Time-wary shipowners sail to global ports for repairs

SHIPPING

India lacks comparative advantage in the ship repairing sector, with most of the shipowners preferring to get their repairing work done at international ports such as Dubai, Singapore and Hong Kong.

"Shipowners prefer to get repairing done at terminal ports or at those ports which lie on the main channel to save time," an official at the Indian Ports Association said.

India, thus, loses on a major chunk of the ship-repairing business as it does not lie on the channel. Another reason for the shipowners favouring foreign ports could be the time constraint.

The waiting time for dry dock repair at Indian ports is three to four times higher, which is why the shipowners may turn to other countries, another port official pointed out.

This inefficiency arises out of the fact that the existing equipment is outdated and thus is not able to provide quality service.

The industry also happens to be a costly proposition, as India does not indigenously produce most of the spare parts like steel plates. As most of the marine engines are imported, their repair necessarily need expensive imported parts.

"At some dry docks like the one in Kolkata, which is a riverine port suffering from high deposition of silt, the draft at the entry channel is too low to allow large vessels to come in," an official said.

Despite these inherent disadvantages, which make ship repairing business economically unviable in India, the country still provides ship repairing services.

While dry-docking facilities are provided by the port itself in Kolkata, Chennai and Mumbai, in other instances the service is provided by shipyards such as Cochin Shipyard Ltd in Kochi and Hindustan Shipyard Ltd in Visakhapatnam.

For smaller repairs, workshops also exist at the ports.

Privatisation does not seem a lucrative option, given the past experience. The government tried to privatise the management at two dry docks in Kolkata twice during the late eighties, but with little success.

While in the first attempt, even though a consortium of Dredging Corporation of India and P&O had been formed to take over the dry docks in Kiddapore and Netaji Subash Chandra dock, the project simply did not take off due to financial unviability.

The port authorities again floated tenders for private participation, which again got a poor response.

In Chennai an Indian company Chokani International was providing dry docking facilities till early nineties, when it had to close down due to financial difficulties. Even attempts at privatising the dry dock at the Mumbai port had few takers.

While there is an argument for the country to move away from the sector for which the country does not have a comparative disadvantage, it may have its pitfalls.

"Shifting away from ship-repairing completely would not be advisable either, as it is important not to totally depend on others," the IPA official said.

The solution lies in financial restructuring of the concerns that would leave them with enough resources to invest in modernisation of equipment.

"Financial problems would continue unless the whole supply chain is indigenised, whereby the spare parts are available domestically," he said.

Many dry docks are also under weighed down by huge loans, for which they are still re-paying penal interest, resulting in huge accumulated losses, the official said.

Reducing manpower is another exercise that is needed to be undertaken, he said. This could be achieved through voluntary retirement programmes.

Giving up of redundant facilities eating into the resources of the company could also be considered, he said.