In a fresh push for Cochin Shipyard's plans to boost shipbuilding output, the Kerala government on Tuesday declared that it would lease 18.16 acres of land for the shipbuilder's upcoming ₹4,000 crore block fabrication facility (BFF).
Planned near the Vallarpadam International Container Transshipment Terminal back in 2025 itself, the construction of the BFF—which would manufacture steel blocks—a vital component in shipbuilding—is expected to improve the shipbuilder's existing supply chain.
This 18.16 acres of land will form a part of the original requirement of about 80 acres of land for the facility, with the Cochin Port Authority (CoPA) providing the remaining land, a CSL official told THE WEEK.
Finer details of the remainder of the land needed for the facility are yet to be decided, the official added.
Kerala CM V.D. Satheesan noted on Tuesday that the decision to lease land for the BFF at Ramanthuruth had been taken at a Cabinet meeting, for which the state government was to receive around ₹1.7 crore (including GST) as the annual lease.
"After this government came to power, we discussed it with Cochin Shipyard and took a decision quickly," he added about the long-pending project, as per a PTI report.
He also noted that the project was expected to create around 2,000 direct jobs, in addition to numerous indirect jobs as well.
The new BFF aims for a production rate of 1,20,000 metric tonnes per annum (MTPA), in comparison to the Kerala-based shipbuilder's existing plant, in which steel blocks can be produced at a rate of 20,000 MTPA.
The increased production would help the CSL build larger vessels like Suezmax tankers, container ships, and Capesize bulk carriers from its new dry dock.
A possible setback?
However, almost a year after a Letter of Intent (LoI) was inked for the project in 2025, an ET Infra report noted that South Korea's HD Hyundai Heavy Industries Co Ltd—the other half of the joint venture for the ₹4,000 crore BFF project—was considering an exit from the JV to focus on its $4 billion shipyard that will form a part of a planned greenfield shipbuilding cluster in Tuticorin.
"(Hyundai Heavy Industries) is not keen on the Kochi block fabrication facility and has almost decided not to participate in the joint venture. A final decision in this regard will be made in the next few days," it added, citing a source in the know.
The report also noted that the possible exit would notaffect Cochin Shipyard's important $360 million order from CMA CGM for six LNG-fuelled container ships of 1,700 TEUs each.
Notably, though the LNG ships will use Everllence engines, these will be built by HD Hyundai in South Korea—as per its agreement with the German company—before the ships are assembled in India.
HD Hyundai had also been contracted to provide technical support to CSL for the construction of these LNG ships.
NSM approval and support from the Centre
This comes after the CSL received in-principle approval from the National Shipbuilding Mission (NSM) for the brownfield expansion back in April, as a result of which the new block fabrication facility is eligible for financial support from the Centre.
This support will come from the Shipbuilding Development Scheme (SbDS), a key part of the Centre's comprehensive maritime package of ₹69,725 crore, launched in September 2025.
One of the stated aims of the SbDS, which has a corpus of ₹19,989 crore, is to expand and modernise existing brownfield shipyards by offering 25 per cent capital assistance.
Disbursements will be milestone-based and monitored by independent evaluation agencies.
