Asia’s biggest ship recycling yard witnessing antithetical situation

Asia’s biggest ship recycling yard witnessing antithetical situation

15 May    Finance News

By Nayan Dave

Asia’s biggest ship recycling yard situated at Alang on the western coast of Gujarat is witnessing an antithetical situation as ship breakers here have dismantled higher numbers of ships during the year 2021-22, but they could handle nearly 3.5 lakh less tonnage compared to previous year.

As per the data of Gujarat Maritime Board (GMB), a regulating authority for the Alang ship recycling yard, 209 ships were dismantled at Alang compared to 187 ships during the previous year 2020-21. However, the yard handled 14.11 lakh light displacement tonnage (LDT) during the year compared to 17.60 lakh LDT (weight of the ship without cargo, fuel, passengers and crew).

When contacted a senior official with the GMB said that due to arrival of smaller ships, Alang yard witnessed reduction in LDT. Moreover, dismantling activities came to standstill at Alang in for almost four months due to shortage of oxygen and transporters strike, said the official adding, “recycling units at the ship recycling yard remained closed from April to first week of June last year following the second COVID wave across Gujarat. Operations at ship recycling units were shut as oxygen supply was diverted for medical purposes. It is impossible to cut heavy metal used in vessels without oxygen. Again, in August, recycling activities were hampered for nearly a month due to transporters’’ strike.”

Haresh Parmar, secretary of Ship Recycling Industries Association of India (SRIA) blames GMB for dismal performance saying that the regulating authority has increased rental by three times at a time when the Central government announced to double the capacity of Alang ship recycling yard by the end of year 2024.

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“Ship recyclers in Alang have to adhere to stricter safety and pollution norms compared to similar recycling yards in neighbouring Pakistan and Bangladesh. Hence, we are not able to buy ships coming for dismantling at higher cost. Secondly, Alang yard still does not fully comply with the European Union’s (EU) regulations related to hazardous waste management and workers’ safety.  As a result, ships belonging to the EU go to Turkey and China based recycling yards,” says Parmar.

Due to this tricky situation, bigger ships didn’t come to Alang and were diverted to either Pakistan or Bangladesh, he said adding that the state as well as central government need to reduce rental and import duty till Alang yard become fully compliant with the EU regulations to make them competitive against their counterparts in neighbouring countries.

According to him, in October this year a high-level team from EU is coming to Alang for auditing for treatment storage and disposal facility (TSDF), state-of-the-art hospital for workers etc.  “We can have sizable numbers of bigger ships every year once Alang would comply with EU regulations,” says Mukesh Patel, a leading ship recycler.

Situated nearly 55 km from Bhavnagar, Alang yard has more than 150 recycling units which are providing direct employment to over 20,000 workers. Most of them are migrants from states like Odisha, Uttar Pradesh, Bihar and Andhra Pradesh.

In the 2021 Union budget the Finance Minister had announced a provision of Rs. 1624 crore corpus to double the tonnage capacity of the yard. Alang yard is blessed with a high tidal range, long beach with gentle slope and firm ground facilitating beaching of ships just at the threshold of the plots or units. Since its inception in the year 1982-83, the highest number of ships (415) came to the yard for dismantling during the year 2011-12. In that year 38.5 lakh LDT was handled here.

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