 7,500 cubic metres, and another with approximately 5,500 cubic metres of capacity. DCI is also carrying out reclamation work for Numa­ligarh Refinery Limited at Paradip port. The governments of Kerala and Rajasthan are in discussions with DCI over desalination works. DCI has also sig­ned an MoU with the National Highways Autho­rity of India for the supply of sand to the latter. Recently, DCI signed an MoU with Gujarat Fish­eries and intends to sign another with Kerala Fisheries. It has plans of expanding to fishing harbours and lagoons for dredging works.

Plans ahead

Going forward, DCI aims to strengthen its core business, maintenance dredging. Efforts are also being made to modify new dredges in order to capture the maximum share in maintenance dredging. The company intends to reduce weight and enhance dredger capacity. Further, it plans to increase competency in capital dredging wor­ks, and expand into inland dredging. Additio­nally, a dredging institute will be developed to create a talent pool of dredging experts.

The development of new greenfield ports will drive the demand for dredging in the domestic market. Paradip is also coming up with new dock arms, which will be operational soon. Me­an­while, the Andhra Pradesh Maritime Board plans to develop three ports – Ramayapatnam, Bha­vanapadu and Machilipatnam.

Based on inputs from Captain S. Divakar, MD & CEO, DCI, at a recent India Infrastructure Conference