Recycle industry at verge of bankruptcy as shipments stuck at ports, charges build up

Kutch-based Gyan Singhvi is at the brink of bankruptcy and so are thousands of other importers and traders who are dependent on once-thriving material recycling industry that employs about 25 lakh people directly and indirectly.

With dreams shattered, they are staring at a huge financial crisis with dimming hopes of a revival from coronavirus-induced lockdown.

Around 100 containers of scrap metal imported by Singhvi are lying at Gujarat's Mundra Port for want of clearances due to the lockdown imposed to contain the new coronavirus infection. Around 2.5 lakh such containers are lying at various ports of the country waiting for clearances ever since the lockdown began.

"My scrap imported from Europe and Singapore is worth about Rs 5 crore and with duties, it comes to Rs 6 crore.

"Now I have been slapped with demands worth Rs 5 lakh per day as charges from the container freight station (CFS) and shipping lines besides lakhs of rupees pertaining to other charges for flouting norms...The situation is such that I along with others are at the brink of bankruptcy," Singhvi told PTI over the phone.

About 20 workers and their families dependent on him are staring at starvation, said Singhvi.

Sanjay Mehta, the President of Material Recycling Association of India (MRAI), told PTI that about 10,000 recycling units in the country sustaining the livelihood of 25 lakh people directly or indirectly are at the verge of closure despite relief measures announced by the government.

The government issued an order for the waiver of rent and other charges but shipping lines and container freight stations (CFS) are openly flouting the order, Mehta alleged.

He cautioned that if the government failed to take immediate steps this would result in huge NPAs to banks.

Around 25 lakh people are dependent on the recycling industry based on paper, steel, aluminium, copper, brass, zinc and lead imported as scrap, Mehta said.

"About 2.5 lakh containers are lying at India's ports for clearances...In the extraordinary situation, delays are happening in procuring papers from banks, courier and other formalities but the shipping lines and CFS have refused to waive levies despite clear-cut orders from the Ministry of Finance and the Ministry of Shipping.

"The government orders are being flouted and huge levies are being charged but everyone has turned a blind eye to our problems."
The MRAI also said if no intervention is made Indian importers will lose "more than Rs 80,000 crore in detention/demurrage charges to the lines which are foreign entities."