The Hindu Business Line : Shipping cos oppose move to increase on-board trainees

New Tax regime
Under the present Tonnage Tax, any ship had to take on board at least one trainee.
Proposal to increase the minimum number to 3 for every 20 crew members.
If any company did not meet this norm it could be taken out of the tax regime on ground of non-compliance.

Mumbai , Sept. 14

Domestic shipping companies have come on a collision course with the Directorate-General of Shipping on the latter's proposal to increase the mandatory number of berths to be given to maritime trainees on board ships.

As part of its initiative to ease the shortage of officers in the shipping sector, the DG-S has recently proposed to increase the minimum number of on-board trainees from the present one for every 10 crew members to three for every 20 crew members. The DG-S intends to incorporate this proposal in the Tonnage Tax, so that if any shipping company did not meet this norm it could be taken out of the new tax regime on ground of non-compliance.

Shipping companies have, however, opposed this proposal, stating that there was a "physical constraint" on board their vessels to accommodate more than one person. Moreover, they claim that this was no way to meet the shortage of officers, as most trainees, after completion of their onboard training and notching up some experience, tend to move over to foreign-flagged vessels for better remuneration.

Industry sources said as it were, the shipping companies were increasingly finding space on board their vessels a premium. Apart from availability of only a limited number of berths, the shipowners have to carry on board their vessels a representative of some of their charterers. This is especially more so for tankers, as the oil majors often insisted that the vessels carry one of their representatives for reasons of safety of their cargoes.

"Also, with the oil majors insisting on a certain "experience matrix" on board tankers, it becomes difficult even to carry the mandatory number of one officer," an industry source said.

Mandatory norm

Under the present Tonnage Tax regime, any ship that was brought under this regime had to take on board at least one trainee. In fact, many shipping companies failed to meet even this norm, resulting in the industry burdened with a liability of about Rs 1 crore for non-compliance.

"So far, since the new tax was introduced, shipping companies had offered one lakh mandays of training on board their vessels. But this has not brought down the demand-supply gap at the senior levels in any significant measure," the industry source pointed out.

In fact, some shipowners had to compromise on their crew composition just to meet this mandatory norm under Tonnage Tax. "These owners used to replace lower level crew members, like oil man, with the trainees, for fear of being removed from the new tax regime for non-compliance. This often compromised the safety of the vessels — this was more in the offshore vessels," according to the source.

Shortage of space

Shipping companies reiterate that it was not their intention to avoid taking trainees on board, but it was just that they were facing increasing shortage of onboard space to accommodate more trainees.

The Indian shipping industry, at present, faces a shortage of between 500 and 700 experienced officers. "Feedback from different parts of the world suggest that Indians are amongst the most competent officers in the industry and more than 3,000 Indian officers are employed on foreign-flagged vessels," an official of the DG-Shipping pointed out.

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