20 August 2011

New era of growth beckons shipbreaking:

Chittagong ShipBreaking Yard
Shipbreaking is set to emerge as a multi-billion dollar sector, generating tens of thousands of new jobs, as the introduction of toxic management and natural beaching system draw more investment to the key recycling industry.

Bangladesh Ship Breakers Association said local scrap yards have imported more than 100 ships in the first 7 months of the year at a cost of over US$600 million after the High Court eased import regulations in March.

"This year, the country will import more than 200 ships weighing over a record 2.5 million tonnes. The import value of these ships will be around $1.25 billion dollars," said Salahuddin Ahmed, BSBA technical advisor.

Bangladesh imported nearly 200 scrap vessels weighing 2.2 million tonnes in 2009, making it the largest shipbreaking nation in the world, replacing reigning champions India.

But import sharply fell in 2010 disrupted by judicial activism as environmental groups took scrap-yards to court for dumping hazardous materials in the coast and exposing workers to toxic substances.

With their 2-year legal troubles nearing an end, Ahmed said investment in shipyards has picked up in recent month as new environmental and toxic management regulations have injected a fresh lease life to the industry.

"Majority of the shipyards have implemented environmental and toxic management guidelines including ways to dispose of asbestos, PCPS and oil sludge," he said.

"Industries ministry will formulate new guidelines for the shipbreaking industry by October in line with the order of the High Court. The guidelines will bring stable investment climate in the sector," he said.

In a ruling in March this year, the High Court relaxed import of scrap vessels provided that the scrap yards implement series of environmental and toxic material management regulations.

Industries Minister Dilip Barua said the country's shipbreaking industry will be a leading environmental-friendly recycling industry in the world once the government enacts new guidelines for the sector.

Mr Barua said the guidelines would drive out all the fears and controversies about the industry. "These fears will be removed by the next 2 years. The new guidelines will make the industry strong and sound."

Early this month, the minister took the local shipbreakers and officials to a tour to the Chinese shipbreaking industry in an effort to emulate their best environmental and work practices.

"The government is planning to use the experiences and ideas gained from China. The trip will help us formulate a policy for the fast growing industry," he told the FE.

The government has given shipbreaking the status of an industry in February this year as part of a long term plan to promote labour standards and safe toxic management.

The shipbreaking industry is the country's main source of iron and steel. Private re-rolling mills and steel mills melt the scraps dismantled from ships to produce mild steel rods, bars and angles.

There are now 120 shipbreaking yards based on the coastline of Sitakundu near the port city of Chittagong. According to BSBA, at least 64 shipyards have implemented sound toxic management ordered by the high court.

BSBA president Hefzatur Rahman said Bangladesh will dominate the global shipbreaking industry for many years to come, thanks to its natural advantages that its main competitor India or other countries don't have.

"6 to 7 metre high tide along the Sitakundu coast helps beach the large vessels straight to the shipyards. In India, the shipbreakers have to beach the vessels nearly a mile off the shore," he said.

"High tide and shape of the beach are the major advantages we enjoy over other shipbreaking nations," the BSBA President told the FE.

He said there is no scope to contaminate water through pollutants such as paints and iron parts as the ships are taken apart on the yards, not in water like the infamous Alang port in India.

Mr. Rahman accompanied the Industries Minister to China. But he is not sure whether the Chinese shipbreaking experiences will help Bangladesh.

"Chinese companies dismantle ships on dry-docks. It is not cost effective for Bangladesh," he said.

Ahmed echoed his president. "A dry-dock needs investment worth billions of taka. It needs thousands of experts, technicians and engineers which we don't have. Besides, dry-docks need huge maintenance cost."

The government should formulate the rules and regulations based on the country's perspective, he said adding the industries ministry should have its own strategy to promote the sector by ensuring green growth.

Source: The Financial Express. By Munira Munni. 19 August 2011 

No comments: