'DGS deserves credit for maritime education grading'

Q&A/Ajay Dwivedi, head, rating criteria and product development,Crisil

India, which has a rich pool of seafarers who are much coveted by foreign shipping companies, has taken the lead in grading maritime education.

The Directorate General of Shipping (DGS) has mandated three rating agencies Crisil, Icra and CARE, to conduct such ratings.

The first such rating has already been done by Crisil "" of the Marine Engineering & Research Institute in Kolkata. Ajay Dwivedi, head, rating criteria and product development, Crisil, says in an interview with Business Standard that India can emerge as a training centre for many other countries.

What has prompted the sudden rating of maritime institutes which was not being done so far?

I wouldn't call it a sudden development. Till 1997, there were only four institutes. Subsequent to that, when only STCW 95 was made mandatory, there was a need to beef up the training infrastructure in India. (STCW stands for Standards of Training and Watchkeeping. It is a system overseen by the International Maritime Organisation, that seeks to maintain international minimum standards of shipboard training and operation.

For the individual seafarer it is a certificate/endorsement to your national certificate of marine competency that permits you to operate in international waters.)

If Indian seafarers did not complete these courses, their jobs would be at stake. So, at that time the DGS allowed a lot of private institutes to come up because that was the only way the training requirements of all the existing seafarers could have been met.

Currently there are about 130 institutes. As the regulator and the entity responsible for the quality of seafarers coming out of India, the DGS has been taking steps to ensure that the quality of the education imparted by all these different institutes is consistent and it meets basic requirements.

The DGS has, over a period of time, been introducing new measures as a part of that effort. For instance, it had made it mandatory for institutes to get ISO quality certification. The introduction of rating for the institutes is a continuation of this process. It is just another way of ensuring a certain quality of training.

Further, the grading is not that of institutes per se but of the courses they offer. Any institute grading that comes out will be on the basis of the grading of the various courses that it offers.

What is the methodology used to arrive at a grading?

Rating in the field of maritime education as a concept is being applied for first time anywhere in the world. In fact, a number of regulators have been thinking about it but have not implemented it.

The DGS really deserves credit for being a pioneer. There was a lot of discussion on what should be the methodology. Actually, we have come out with an indicative list of parameters that will be used for doing the grading which is put out by the DGS in the public domain.

These are infrastructure, faculty, financial performance and sustainability, management & process quality and overall effectiveness. These are the parameters that would be very broadly used by all the rating agencies for the grading.

Individual agencies would be free to interpret various aspects of those parameters but the broad outlines would remain the same.

Can maritime institutes or courses be rated like financial instruments issued by corporates?

Definitely. We at Crisil believe that grading has value to all users in any situation where people have choice.

Suppose I, as a student, have a choice between five institutes that offer a course that can fully meet my requirement. Assume that all of them are DGS approved, have ISO certifications and are free to charge different fees.

So how do I know which institute is actually a doing a better job of imparting the skills that are supposed to come to me at the end of the course. So, to that extent, that relative assessment does have a value.

In terms of utility we feel that there is a need. In terms of whether it can be done, we feel that for maritime institutes it is relatively easier because there is a very clearly laid down list of what needs to be achieved by a particular course.

We have found that it is possible to distinguish institutes on the basis of the extent to which they are meeting the requirements of training in a particular course.

Do you see maritime rating as a major revenue stream for Crisil?

I don't think it is a major revenue stream or will become a major revenue stream. Our involvement in this is mainly as a developmental effort. The revenues are nowhere near covering the costs for developing this product, having the methodology and working out the entire structure of the exercise.

We don' t think the profit motive is why we are involved in the exercise. We think that it is a very good developmental idea. It is a pioneering effort and it is good for India to be in the forefront of some such initiative.

And we also feel that if we are able to have a very transparent measure about the quality of the educational system, then India can emerge as a training centre regionally because the costs of providing education is much lower than in a lot of other countries. Thus India can emerge as a training center for seafarers around far east and gulf countries.

Any more ratings due apart from that of the Kolkata institute?

We are talking to a quite a few institutes. Just as in our rating business, we have a policy of disclosing the rating only at the end of the exercise and only after the institute that we are rating decides to accept our grading.

I now understand that Icra and CARE are allowed to operate in this business. Will this not lead to confusion with various agencies coming out with different ratings?

Efforts have been made to minimise any confusion that may arise as the DGS has set out a list of indicative parameters for assessment. Also, the DGS has guided all agencies to use the same five point scale. All these steps will minimise confusion among users.

Beyond a point, it is healthy to have competition and the agency that does a better job of rating the maritime courses will have a preference among the users.