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Indian ship-breaking industry losing out to neighbours

Press Trust Of India  |  Alang (Gujarat) 

Hit by hefty custom and excise duties and other taxes, Alang and Sosiya ship breaking yards, considered to be among the biggest in the world, are fast losing out business to Bangladesh, Pakistan and China.
The ship breaking yard comprises a total of 173 plots along necklace shaped beach of Alang, which has been leased out by the Gujarat Maritime Board, the controlling authority of the ship-breakers.
Since the yard started functioning in 1983, more than 4,000 vessels have been dismantled here representing over 27 million LDT (light displacement tonnage""the net weight used to calculate scrap value). In the 1990's the yard accounted for 90 per cent of the total ships broken in the world.
However, now the number of ships coming to the yard has drastically come down mainly due to heavy duties levied and also, partly, due to frequent protests by environmental groups who have been opposing the entry of the asbestos laden ships in the Indian shores, according to ship-breakers.
While Alang is gasping for survival, it is Bangladesh Pakistan and China which are emerging as major ship breaking and recycling yards.
"If this trend is not reversed then the day is not far when the ship-breakers will be forced to completely close down their business, rendering a large number of people jobless," said of Shriram Vessel and Scrap Pvt Ltd , the company which has purchased the controversial decommissioned French aircraft carrier Clemenceau.
A major concern for the ship breakers is the fact that they have to pay five per cent custom duty and 16 per cent excise duty which is quite high as compared to the duties levied in other countries such as Bangladesh, Pakistan and China.
M Shah, a ship breaker, said, "Another problem that is plaguing the industry is the inordinate delay of getting the ships cleared by the Gujarat Pollution Control Board (GPCB) after they have been purchased by the ship.
A spokesman of the Gujarat Maritime Board, meanwhile, said the GMB had sent a draft proposal to the government to take various measures to save the ship breaking industry by reducing custom duty and other charges.
Sanjay Shah, director of MCC Shipping and Supply Services Pvt Ltd at Alang, said, "This region, which falls in Bhavnagar district of Gujarat, has only two main industries""diamond polishing industries and ship-breaking industries. But now both are in doldrums. While the diamond polishing units have shifted mainly to Surat, the ship-breaking industries are facing the onslaught of steep duties and opposition from the environmental NGOs".
"The shipping companies are not ready to send ships to India for breaking which is gradually affecting the economy of this region and the people living here," said Shah.
As a result a number of steel rolling mills, foundries, scrap shops and many other industries that survive on ship scrap as raw material are suffering. "It is the mega steel companies which are out to destroy the Alang ship breaking yards by funding the environmental NGO's," Patel alleged.
Samvardhan Trust, an NGO coming out in support of the ship breakers, said "preserving the environment is one thing, but spelling death-knell for the ship-breaking yards of Alang by opposing ships here is another."
A trustee of the NGO, Yashodhar Bhatt, said, "We appeal to all sections of society like academicians, scientists, leaders in the field of industries and agriculture and government to come forward to save the dying ship breaking industries of Gujarat".


First Published: Thu, February 09 2006. 00:00 IST