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Alang's recycling yard turns wary of future amid spike in cruise vessels

Alang sees more cruise ships dock in the past one year than the previous decade but vies for more cargo, defence ships

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Vinay Umarji Ahmedabad
4 min read Last Updated : Nov 05 2021 | 5:42 PM IST
At a time when a booming freight market has meant fewer cargo ships docking at Alang's ship recycling yard, a jump in cruise ships arrivals has come as a respite, owing to the impact of pandemic on cruise tourism. However, for long-term sustainability, the industry is now trying to get defence ships and cargo ships from the European Union (EU) to dock at Alang, by trying to meet EU standards.

According to Vishnu Gupta, president of the Ship Recycling Industries Association of India, some 15 cruise ships docked at Alang during the past one year or so, more than what the yard saw in the previous decade. Of the over 150 vessels that docked at Alang in the last 12 months, 10 per cent of it have been cruise ships--numbers that were unlikely in the previous decade.

"Cruise tourism took a hit amid and post pandemic, leading to sudden jump in cruise ships being decommissioned and arriving at Alang for recycling. In terms of numbers it was unusual, as Alang had seen a dozen-odd cruise ships docking cumulatively in the past decade or so," Gupta added.

However, in terms of weight of the vessels measured in light displacement tonnage (ldt), business has been dismal despite a rise in the number of vessels, especially cruise ships. The ship recycling units at Alang yard largely get cargo vessels for dismantling, which weigh more in terms of ldt than cruise ships, which tend to be lighter in tonnage.

Hence, while the number of cruise ships at Alang may have spiked, there has been a fall in cargo vessels due to a booming and robust global freight market, leading to fewer ships being decommissioned. As a result, the overall annual tonnage of vessel arrivals at Alang has remained stagnant at 1.5-1.6 million ldt even in 2020-21 and so far this year.

Moreover, according to industry sources, whatever cruise ships were supposed to arrive for recycling have come and now with cruise tourism resuming business again post pandemic, fewer or no vessels are likely to arrive at Alang.

"Whatever cruise ships had to come have arrived and are being dismantled. Now, it is back to business as usual where Alang continues to face competition globally with the likes of Turkey, Pakistan and Bangladesh. For India, especially Alang, to make the most of the global market, it will now have to sign a vessel convention with the EU and ensure that the units here meet European standards for more favourable business," said Mukesh Patel, Chairman of Shri Ram Group, one of the largest ship recycling players at Alang.

There have been a couple of issues plaguing the industry at Alang. Firstly, ever since it began following the more environmentally sound Hong Kong Convention for 100 per cent green ship recycling, vessels not adhering to the convention have moved to competing nations like Bangladesh and Pakistan which are not part of the convention yet. As a result, for some years only 80 of the total 150 units are operational at Alang due to lack of business.

Moreover, the likes of Bangladesh and Pakistan offer better prices by anywhere between $20 and $40 per tonne to vessel owners for recycling than Alang.

Secondly, Alang has historically been dependent largely on cargo vessels as defence ships and vessels from the EU stay away for lack of meeting global standards.

"The industry has written to both the Centre and state government to assist Alang in meeting these standards, especially that of the EU. For instance, the standards require proper medical waste management and a trauma centre which is lacking at Alang. As a result, most of these vessels go to Turkey despite a price of $200 per tonne as against India's $500-600 per tonne," said Patel.

Meanwhile, in its efforts to expand its horizon, Alang has also been requesting the government for an amalgamation policy so that plots can be consolidated to meet EU requirements. Currently, plots at Alang tend to be smaller than the EU standard of 250 metres of plot width while that of Turkey tends to be around 400-600 metres.

Topics :Freightcruise shipCargo

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