It
remains uncertain who will win the top spot in global shipbreaking this year,
experts say, pointing out that continuing legislation and court judgements in
South Asia will have a major impact on demolition profitability. Meanwhile, in
an attempt to assuage fears in Alang and to help Indian shipbreaking yards
compete better against a resurgent Bangladesh, the Ministry of Environment and
Forests (MoEF) has clarified the recent Supreme Court ruling in the country- a
judgement that had thrown the business into some disarray.
India
will face stiff competition from Bangladesh and Pakistan, analysts warn; the
falling Rupee has already hit profitability hard, even though Alang remains the
leading ship-recycling yard in the world catering to nearly 90% of Indian
demolition activity. The Indian industry has an estimated annual turnover of
about Rs 10,000 crore and directly or indirectly affects the livelihoods of
300,000 people. However, it has lost
almost a thousand crores this year because of cash deals- the prevalent custom-
in a depreciating Rupee scenario.
Meanwhile,
Bangladeshi shipbreaking activity- that was almost shut down last year- has
accelerated. Reports the well-known demolition newsletter, the GMS weekly,
"Bangladesh has indeed been the busiest market of the year so far, opening
fully again at the start of the year."
GMS
is still bullish on India. "Having been relatively quiet in the preceding
few months due to a struggling currency (which saw some end buyers lose about
20% of the value of their previous purchases), India is now enjoying its moment
in the spotlight as deals continue to be tucked away at vastly improved
numbers", it says.
The
July 30 Indian Supreme Court judgement apparently upholding the Basel
Convention- a treaty on the international movement of hazardous wastes,
including ship recycling- had caused some panic in Alang. The ruling said, “...
in all future cases of a similar nature, the concerned authorities shall
strictly comply with the norms laid down in the Basel Convention ... before
permitting entry of any vessel suspected to be carrying toxic and hazardous
material into Indian territorial waters.”
Some
buyers had stopped buying ships for scrapping after this ruling, fearing huge
losses if the ships were not allowed into India. They also feared that dead
vessels would have to be towed from other countries under the SC ruling.
They
should breathe easier now that the MoEF has stepped in to clarify the SC; it
has said that the SC's orders issued earlier- in 2007- still apply; these have
already been implemented in Alang and elsewhere and should pose no problems.
Some
shipbreakers are circumspect about the future, though. "We will have to
wait and see. Only after 3-4 months one can say whether India will be able to
keep the top title this year as well," said an Alang-based shipbreaker to
the Indian Express newspaper before the MoEF clarification.
Source:
Manu’s News. 6 September 2012
http://contemplatingsnot.blogspot.com/2012/09/as-race-hots-up-for-top-ship-breaking.html
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