MUMBAI, February 23: Weighed down by a whopping 300 per cent shipbreaking duty, highly volatile forex market and poor working conditions, the shipbreakers in the state are finding it difficult to keep afloat."Nearly 25 per cent of the shipbreakers have either gone bankrupt or are on the verge of closing their shutters", said president of Indian Shipbreakers Association Pratap C Bohra. According to him around Rs 16,000 crore domestic shipbreaking industry constituting 40 per cent of the world business, is in the doldrums with no concessions extended by the Indian government.
The 15 per cent countervailing duty (CVD) and the 10 per cent basic customs duty on import of ships places heavy burden on the shipbreaker, he said. Moreover, with no Modvat (modified value added tax) benefits available to the industry, the second-hand materials including steel scrap etc becomes costlier, Bohra said and added that as a result, the domestic sales of the shipbreakers receives quite a dent.
In Maharashtra, shipbreakershave to pay 300 per cent shipbreaking duty to the Mumbai Port Trust (MBPT). "The duty was increased from Rs 1/GRT/ day to Rs 3 per GRT/ day as the port wanted to discourage the industry", he said adding that no alternative arrangements were made to accommodate the existing shipbreakers.
In order to make accessible another site for shipbreaking in the state, the Mumbai-based Gaurav Mercantile Ltd (GML) has taken a lead. The company has already sought "in-principle" approval of the Maharashtra Maritime Board to set up a shipbreaking yard at Kalbadevi, 15 km from Ratnagiri, west coast of Maharashtra.
Kalbadevi is naturally sheltered from the southwest monsoon/northwestern winds. GML will be investing around Rs 15 crore in the project. Of this, Rs 5 crore will be through equity and the balance will be raised from financial institutions.
The yard, spread over an area of four km, will have facilities for the workers including warehouses, restrooms, canteen and officers besides possessing sophisticated yardmachinery consisting of vessel pulling machines, cutting equipment and material transportation and handling system.
According to Bohra, who is also a director at GML, feasibility studies have been forwarded to the state government while the final nod is awaited. The company is also in the process of obtaining no objection certificate from collector, controller of explosives, pollution control board and ministry of environment and forest.
The new site will not only provide an alternative to shipbreakers at MBPT but will also satiate the demand of steel-rollers in Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh, he said.
He felt that better working conditions at the new yard will not only set an example to other shipbreaking yards at Alang and Sosiya (in Gujarat) but will force the other state governments to provide concessions to the industry.
According to Bohra, shipbreakers at Alang who have been allotted plots cannot provide facilities or better equipment to the labourers as the land is leasedonly for 10 years. For a 3,000 tonne ship around 150-250 workers are employed to break the vessel in three months, he said adding that despite of all odds, Indian shipbreakers break around 400 ships annually.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
