Business Daily from THE HINDU group of publications
Thursday, Aug 17, 2006
Business Daily from THE HINDU group of publications Thursday, Aug 17, 2006 |
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Logistics
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General Insurance Meet today to look at options to P&I cover N.K. Kurup
Proposed alternative An option is to shift the responsibility of meeting the expenses for clearing the wrecks and oil spillage from shipping lines to ports. This may lead to increase in port charges as ports would pass on the burden to port users.
Mumbai , Aug. 16 Having kept the new Entry Rules for ships in abeyance, the domestic maritime administration is exploring other alternatives to the P&I insurance scheme, for covering the expenses for removing shipwrecks and clearing oil spillage at ports in the event of an accident. The Nautical Advisor to Government of India has called a meeting of port users, port officials and insurance company representatives in Mumbai on Thursday to discuss various options for meeting the cost of wreck removal. One of the alternatives being considered is to shift the responsibility of meeting the expenses for clearing the wrecks and oil spillage from shipping lines to ports. This may lead to increase in port charges as ports would pass on the burden to port users.
New rule requirements
Under the Entry Rules, which was introduced from September 2005, no ships can call at an Indian port without an insurance cover from a Government-approved P&I Club or an insurance company for meeting the expenses of removal of wreckage in the event of a mishap and for paying compensation for damages caused by oil spillage. Major ports such as Mumbai and Jawaharlal Nehru had decided to introduce the rules from August 1. But following protest from shipping lines, the Government had decided to keep the new rules in abeyance. Shipping lines' contention was that several Indian ships, particularly smaller ones, and offshore supply vessels are not attached with P&I clubs approved by the government. They are insured with international insurance companies, but not with those included in the government's approved list.
Wrecks along coast
The new Entry Rules was introduced to ensure that shipping companies pay for the damages caused by their ships to the port installations and the harbour. Several wrecks are lying along the Indian coast with owners of the ship refusing to clear them. Ports find it too costly to remove them. If ships have P&I cover, port can claim such expenses directly from the P&I club. Now, an alternative to P&I cover is being talked about. According to a shipping company official, the proposal is that all ports should go in for insurance cover to meet the expenses of removing wrecks and for clearing oil spillage. The premium to the insurance cover may be included in the port charges. The proposal many not go well the port trusts. A senior port official said that such a system is not prevalent in any ports in the world.
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