IHS Maritime 360 – Indian state accepts Alang upgrade loan

(Written by Girija Shettar)

Access the original article

13 January 2015 - The Alang ship recycling facility in Gujarat, India will upgrade 70 ship-breaking yards over the next four years with a $180.28M loan, it has been confirmed.

Speaking to IHS Maritime today, Atul Sharma of the Gujarat Maritime Board said that the Japan International Cooperation Agency (JICA) will provide 85% of the funds, with India investing the remaining 15%.

The loan will be repaid over the next 40 years at an interest rate of 1.4%.

A JICA delegation has been in India during 12-13 January to conduct stakeholder meetings, and the proposal is currently being processed by the federal and state governments.

Planned upgrades that will be undertaken through the loan include the construction of a pre-treatment facility for the removal and treatment of hazardous materials (hazmats) from vessels that pose ‘special concerns’; and the expansion of the facility’s current treatment storage disposal facility (incinerators and oil treatment) to enable 25 tonnes of waste to be incinerated daily.

The hazmat removal dry dock will facilitate the safe removal of both loose and embedded toxic materials such as asbestos from larger passenger ships, ferries, and ro-ro vessels, sludge from oil and chemical tanker cargo holds, and paint chips from older vessels.

Sharma said that any parts removed without being damaged could be reused, such as sheets containing asbestos, or cables and electronic circuits.

Part of the funding will go into the ongoing construction of a housing pilot project that aims to accommodate, in the first phase, 1,000 labourers. A second phase envisages accommodation for up to 5,000 labourers over the next three years. Sharma said that a community school and hall are also planned.

Alang’s recycling yards are under constant scrutiny by national and international welfare organisations because of fatal accidents each year. However, at least four yards have completed the first phase of an international standard certification process that would ultimately confirm the yards meet the standards of the International Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships.

However, the yards claim to be struggling economically. While India reduced basic customs duty on ships imported for breaking from 5% to 2.5% last year, recyclers say they have been unable to break even because of a rise in ship prices and weakening steel demand caused by competition from steel products sold cheaply from China.