Budget 2022: Shipping ministry seeks 60% higher allocations for ship recycling capacity expansion

(Representative image)

The ministry of ports, shipping and waterways has sought a 60 percent increase in budgetary allocation to expand ship recycling capacity at the Alang Ship Breaking Yard.

Senior officials in the ministry said that a detailed presentation was made to the finance ministry on how higher allocations in the budget will help achieve the government’s goal of doubling ship recycling capacity at Alang.

Finance minister Nirmala Sitharaman had in the budget for 2021-22 announced that the government would double the ship recycling capacity at Alang to around 4.5 million light displacement tonnes (LDT) by 2024.

A sum of Rs 100 crore was allocated as assistance to shipbuilding, research and development in the budget last year.

However, due to the outbreak of the second wave of the pandemic, only limited work was undertaken for capacity expansion at Alang, already the world’s largest shipbreaking yard.

Notwithstanding the challenges due to the pandemic in the past nine months, Alang saw its capacity utilisation rise to the highest in the current financial year compared to the previous five years.

This happened as the COVID pandemic forced the owners of cruise ships to sell their vessels, some of which found its way to Alang for scrapping.

The Ship Recycling Industries Association of India told Moneycontrol that around 2.6 million LDT had been handled at Alang so far this fiscal, compared to the 1.63 million LDT handled in 2019-20 and 2 million LDT handled in 2020-21.

Senior officials said that the government was looking to add 15 new plots to the existing capacity at Alang during 2022-23 and operationalise these by 2024.

Attempts would also be made to attract European and Japanese ship owners to send their vessels for recycling, officials said. This would be done by installing more modern equipment and investing in technological advancements at Alang. The increased allocations under the budget will enable the ministry to upgrade facilities at Alang, officials said.

“Alang has seen a decline in incoming vessels for dismantling in the past decade, largely because European companies were not sending ships to India for dismantling due to concerns over non-compliance with international standards. However, if modern technology standards are adopted in Alang, it will open the international market once again,” one of the officials said.

Among the concerns about Alang yard was its non-compliance with global standards on pollution and protection of human and marine life. Officials said that 90 yards at Alang are now certified for compliance with international standards for green recycling.

They were also working to adopt modern standards of downstream waste management in order to be compliant with international standards. Alang has around 160 plots, out of which around 140 have been allotted for shipbreaking activities while the other plots are mainly used for storage.