Japan docks at Alang with Rs 100 crore investment

It is likely to dismantle most of its ships at the Gujarat yard.

Japan is all set to drop anchor at Alang-Sosiya, the world’s largest ship recycling yard in Gujarat, after lining up investments in the state for the Delhi-Mumbai Industrial Corridor (DMIC). It has signed a memorandum of understanding (MoU) for Rs 100 crore to upgrade the yard to international requirements by way of technology transfer and financial assistance under a private-public partnership (PPP). The modernised Alang yard will be ready by 2012-13.

“Japan and the Gujarat Maritime Board (GMB) have signed an MoU to upgrade the recycling yards, construct and operate a common hazardous waste removal pre-treatment facility, develop ways to add value to steel products with electric furnace (re-rolling mills and modernisation of recyclable goods market) and cultivate human resource capacity,” said an official of GMB, the regulator for non-major ports in Gujarat.

A consortium of the Japan government, the Japan External Trade Organization and the Japan Development Institute will do a feasibility study of the existing set-up and suggest upgradations. Alang dismantles about 250 ships every year and after upgradation this will go up to 350. Currently, the yard produces 3.5-4 million tonnes of iron annually from ship dismantling activities. Its turnover is an estimated Rs 5,000 crore.

“If all goes well, Japan will send most of its ships at the Indian yard for dismantling,” said sources. Japan owns 15-20 per cent of the ships in the world.

According to Pankaj Kumar, vice chairman & chief executive of GMB, it is a win-win situation for the stakeholders, including the governments of Gujarat and Japan, and agencies of ship recycling industries.

“The PPP model will be selected in such a manner that proper weightage is given, which will be acceptable to the stakeholders also,” said Kumar. He perceived that Alang would be the first largest ship recycling yard in the world with International Maritime Organisation (IMO) compliance, paving the way for fearless and environment-friendly atmosphere in ship recycling business. In the recent past, there has been talk of possible relocation of the yard, as one-third of it falls in the prescribed danger limit of a proposed nuclear plant at Mithi Virdi near Bhavnagar.

“According to Japanese representatives, the working conditions at Alang are very good. They will suggest enhancements of the procedures at the yard, as well intensify eco-friendly conditions in line with the IMO convention,” said Atul Sharma, technical environment engineer at GMB. “Japan aims to divert most of its vessels to Alang, as it is facing problems of dismantling them back home,” he added.

Through the PPP model, the state government expects Japan to also share the cost burden of hazardous material handling by the Japanese ship owners who would bring their vessels for dismantling.

The country, which was an official partner of the state for the Vibrant Gujarat summit in 2009, has also firmed plans to set up an “eco-town” project at Dahej for an estimated Rs 2,500-3,000 crore investment.