In the world’s biggest ship recycling centre on India’s Arabian Sea
coast, workers with blow torches cut segments of steel stripped from the
rusting hull of a towering cargo ship, sold for scrap by its Japanese owner.
But in Alang, a town located in Prime Minister Narendra Modi’s home state
of Gujarat, more than half of the ship-breaking yards have shut in the past two
years and the future of the trade in India and neighbours Bangladesh and
Pakistan is bleak.
The industry has been hit by a flood of cheap Chinese steel, and new
European Union environmental rules due later this year threaten to push
business to more modern yards in places like China and Turkey.
“Because the ships are coming in less numbers, and there is very poor
viability, in fact no viability. So now the ship is coming in one fourth number
of usually it comes. Earlier we were receiving around 30, 35 ships every month,
and these days 10 to 12 ships every month,” says Chintan Kalthia, whose company
R.L. Kalthia Ship Breaking Pvt Ltd runs one of Alang’s more modern yards. It is
currently breaking up the biggest ship in Alang, after months of negotiations
with its Japanese owner.
Ship breakers globally bought 25.2 million deadweight tonnes (dwt) of
vessels up to early July, against 33.8 million dwt all of last year, with
Bangladesh the largest buyer, according to shipping services firm Clarkson.
The ships sold to South Asian breakers, which control about 70 percent of
the market, are winched at high tide onto a beach, where they are taken apart
by mostly migrant labourers.
Equipment, such as radars, engines – and even tables and chairs are taken
off and sold. The steel from the hull is removed for scrap.
It takes up to nine months for a typical bulk carrier in India to be
broken up and its steel processed.
About 60,000 used to work in the yards with thousands more in spin-off
businesses, said yard owners.
But roads on the 11 km (7 mile) beach front which were once busy are now
quiet.
Due to a plunge in steel prices, ship owners are getting about $3.6
million less for the 25,000 tonnes of recoverable metal from a typical iron ore
or coal carrying ship than just eight months ago.
With China’s economy slowing, its steel exports soared 51 percent to a
record 93.78 million tonnes last year and are up nearly 30 percent in the first
five months of 2015.
The impact has been felt in Alang where the number of active yards fell
to 50 this year from more than 100 in 2014, according to the Ship Recycling
Industries Association India.
The number of vessels beached also dropped to a six-year low of 275 last
year and was only 54 in the last three months, it said.
“Unemployment ratio is going up so people have started going, and you can
see like earlier we used to work on at least 300 people in total used to work
on this plot, particular plot. Right now we have only 110. That is because of
the slowdown, our production capacity has gone down, so, of course, we have to
reduce and cut our costs,” said Nitesh Aggarwal, the owner of Baijnath Belaram
shipbreaking yard.
Workers employed by the shipbreakers are working as hard as they ever,
but the returns are worsening.
“Things are really bad. There is no work and whoever is lucky enough to
find work, he has to take a cut in his salary. If we don’t get work here then
how will we earn, how will we support our families and what will we eat?” said
Pyare Lal Gaur who has been working in Alang for six years.
“I am the sole earning member of my family. I have three children, a
wife, a mother and a father to support. If I will not work, then how will my
house run? It is like if the pillar of the house is weakened then how will it
support the ceiling? The house will collapse. So, you see so many people will
suffer if I lose my job,” said Jaipullah, another migrant worker employed by a
ship breaking company.
As well as facing pressure from cheap Chinese steel, there are also calls
to stop beach scrapping because of the danger and environmental damage from
pollutants left to drain into the sea.
Highlighting the risks, five people were killed and at least 10 injured
after an explosion in a chemical tanker being dismantled in Alang last year,
local media said.
Workers can also face health hazards such as lead paint and asbestos when
working on ships.
The European Commission will introduce tougher environmental controls
some time after December. While not specifically banning beach scrapping,
owners of ships registered in EU countries will have to scrap them at approved
facilities, a move that could favour countries such as China and Turkey where
ships are taken apart in docks.
In a bid to allay environmental concerns, some yards in South Asia have
cemented their work area to try to prevent seepage of oil or chemicals, but
many lack the money to do this.
Source: Hellenic shipping
news. 5 October 2015
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