Ship breaking: A wealth creator
In an exclusive, Union Minister of State (I/C) for Shipping, Mansukh L Mandaviya discusses the impetus to India’s ship breaking industry following the recent legislation
The Recycling of Ships Bill, 2019, which has been passed by both the Houses of the Parliament, lays out rules for existing facilities and is applicable to all ships registered in India or entering Indian waters, apart from warships and other government ships. The ships should not have hazardous material, for which a national authority would be created to carry out checks. In an exclusive interview, Union Minister of State (I/C) for Shipping Mansukh L Mandaviya tells Millennium Post that passage of the bill will give a boost to ship breaking industry resulting in employment generation. Excerpts:
Q: Congratulations on the passage of the Recycling of Ships Bill, 2019 from both the Houses of Parliament. The passage of the bill will pave the way for a safer environment in which ships are recycled in India. How do you see this?
A: It's a great development for ship recycling industry as ship recycling is a very big industry in India as well as in the world. As per records, there are about 53,000 merchant ships, while 5,000 to 6,000 navy ships across the globe and about 1,000 ships go for the breaking every year. The ship breaking share of India is 30 per cent which means 300 ships per year. As the industry is totally labour-centric, so the passage of the bill is a very historic decision.
Workers belonging to the states of West Bengal, Bihar, Odisha, Uttar Pradesh, Chhattisgarh, Jharkhand, etc., are working in Gujarat in the ship breaking industry. The ship breaking industry helps in the development of downstream industries such as the establishment of re-rolling mills. Along with the ship breaking industry, there are other industries flourishing such as the furniture industry, electrical spare parts, etc. The furniture of Alang ship breaking yard is very high in demand because of its fine quality. Similarly, steel of the dismantled ships is also in demand due to its superior quality.
Interestingly, the ship breaking industry is providing 10 per cent of the total domestic steel demand and the country is getting 10 per cent best quality steel from Alang shipyard.
You will be surprised to know that when the bill was brought into the Parliament, several MPs had objected this bill saying that it will allow India to become the dumping ground for hazardous waste, but I explained every MP about its futuristic benefits, all the amendments moved by them were withdrawn. I explained MPs and House that it's not hazardous waste rather ship breaking is a wealth creator. The Bill is being given the name recycling as 90 per cent of the parts of the ship are reused.
We are blessed with a natural opportunity for ship breaking, which is not the case with other countries as the wave current of the sea at Alang ship breaking yard is very suitable. The Alang shipyard is situated in Bhavnagar district of Gujarat and spread over 11,000 kms. At present, there are 134 spots dedicated for shipbreaking at Alang shipyard. The workers at Alang are so experienced that they need just 60 days to dismantle any big ship. The other interesting fact associated with this ship breaking industry is that there is a minimum price depreciation of a ship even after it gets dismantled as a ship worth Rs 200 crore would be worth Rs 150 crore after it gets broken down in parts.
Q: What are the challenges that you have faced or would face in handling the affairs of the shipping industry?
A: There are several challenges associated with this industry, but since I hail from the coastal area, so I don't find any challenge in handling the affairs of the shipping industry. The coastal line of Gujarat is spread over 16,000 kms, which is a great advantage for the state. I'm aware of the behavioural patterns of the sea and have the exposure of the shipping industry. When I took the charge of this ministry, I focused on creating facilities for ship breaking, promotion of cruise tourism, development of inland waterways by taking advantage of coastal shipping.
Q: What's the role of shipping in the development of India?
A: The shipping industry can play a phenomenon role in the overall development of India. There are reasons for it as road and railways traffic is heavily congested. So, the inland waterways have the potential to emerge as an alternative transportation system for logistics. We have to utilise the 60,500 coastal lines for transportation and inland waterways. The transportation system based on inland waterways would bring down the logistics cost. At present, the logistic cost gap of India is 5 per cent as the world's average logistic cost is 9 per cent, while India's logistics cost is 14 per cent of the GDP.
We have set a target to bring down the logistic cost gap from existing 5 per cent to 1.5 per cent or 2 per cent in the next five years, which will give a boost to export and it would get increased by 20 per cent in the next five years. I'm very confident that we would achieve this target within the stipulated time. The focus is on increasing the coastal and waterways shipping that will help in bringing down the logistics cost.
Q: Tell us about the achievements of the ministry in inland waterways development?
A: Following the guidelines of Prime Minister Narendra Modi, we have focused on the comprehensive development of inland waterways in the coming years. The focus of the ministry is on creating facilities for cargo and public transportation and providing all-round connectivity in the North-Eastern states. The North-Eastern states have road, air and railways connectivity but there is limited waterways connectivity. We have signed an agreement with Bangladesh to allow transhipment of Indian goods via Chittagong and Mongla seaports without charging customs duties and transit fees.
It will help in the transportation of shipments in different parts of the northeast using the waterways. The inland waterways transportation will open floodgates for northeast farmers involved in organic farming. The states of Mizoram, Nagaland, Meghalaya, Arunachal Pradesh, Sikkim, Manipur and Assam are champion in organic farming.
The waterways, starting from Varanasi to Haldia (1,600 km), Haldia to Sundarbans (200 km), Brahmputra to Bangladesh (800 km) have been developed. In total, inland waterways of 4,000 km have already developed.
The inland waterways will also prove a great success story in promoting tourism in the North-Eastern states. At present, 12 cruise services are in operation, covering tourist destination of Rhino Park in Assam to Haldia traversing through Sunderbans and finally reaching Varanasi.
Our inland waterways have also benefitted BIMSTEC countries, situated in the proximity of the Bay of Bengal. Shipment facility has been provided to Nepal at Sahebganj in Jharkhand, which is just 100 km away. Apart from Sahebganj, we have also given access of Kalughat and Varanasi ports to Nepal.
Using Indian waterways, Bangladesh has also started transporting stone aggregates from Bhutan, which brought the cargo through road till Dhubri and from there the cargo sailed from Dhubri in Assam and travelled to Narayangarh in Bangladesh over the river Brahmputra. The stone aggregates were transported by trucks from Phuentsholing in Bhutan which is 160 kms from inland waterway's Dhubri jetty in Assam. Earlier, Bhutan was exporting stone aggregates to Bangladesh through the land route. The development is a very historic one as it takes forward Prime Minister Narendra Modi's vision to promote cargo transportation through inland waterways.
Q: Any impact of economic slowdown on major ports?
A: Overall, there is no effect on ports as such, but on some ports, there is some visible impact which is negligible. Since we are the government, so we act as a facilitator. We are on a mission to create better infrastructure and outsource it to private players on a revenue-sharing basis. To remain in the competition, we have mechanised our 240 berths and out the total 240 cargo berths operating at major ports (Union government-owned), 74 berths have been outsourced to private players that will bring new technologies and increase the business. More business means more revenue to the government through revenue sharing.
We have also developed industrial clusters on the basis of the potential of ports. At Kandla Port, we have developed Furniture Park. Similarly, at Kolkata Port, we are developing tea park, at New Mangalore Port we are developing the dedicated park for oil tanks. We have also developed cruise terminal at Mumbai Port and river cruise pavilion at Kolkata Port.
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