Comments
The shipping community in Cochin Port has voiced concern over the limited number of protection and indemnity clubs (P&I Clubs) that were approved by the government to provide insurance to ships calling at major ports, saying that it has started to hurt crew change and bunkering business.
India has made it mandatory for foreign ships entering the country’s ports to hold a valid third-party liability cover against maritime claims such as oil pollution, wreck removal and damage to port property.
Such third-party liability risks have to be insured with the London-based International Group of Protection and Indemnity Clubs (IG Clubs) or such other insurance company authorised by the government, according to the Merchant Shipping (Regulation of Entry of Ships into Ports, Anchorages and Offshore Facilities) Rules 2012.
Globally, such third-party risks are insured with the IG Clubs, a 13-member group based in London that provides liability coverage for about 90 per cent of the world’s ocean-going ships. Besides, the directorate general of shipping has granted permission to 16 non-IG Clubs to provide cover to ships calling at major ports.
Shipping industry officials said that their business opportunities especially in crew change and bunkering have been seriously hampered by the limited number of P&I Clubs. With this, several ships are not able to anchor either at the port berths or the outer anchorages for crew change operations.
Drastic impact
The situation has come at a time when Kochi has emerged as a hub for a crew change, bunkering, supply of spares and provisions during the pandemic, bringing additional revenue to the port.
From 4 to 5 crew changes in a week, the frequency has dropped drastically to a similar number monthly. The port is also losing tug hire, anchorage charges etc. This will further impact the initiatives of public sector oil marketing companies to compete with Colombo Port in bunker supply, the officials said.
K Harikumar, President, Cochin Chamber of Commerce and Industry said that the port authorities have started restricting vessels within the port based on a DG Shipping order to restrict 29 P&I Clubs and this has led to a business loss to shipping firms operating in Kochi.
Highly critical
However, government officials maintained that P&I cover for ships entering ports are very critical in the event of any damage to port property, oil spill or sinking within the port. There is a small number of P&I Clubs that are unreliable operators and who do not come forward after an incident has occurred.
Following some incidents where the P&I Club did not respond after an accident in Indian waters, the DG Shipping stepped in to ensure that only ships covered by reliable P&I Clubs are permitted to enter Indian waters.
While it is desirable in the interests of business for more P&I Clubs to be approved, it is a very fine line to ensure that the task of protecting Indian waters are not compromised by allowing fly by night operators to enter Indian ports, the officials added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.