China has extended a scrap-and-build policy due to be
expired in 2015 by two years to 2017, according to the ministry of transport.
In a short statement announced on Tuesday, the
ministry said the policy has been extended to 31 December 2017, while the
content of the policy remains unchanged.
In late 2013, Beijing revealed this scrap-and-build
policy to subsidise owners who demolish their older vessels before their
operational expiry dates, and to build new, more energy efficient ships as a
replacement.
The policy was initially set to run until the end of
this year. A few state-owned shipping conglomerates such as China Cosco, China
Shipping Development Co (CSDC) and China Shipping Group have benefitted from
receiving the subsidies.
In March this year, Gao Yanming, chairman of Hebei
Ocean Shipping Co (Hosco) Group, had urged the government to extend for policy
deadline to end-2018, so as to prevent owners from adding on to the tonnage
supply.
The scrap-and-build policy states that a two-tranch
subsidiy scheme will be given to owners with the first tranch dished out upon
completing the demolition of an elderly vessel. The second tranch will be
handed out after an order confirmation for a new replacement vessel.
Gao had said that while the subsidy end date for the
ship demolition would work, the subsidy deadline for firming a newbuilding
order will only serve to magnify the existing oversupply problem.
The Beijing policy offers subsidy of RMB750 ($120)
per gross tonne for the recycled ship, and the same level of subsidy will apply
for the replacement newbuilding that must be built at Chinese yards.
The policy states that the total tonnage of the newly
ordered ships should not be less than the total tonnage of the vessels scrapped.
Shipowners can choose to tabulate their tonnage based on a cumulative basis
from all the scrapped vessels and newbuildings or on a one-for-one basis.
Source: seatrade-maritime. 23 June 2015
http://www.seatrade-maritime.com/news/asia/china-extends-deadline-on-ship-scrapping-and-newbuilding-subsidy-scheme.html
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