The Hindu Business Line : Kolkata Port Trust's ship-breaking activity facing hardships

THE Kolkata Port Trust's rationalisation of rates for boosting ship-breaking activity within the port premises could not have come at a more inopportune time.

The rationalisation led to lowering of rates in stages, first around July/August and again in November, to Rs 120 per tonne from the earlier Rs 600. However, not a single ship has arrived so far for demolition, according to KoPT sources. In the whole of the current year, only one ship - that too port's own grab dredger - was offered for demolition. With little prospect of another ship being offered for demolition in the near future, the rate rationalisation, it appears, has lost much of its significance.

There are several reasons why no ships are being offered for demolition. First, the skyrocketing of shipping freights in the international market, forcing the owners of even junk ships, and tubs, ideally suited for demolition, to deploy them for commercial run, may be after some repairs. As a result, the ships in bad condition, which in normal times would have been offered for demolition, continue to operate. The tonnage available for breaking, therefore, has substantially dropped.

Second, the pollution control norms. There is now an international pressure to curb the demolition activity on environment protection grounds. There have been instances where Greenpeace activists staged demonstration in one of the country's major ship-breaking yards, particularly those located on the west coast. No wonder, the local environment protection authorities too take long time to give clearance.

Next, the stiff competition from Bangladesh. The scraps obtained from demolition are an importantsource of raw materials for whatever little steel produced by foundries in Bangladesh. The authorities concerned in that country, therefore, pursue an open-door policy in regard to ship demolition. A large majority of the limited number of ships that are offered for demolition in the world market, therefore, find their ways into Bangladesh and such other countries where stringent pollution control norms are not strictly observed.

Bangladesh, which was way behind India in ship-breaking a few years ago, has now emerged as destination for ships due for scrapping.

Finally, the reduction in the import duty of steel also rendered the products obtained from ship scrap non-competitive.

Despite all these, the KoPT authorities hope that the Kiddrepore dock under Kolkata Dock System, where ship-breaking is normally undertaken, will again attract ships for demolition. The basis of optimism of course is not explained.