India's shipbreaking has been removed from the Steel Ministry to come under the Shipping Ministry to help the sector attract more business and deflect criticism, reports the Hindu daily of Chennai.
This will be done through Shipping Ministry marketing of the shipbreaking beaches, such as the world's largest scrapping area, Alang in Gujarat, said ministerial sources.
While shipbreaking has been under the Steel Ministry, the role of the Shipping Ministry is now vital in terms of rapidly encroaching regulations, said India's Ship Recycling Industries Association secretary Nitin Kanakiya.
The first thing that the Shipping Ministry did was to constitute an inter-ministerial shipbreaking scrap committee to consider issues related to the industry.
The ministry now plans to seek the help of Japan International Cooperation Agency to upgrade the Alang beaches, which have come under criticism from NGOs, aggrieved at the dangers poor Indian shipbreakers face.
NGOs like BAN (Basel Action Network) is mostly concerned about toxic waste while the American Shipbreaking Platform, worries about the Indian workers facing on-the-job risks while promoting safer more costly American yards.
Another plan will be prepared to modernise the Darukhana shipbreaking facility at Mumbai, sources said. This is one of the 15 major projects taken up under the ministry's comprehensive action plan.
The action plan follows Finance Minister Arun Jaitley's announcement in the budget rationalising shipbreaking taxes and melting scrap of iron or steel by reducing duties on dead ships from five per cent to 2.5 per cent.
Fewer ships have arrived, 24 per cent less than the 390 in fiscal 2013. The rupee's 20 per cent fall meant the average scrap-purchase price differential between Indian and Bangladeshi bidders narrowed, nearly level with the Pakistanis.
The duty cut translates into gross savings of about $15/LDT (light displacement ton) and this will help shipbreakers add to their bidding price, and help widen the differential versus rivals once again.
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