Alang’s Shipbreaking Industry on the Brink: BIS Decision Casts a Long Shadow
- Resolving the BIS issue is not just about saving an industry; it’s about preserving the livelihoods of thousands of workers and maintaining the economic stability of Bhavnagar district.
- The situation in Alang has garnered the attention of local and national leaders. Two Union Ministers representing the Bhavnagar district, along with other stakeholders, are actively seeking a reasonable solution to the BIS issue to preserve the economic vitality of the region. There is hope that through dialogue and reconsideration, a balanced approach can be found that ensures both the safety and quality of construction materials and the survival of the ship recycling industry.
Alang, a small coastal town in the Bhavnagar district of Gujarat, India, has long been synonymous with ship recycling. It boasts one of the largest ship-breaking yards in the world, where a significant portion of the world’s decommissioned vessels meet their end. However, this industry, which once thrived and contributed substantially to the local and national economy, is now caught in a whirlwind of regulatory and economic challenges that threaten its very existence. The latest blow comes from the Bureau of Indian Standards (BIS), which has deprecated the use of ship-breaking steel plates for the construction of Thermo-Mechanically Treated (TMT) bars, also known as rebars.
This issue is particularly pressing at a time when the central government is considering doubling the capacity of the ship recycling industry, highlighting a stark contradiction between policy intentions and regulatory actions.
The Significance of Ship Recycling in Alang
Alang’s ship recycling yards play a critical role in the global ship dismantling industry. Approximately 90% of the material recovered from shipwrecks in Alang is iron scrap, which is then used as raw material in re-rolling mills for producing various steel products, including channels, bars, rails, and TMT bars. This process not only recycles valuable materials but also supports a significant portion of the local economy by providing raw materials to over 40 re-rolling mills in the Bhavnagar district.
Regulatory Roadblocks: BIS Guidelines
In 2014, the BIS issued a directive that banned the use of ship plates and scraps as raw materials in the production of TMT bars. This decision was a significant departure from previous guidelines, which allowed the use of these materials for making rails. The sudden shift in policy raised eyebrows and sparked allegations of undue influence from major industrial houses in India, suggesting that these powerful entities were manipulating regulations to stifle competition from the ship recycling industry.
The Expert Committee’s Findings
In response to these regulatory changes, an expert committee was formed earlier to study the situation at the Alang Ship Recycling Yard. The committee included representatives from MECON, the National Institute of Secondary Steel Technology (NISST), the Ministry of Ports, Shipping and Waterways (MoPSW), BIS, the Material Recycling Association of India (MRAI), MSTC Limited, the Ship Recycling Industries Association, and officials from the Gujarat Maritime Board.
During their visit, the committee collected samples of ship plates from various plots within the ship recycling yards. These samples were then re-rolled into TMT bars of different sizes (8 mm, 10 mm, and 12 mm) and subjected to rigorous laboratory tests. The results showed that the ship’s side and bottom plates, which are subjected to various types of stress in different directions, were of a quality that met international maritime standards. This finding supports the ship breakers’ argument that the steel used in ships, due to its high quality and strict international maritime regulations, should be suitable for use in re-rolling mills as raw material.
Economic Implications for Bhavnagar
Hareshbhai Patel, the leader of the Bhavnagar-Sihore Re-Rolling Mill Association, has voiced concerns about the severe economic repercussions if the BIS ban remains in place. The prohibition on using ship plates as raw material could lead to the closure of more than 40 re-rolling mills in the Bhavnagar district, which would result in significant job losses and a ripple effect on the local economy.
The Broader Economic Context
The ship recycling industry is one of the pillars of Bhavnagar’s economy, alongside the diamond and plastic industries. However, both the diamond and plastic sectors have been in decline, placing increased pressure on the ship recycling industry to sustain the local economic cycle. The downturn in ship recycling over the past two years, exacerbated by the BIS issue, has pushed the industry to the brink of collapse. The potential closure of this sector could lead to an economic crisis in Bhavnagar, with widespread job losses and decreased economic activity.
International and Domestic Challenges
The challenges faced by Alang’s ship recycling industry are not limited to domestic regulatory issues. International factors have also played a significant role in the industry’s decline. The ongoing conflict between Houthi and Hezbollah forces in the Red Sea has led to a shift in shipping routes, with cargo ships avoiding this crucial waterway. This has resulted in higher freight rates and fewer older ships being sent for scrapping, as ship owners opt to renovate and continue using their existing vessels.
Despite several concessions and support measures from the central and state governments aimed at reviving Alang’s ship recycling industry, the sector continues to struggle. The BIS ban on using ship plates as raw material has emerged as the latest and most significant hurdle, threatening the very survival of the industry.
Calls for Reassessment and Hope for Resolution
Vishnukumar Gupta, President of the Ship Recycling Industries Association (India), has called for a reassessment of the BIS directive. He argues that without the ability to use ship plates in rolling mills, the industry will find it challenging to sustain itself. This sentiment is echoed by many in the local community and industry, who are now looking to political leaders and policymakers for a solution.
The Human Impact
Beyond the economic statistics and policy discussions, the human impact of the crisis in Alang cannot be overstated. Thousands of workers and their families depend on the ship recycling industry for their livelihoods. The potential closure of re-rolling mills and the broader economic downturn would have devastating effects on these individuals, many of whom have few alternative employment opportunities.
Alang’s ship recycling industry has not only provided jobs but also fostered a unique community of skilled labourers who possess specialized knowledge and expertise in dismantling and recycling ships. The loss of this industry would mean the loss of a rich repository of skills and experience that has been built up over decades.
Conclusion
The future of Alang’s ship recycling industry hangs in the balance as it faces a perfect storm of regulatory challenges and economic pressures. The BIS directive banning the use of ship plates in the production of TMT bars represents a significant threat to the industry’s survival. However, with concerted efforts from industry leaders, policymakers, and the local community, there is still hope that a viable solution can be found.
Resolving the BIS issue is not just about saving an industry; it’s about preserving the livelihoods of thousands of workers and maintaining the economic stability of Bhavnagar district. It is a complex challenge that requires a nuanced and collaborative approach, balancing safety and quality concerns with the economic realities faced by the ship recycling industry.
As Alang navigates these turbulent waters, the outcome of this struggle will serve as a testament to the resilience and adaptability of the community and the industry. With the right support and regulatory adjustments, Alang can continue to play a vital role in global ship recycling, contributing to sustainable practices and economic development for years to come.
