Staff crunch halts shippers' plans

When Wipro Chairman Azim Premji said there would be no engineers left in India to be recruited by 2010, he might as well have been talking about the shipping industry.

The shortage of qualified personnel in shipping has become so acute that everyday operations are suffering and expansion plans are in jeopardy.

KM Sheth, executive chairman of Great Eastern Shipping Company (GE Shipping), the country's largest private shipping company, is among those concerned about the alarming shortage of seafarers, which has raised serious operational issues and threatened expansion plans.

"We are planning to return 50 per cent of the fees paid by the candidates of our training institute if they are willing to work for GE Shipping for five years," Sheth said.

GE Shipping runs the Great Eastern Institute of Maritime Studies (GEIMS) at Lonavala and provides residential graduation courses for officers.

Indian shipping companies, which have embarked on a mega expansion by aiming to acquire vessels worth Rs 20,000 crore in the next 3 to 4 years, are facing a shortage of over 900 officers, according to estimates.

National carrier Shipping Corporation of India alone has set a target of spending Rs 13,135 crore to buy vessels in the Eleventh Five-Year Plan.

Companies such as GE Shipping, Mercator Lines, Varun Shipping, Essar Shipping, Shreyas Shipping, Chowgule Shipping and SKS Logistics also have major expansion plans. However, the shortage of seafarers threatens to play spoilsport.

One of the reasons for the shortage is that while seafarers on board a foreign ship enjoy total income tax exemption, Indian seafarers have to pay taxes. According to an international study, the worldwide shortage of officers in 2005 was around 10,000.

"The severe shortage of officers is going to adversely impact the ambitious expansion plans of shipping companies. It is difficult to run the existing fleet. For instance, ships are held up at ports due to shortage of officers. A ship cannot sail without the prescribed number of seafarers," said SS Kulkarni, secretary general, Indian National Shipowners' Association. One day lost at a port means an average loss of $25,000 for a ship.

An executive of a leading shipping company said freight rates of dry bulk vessels were shooting up and the companies were seeking to capitalise on this.

"But a shortage of seafarers is going to pose a huge problem in acquiring dry bulk vessels or tanker ships. The shortage has also led to long working hours for seafarers. There have been some cases of suicide by seafarers recently," he added.

To counter this, the director general of shipping, Kiran Dhingra, said they were planning to allow two foreign officers on board Indian ships.

The directorate is also trying to put in place a condition that Indian seafarers trained on Indian ships should work for domestic companies for three years. According to the proposal, a seafarer trained by an Indian ship should get permission from the trainer for joining a foreign ship.

"Both these proposals are shuttling between the departments of shipping, external affairs and home, and the Intelligence Bureau. The ministry of external affairs is considering a case-by-case approval for foreign nationals for working on Indian ships," a source said.

He said by the time a foreign officer got the permission, he would have joined another vessel.