Shipping Corp of India (SCI) was previously looking at joint ventures with domestic state-owned companies to wriggle out of its financial mess.

Partnerships with Coal India, Oil & Natural Gas Corp (ONGC) and Steel Authority of India (SAIL) were expected to provide long-term employment support and steady cash flow.

But company chairman and managing director Arun Kumar Gupta says it no longer has any such plans as charterers are not keen to set up alliances at a time of low freight rates and excess tonnage supply.

SCI set up a joint venture with SAIL in 2010 and floated a tender for one 155,000-dwt bulker newbuilding. But the tender was later scrapped and the joint venture was called off last year.

Gupta says freight rates are so low that no cargo owner wants to team up with a shipowner right now.

“As a cargo owner, SAIL is safeguarding its interests,” he told TradeWinds.

In the 2007/2008 boom, rates were so high that SAIL readily agreed to a long-term alliance to hedge against future rate rises. But the times have now changed, Gupta says.

Long-term contracts, of course, are better as they provide protection against unexpected shocks, give stable income and employment but Gupta insists SCI would never go into a joint venture that was not in its best interests.

Last year, the company also dissolved its five-year-old joint venture — SCI Forbes — in chemical tankers with the Shapoorji Pallonji group after declining freight rates sparked huge financial losses.

Gupta says SCI came under severe pressure. “We had to pull out of the joint venture as we could not sustain the losses,” he said.

The company also dropped a proposed joint venture with ONGC following tax hurdles and its inability to inject funds into the project given its financial losses.

Gupta does not go into detail on the former point, saying only that “placing our offshore fleet as equity into the proposed venture raised taxation issues”.

Meanwhile, SCI is now looking to sell its entire 49% stake in now defunct Irano Hind Shipping to joint-venture partner Islamic Republic of Iran Shipping Lines (IRISL). This is expected to generate nearly $100m, which should help to stabilise the company’s finances. (See also Irano Hind, page 7.)