During the year to date, India had reported around 229 vessels, while Bangladesh 49 units, according to Piraeus
It said India China
"India had a very good year so far and it is expected to continue for some more time," said a leading shipbreaker based out of Alang, Gujarat . But, according to him, most of the existing players in the Gujarat Maritime Board (GMB)-managed yards at Alang-Sisoya are a worried lot due to the apprehension of an impending policy announcement from the authority.
According to him, who spoke on condition of anonymity, GMB is expected to come out with its policy of renting out its breaking yards, which was pending for the last 2 years. Existing license holders fear that the rentals for the plot could sky rocket, given the recent example of the e-auctioning of 3 plots by GMB.
According to another member of Ship Recycling Industry Association (SRIA), Alang, recently GMB has e-auctioned 3 plots for approximately Rs 73 crore. Instead of the prevailing rental of Rs 200 per sq mt per year, these plots attracted a huge premium for GMB. Earlier, such an auction would have fetched the authority about Rs 7 crore, opined another member.
According to Pravin Nagarsheth, president of Iron Steel Scrap & Shipbreakers' Association of India, the high rates were due to the fact that none of the existing players are permitted to sell the plots as they are non-transferable.
"One would understand the significance of the premium when one realizes that the license is valid only for five years and not for long term," he said.
Another SRIA member opined that GMB should have allowed existing smaller plot holders to participate in the auction so that they could have made their plots bigger, thereby helping them and the authority to observe various mandatory regulations in place for better upkeep of the yards with ease.
"Even though GMB is collecting the levy as developmental charges, the question is whether the authority is really using it for the same," asked another member.
Given such high premiums, Mr Nagarsheth opines that, it would be very difficult for shipbreakers to operate their facilities profitably.
What many of the existing players at Alang fear is that if GMB upwardly revises its rates they will have to shell out a huge amount in arrears for the last 2 years. Besides, such a move could hit them as they have to make more provisions as operational expenditure.
Of the 160 plots under the GMB-controlled shipbreaking facility, only 120 are currently operational.
"An increase in rates could spoil Indian chances of becoming the premier country of shipbreaking in the world. As such we are maintaining the current status thanks to the large number of freezer vessels that India
Industry Posts 219% Growth During H1:
World-wide ship demolition figures has reported an impressive 219% increase in the first 6 months of the year, compared to the same period of 2010.
According to Golden Destiny, during the first half of the year 400 vessels in total have been reported for scrapping at a total deadweight of about 18.3 million of tonnes with bulks and liners being the most popular scrap candidates. It said activities in the tanker and container segments have been subdued as there has been a sharp fall of 50% and 77%, respectively, from the first half of 2010.
Source: Hellenic Shipping News. (Sourced from Economic Times India
Tuesday, 02 August 2011
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