The Alang recycling yard is facing unprecedented competition from Pakistan and Bangladesh. As if this was not enough, the weakening of the rupee is adding to its woes. The yard that a decade ago recycled 415 ships, is finding it difficult to run at even 50 percent capacity.
Though Union Finance Minister Nirmala Sitharaman, while presenting the 2020-21 budget, had envisaged doubling ship recycling capacity by 2024, it does not seem to be happening till European Union regulations are met.
This is possible, but unfortunately the government machinery is working at a very slow pace in meeting the EU regulations on hazardous waste management and other conditions, pointed out Mukesh Patel, former president of the Ship Recycling Industries Association.
The first step in this direction is amalgamation of small plots, the present plot in size is 30 to 120 meters wide, to EU norms. One has to set up the hazardous waste facility within the plot, training centre and canteen for workers in each plot, plus space for breaking, segregating steel, for which the minimum plot size should be 250 to 300 meters wide, explained Patel.
For this the Gujarat Maritime Board (GMB) has to first allow amalgamation. if these steps are taken a major problem will be solved, but even for that the board is taking a lot of time to fix new norms, complained the former president.
Even in bad times, the GMB charges for these plots are very high, they need to be slashed and made affordable for ship breakers, advocates Haresh Parmar, secretary of the Ship Recycling Industries Association.
Also, international competition is killing the industry, said Parmar and added that Pakistan and Bangladesh ship breakers are paying very high prices for ships, which the Indian ship breakers are not able to afford. This is why buying and recycling has fallen drastically and 50 percent of the plots are lying idle in the yard.
According to the GMB and Association data, the ship breaking yard reached its peak in 2011-12, when it recycled 415 ships in a year, but after that the number has been continuously dropping. In 2016 313 ships were recycled, 2018 (258), 2019 (190), 2020 (199) and last year only 187.
Patel said if the GMB sets up trauma centres and other medical facilities, it will help in fulfilling EU regulations. Once the EU permits, then there will be no shortage of ships for this recycling yard.
The industry also hopes that the government can get the US, Russia and Brazilian governments permission to break warships, which will help the industry to bounce back.