Alphard Maritime looks to set up a $500 Million Shipping Fund in IFSC GIFT City

 GIFT City is India’s first International Financial Services Centre. Alphard Maritime is among a dozen shipping companies that have opened a unit in the GIFT city to undertake ship leasing activities.

“We are trying to set up a $500 million fund in GIFT City with Rs 500 crore from our side and our associates will bring in about Rs 4,500 crores,” Capt Alok Kumar told in an event. The planned fund, according to Capt Alok, will support Indian fleet owners to buy assets in the range of $10-20 million. “Once the fund gets going, we are trying to be an enabler for Indian shipping tonnage,” he stated. With the Union government offering shipbuilding financial assistance to local shipyards to build ships, Alphard Maritime said that it was keen to “come from the very beginning” and support those looking to construct their ships in India.

Alphard Maritime is also keen on building some ships in India.

While the government is offering subsidy to build ships in India, it becomes a “little expensive” due to the incidence of the Goods and Services Tax (GST). Hence, fleet owners build ships outside India, faster and cheaper. To overcome this disadvantage, Capt Alok suggested that state-owned firms such as the Oil and Natural Gas Corporation Ltd (ONGC) should extend long-term contracts to ship owners while hiring offshore vessels that are used in supporting offshore oil drilling operations. “Instead of giving a three-year contract which is currently the norm, ONGC should give 10-15 years contract. I will build the vesselas per the specifications in India, we will bring in the money and do everything on the back of a long-term contract,” he quipped.

Capt Alok said that Chinese funded Vietnamese and Indonesians are currently doing business in India’s offshore vessel market by deploying older vessels that are brought in a few months before attaining the 21 years age norm set by the government for this category of ships to ply on the country’s coast.

“If you want Indian companies to come up, they should give 10-15 years contracts and insist that the vessels must be built in India,” he added.

Lauding the initiatives taken by the GIFT City to promote ship leasing including the single window clearance process, Capt Alok felt there was still “lot of room for improvement”.

Whatever methodology is chosen, the personnel should be hand-picked, who are forward thinking, enabling the business and making the business easy to do. Otherwise, the GIFT City should have its own team and pick 1-2 officers from the DG Shipping and train them in this process.

Capt Alok alluded to the passport issuing system followed by European countries whereby they have outsourced the task to a third-party service provider to improve the process. He also referred to the government’s decision to rope in an IT firm to facilitate and speed up the passport issuing process in India.

“It takes at least a month to get a ship cleared in India. In international jurisdictions, it takes two hours to get everything,” he stated.

He also advocated better “coordination” between the GIFT City officials and shore-based entities involved in import of ships to improve the process.

Alphard Maritime is of the view that economically and financially, it made sense to come through GIFT City for leasing ships due to a host of tax exemptions and holidays. “That’s why we have done it. Once a few more transactions take place, the initial problems will be sorted out,” he added.