The ship recycling yard at Alang, located near Bhavnagar, is currently facing significant challenges. The number of ships being brought to the facility for dismantling has reached a 10-year low in the financial year 2022-2023. Official data shows that only 137 ships with 11.47 lakh light displacement tonnage (LDT) were received at Alang, compared to 209 vessels in the same period the previous fiscal year.
There are several factors contributing to this decline. Global conditions have led ship owners to prefer cheaper and less-regulated facilities in Bangladesh and Pakistan for shipbreaking. In addition, changes in steel usage rules imposed by the Bureau of Indian Standards (BIS) have further exacerbated the situation for ship breakers in Alang.
Previously, the steel recovered from dismantled ships was used in manufacturing various steel products, such as TMT bars, rods, plates, sheets, and ingots, primarily used in the construction industry. However, in 2012, the BIS implemented mandatory standards for these steel products. According to the new parameters, ship breakers must provide the metallurgy history of the raw material for re-rolling. This requirement poses challenges for ship breakers as it is not feasible for them to meet these criteria, forcing them to sell the entire steel as scrap for low prices.
The declining number of ships being brought to Alang has created an existential crisis for the shipbreaking yard, according to Haresh Parmar, the secretary of the Ship Recycling Industries Association India (SRIA). SRIA has made several representations to the central government and the Prime Minister’s Office (PMO), emphasizing that the steel produced at Alang meets high standards.
Industry experts have identified additional challenges. India is not receiving European-flagged ships for dismantling due to the country’s non-compliance with EU regulations on waste management. Ship breakers in Alang also face issues such as high charges levied by the Gujarat Maritime Board (GMB). SRIA has appealed to the state government to reduce these charges.
Rohit Agarwal, a consultant for the ship recycling business, has pointed out that Pakistan’s current financial crisis has made it difficult for them to purchase large vessels. This situation is expected to benefit India in the upcoming financial year 2023-24, as more vessels may be directed towards Indian shipbreaking yards.