(TH)
IOC has hired a foreign flagged very large crude carrier (VLCC) at a day rate of $31,950 for seven years. This has upsetting the calculations of the Government to use such long-term contracts to help India expand its shipping capacity to haul more oil cargoes for strategic reasons.
Earlier this year, IOC had called for bids to hire a ten-year old oil super tanker for a firm period of five years with two extensions of one year each. This was the first of such experiments brokered by the shipping and oil ministries.The move followed intense lobbying by the local shipping groups which said that long-term contracts would facilitate funding at better rates to buy ships.
Local fleet owners participating in the tender were given a so-called ‘right of first refusal’ to match the rate and take the contract if the lowest quotation was offered by a foreign owner.The VLCC had to be fit with scrubbers when it begins the seven-year contract from January 2020, to comply with a global rule framed by the International Maritime Organization (IMO).
