Minor ports resent DGFT order banning scrap imports

With the notification issued by the Directorate General of Foreign Trade (DGFT) banning handling of heavy metal scraps (HMS) by minor ports in the country in the wake of largescale seizure of explosive materials, there is a strong possibility of scrap prices going skywards.

While DGFT has allowed the minor ports to handle compact shredded scraps (CSS), various minor port operators are of the opinion that agencies, mainly Customs should be equipped with modern gadgets to check scraps to prevent fatality and these ports should be given back the right to handle HMS too.

"In the wake of the recent developments, the steel industry may face the heat due to restrictions put by the DGFT. Rather, the government should strengthen its own agencies which handle securities inside the ports and are also responsible for checking consignments, unloaded and loaded, to stop the import of dangerous scrap material," said a senior member of Confederation of Indian Industry (CII) requesting anonymity.

He said that minor ports are being victimised in the process.

Sanjay Gupta, chief executive officer of Adani Group, which runs India's first private port "" Mundra Port in Kutch, and also the president of Gujarat Private Ports, Special Economic Zone Association (GPPSEZA), said, "If the scrap dealers abroad need to shred and compact scraps before loading in ships or containers for use in India, definitely cost of these scraps will be higher than HMS and we can foresee a rise in scrap prices. With the new DGFT order, all HMS consignments which were earlier being unloaded at minor ports, would now be diverted to the major ports and thus eating into the share of smaller ones which is against the interest of further development of minor ports in the country."

He also said that the government should have rather thought of strengthening vigil by its own agencies.

Mundra Port, handled over 1,50,000 tonne of scraps in the last one year while Mundra International Container Terminal (MICT), run by the multinational P&O Ports Ltd, also handles significant load of scrap, mostly coming from Iran, Iraq, United Arab Emirates, Oman, South Africa, Malaysia, Sri Lanka and other countries.

A source close to Pipavav Port in Amreli, said, "Definitely this notification is not in the interest of the minor ports. The government should have asked for an explanation from its agencies about the import of such consignments without proper checking by Customs."

A K Joti, chairman of Kandla Port Trust (KPT), India's number two port which handles loads of scrap every year, said, "Last fiscal, we had handled 1.70 twenty equivalent units (TEUs) of scrap in which 10 per cent was HMS and 20 per cent was CSS. We understand that DGFT notification has allowed major ports such as KPT to handle HMS after due diligence, but this will certainly result in delays."

On the issue of containers from KPT containing deadly scrap, Joti said, "We carry out the terminal operations of loading and discharging cargo and the responsibility of packing and documentation of cargo rests with the shipper at the origin. It is therefore important that the origin countries ensure that the cargo is legal and safe."

Joti, however, sounded happy with the government decision to allow major ports to handle HMS. He said, "We are not going to be affected revenuewise from this new order as Kandla Port will still be authorised to handle scraps. Only a few private ports, some minor ports in the country may lose some revenue."

Joti also clarified that the scrap consignment which proved to be fatal for 10 persons at Ghaziabad, did not originate from KPT, but from Mundra Port.

Sandeep Mehta, president of Gujarat Adani Port Ltd (GAPL), denying that the consignment originated from Mundra Port, said, "You need to check with MICT as it independently handles the terminal inside our port."

Nikhil Nayak, director of MICT, was not available for his comments. Among the other minor ports, Gujarat Maritime Board (GMB)-managed ports also handle scrap but in a lesser quantity as in the year 2002-03, the GMB ports handled cumulative 1.74 lakh tonne of scrap which came down to handling of only 0.33 lakh tonne of scrap in the last fiscal year.

There are at present 168 minor and intermediate ports in the country in which 124 are located along the west coast while remaining 44 are on the east coast.