Asia/Pacific News
Indian Shipping Companies Incurred Unnecessary Bunker Costs
A government report found that India's state-owned Shipping Corporation of India Ltd. (SCI) and Dredging Corporation of India (DCI) along with two major ports incurred unnecessary fuel costs and other avoidable expenses totalling Rs 490 crore ($90 million), the Economic Times of India reports.
DCI lost Rs 165 crore ($30.5 million) between 2007 and 2011 by failing to use good fuel purchase procedures, find competitively priced fuel, or otherwise minimise bunker costs, the audit found.
"These deficiencies indicate a lack of professional handling of fuel consumption issues," the report said.
The amount that could have been saved through proper procedures would have equalled 49 percent of the company's profit before taxes for those years, it said.
SCI, meanwhile, spent Rs 183 crore ($33.8 million) on "unfruitful expenditures," according to the report, including a 141.8 crore ($26.2 million) joint venture for chemical tanker operations that did not yield returns.
In its financial report for the quarter ended December 31, 2012, SCI said it lost LAKH 7,526 ($13.9 million) on revenues of LAKH 1 million ($1.8 billion).
An Indian shipping officials recently said the government should do more to support the shipping industry, including offering duty-free bunkers for coastal ships to encourage the movement of cargo by sea.
