Back in business

Alang shipbreakers get a new lease of life

Published: Sunday 30 April 2006

the Union finance minister's (fm's) announcement to restore a five per cent custom duty on the import of steel scrap for melting has given some hope to shipbreakers. The announcement has come at a time when the ailing shipbreaking industry in Alang was striving to get over the setback of the return of French warship Le Clemenceau.

Levying custom duty on melting scrap is going to make its import costlier. This will force the steel re-rolling mills to eye the shipbreaking industry for scrap at a cheaper rate, giving the shipbreakers a competitive edge in the scrap business," says Vipin Aggarwal, a leading shipbreaker and secretary of shipbreakers' association. There are about 25 steel re-rolling mills in Bhavnagar and Sihor, with a daily production capacity of around 300 tonnes of steel. "With the decrease in number of ships coming to Alang, these mills had turned to melting scrap imported at the Kandla port," says Mukesh Patel, owner of the Shree Ram group, which is into both shipbreaking and re-rolling industries. And at Alang, it seems fm's announcement has already made an impact. "Ten ships have arrived at the port in the first fortnight of March 2006 and 15 others are expected to arrive by mid April," says Mehul Mehta, director of mcc Shipping Supply and Services Private Limited.

If the trend continues, the shipbreaking yard will get around 250 ships in the current year -- more than double of what it got in 2005-2006 -- and the port would again become one of the largest shipbreaking yards in the world," says an official of the Gujarat Maritime Board, Alang. The yard has been on steady decline since 2004 due to severe competition from those importing melting scrap, besides due to the emergence of shipbreaking markets in China and Bangladesh.

Meanwhile, the Central Pollution Control Board has set guidelines for the shipbreaking industry, which will now place the onus of verification and certification of all the incoming ships on the customs departments and the state maritime boards. The guidelines mandate these agencies to certify hazardousness of the decommissioned ships that arrive at the ports for dismantling. The guidelines will help diminish differences between the classifications of hazardous wastes as under the Indian domestic laws and the Basel Convention.

It also directs the shipbreaking industry to draft a comprehensive environment management plan towards the disposal of wastes, and air and noise pollution. The state pollution control boards will subsequently monitor the plan. In the face of the recent accidents at the shipbreaking yards, the guidelines have mandated the industry to prepare a disaster management plan. Under this, the industry will sign a memoranda of understanding with the state maritime boards to put down guidelines for labour safety and precaution during the process of dismantling.

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