The country's shipbreakers are still scared of importing old vessels despite an interim High Court (HC) order issued in favour of them, causing serious shortage of raw materials needed for a number of industries.
The HC bench on February 27 issued an order verbally saying ship import should not be stopped and sought suggestions from parties concerned to facilitate procurement of old scrap vessels, Bangladesh ShipBreaking Association (BSBA) said.
"We're yet to get any official copy of HC order. If the HC gives favourable terms and conditions, then we will begin procuring old vessels," senior consultant of BSBA Captain Anam Chowdhury told the FE Friday.
BSBA sources said the HC is expected to issue the official copy of the verdict immediately.
The old ships are the major sources of raw materials for building of inland vessels, mild steel rod and light engineering equipment.
Nearly 90 per cent of inland ship making plants use plates of old vessels. Besides, MS rod manufacturing and light engineering also consume a major portion of scraps.
According to a study, 29 sectors consume iron and other matters of old ships, BSBA said.
Syeda Rizwana Hassan, director of BELA (Bangladesh Environmental Lawyers Association), told the FE: "I am yet to get the official copy. I am expecting that the HC order will incorporate conditions to import old vessels."
She also said: "If the conditions are hard to comply with, then the order will not be in favour of the ship breakers."
The Prime Minister has recently announced shipbreaking as an industry under the ministry of industries, considering its importance in the economy.
The shipbreaking sector has been facing hurdles over import of old vessels since 2009 due to legal issues which have caused reduction in their imports.
The country's 72 shipbreaking yards had imported 175 ships weighing 2.2 million tonnes of iron plates in 2009.
The imports dropped significantly in 2010. The shipbreakers imported only 1.3 million tonnes of iron plates last year.
M Ragman, chairman of Ratanpur Ship Recycling Industry, said: "I've reduced the number of ship imports since 2009."
He said the shipbreaking yards are almost empty now.
Another BSBA consultant said nearly 30 old ships imported earlier are now awaiting dismantling.
Md Ali, president of Bangladesh Re-rolling Mills Association, said the prices of ship plates have been surging sharply over the past few months.
"Our cost of production has increased significantly due to the rise in the price of ship plates."
The price of each tonne of ship scrap now ranges between Tk 42,000 and Tk 43,000 against Tk 28,000-Tk 30,000 earlier.
Sitakundu in Chittagong emerged as the world's largest shipbreaking destination as Bangladeshi importers had beaten their competitors in India and Pakistan
The other leading players in shipbreaking are Turkey and China
The active shipbreaking yards in Sitakundu, 20 kilometres north of the port city Chittagong
Source: Financial Express. By Jasim Uddin Haroon. Saturday March 19 2011
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