Indian shipbreakers shy of upgrade plan for Alang on Japan nudge:

The Japan-backed ambitious $22-million plan of the Gujarat government to upgrade the Alang Ship Recycling Yard, which is the largest in Asia, has run into rough weather with recyclers finding the project environmentally and financially non-viable.

Alang Ship Recyclers Association has made it clear to the Gujarat Maritime Board that they are not in a position to go for the project that involves construction of a dry dock, improvement of existing plots and creating other facilities.

Recylcers say the upgrade plan may bring 30-odd more ships to Alang for dismantling, but it will also mean financial stress by way of increased debt, besides a new set of rules and regulations by International Maritime Organisation convention to contend with.

Though the proposed project will put Alang in competition with China, it will be more profitable for Japan than India, traders say. While it will put Japan in a better bargaining position in the international market, it will mean new regulations on ASRY, which is already functioning under guidelines of various agencies appointed by the Supreme Court, they say.

The project was proposed to Chief Minister Narendra Modi by a Japanese delegation comprising leading ship builders from Japan in February this year. The delegation had twice visited Alang in Bhavnagar district.

Located in Bay of Khambhat, Alang has an ideal environment for shipbreaking because of extreme high and low tides. An average of 425 ships are recycled here on annually on over 100 plots using a methodology called beaching.

Japan, which has 40 per cent share in global shipping industry, at present depends on China for recycling. It has offered to develop ASRY with the condition that it adopts dry dock method for breaking ships, as per guidelines of International Maritime Organisation convention held in Hong Kong.

There has been pressure on India, Pakistan and Bangladesh, the three countries that are major players in ship-breaking industry, to adhere to guidelines set by the IMO’s Hong Kong convention.

Shipbreakers at Alang are, however, not convinced. “Ships have been dismantled here using beaching method for 20 years. We already follow all the environment and pollution rules laid by the SC and there agencies monitoring the same,” says a letter of Alang Ship Recyclers Association letter to GMB. “There is no need to change the dismantling method to dry dock, which is very expensive,” the letter says.

“Though the Japanese government will fund the proposed $22-million project for technological upgrade for a dry dock, it will be a loan on the recyclers, which they will have to pay back in 15 to 20 years,” it adds.

Source: Indian Express. 01 May 2012

http://www.indianexpress.com/news/shipbreakers-shy-of-upgrade-plan-for-alang-on-japan-nudge/943894/