CHAPTER 4 GROWTH AND DEVELOPMENT OF SHIPBREAKING ACTIVITIES AT ALANG AND SOSIYA

Transcription

1 CHAPTER 4 GROWTH AND DEVELOPMENT OF SHIPBREAKING ACTIVITIES AT ALANG AND SOSIYA In this chapter, development of the ship-breaking yards of Alang and Sosiya is highlighted. The points covered in this chapter are: (1) Background of shipbreaking activities of Alang and Sosiya, (2) Growth of ship-breaking activities of both Alang and Sosiya, (3) Alang's contribution to employment generation, and (4) its contribution to Gujarat Maritime Board and both to state and national exchequers. 4.1 Background of Ship-breaking Activities of Alang and Sosiya The background of the development of ship-breaking activity at Alang are as follows: (i) In Gujarat during the early part of 1980s, there was tremendous demand for scrap for the innumerable foundries and rolling mills. (ii) The Government of Gujarat adopted a policy in favour of ship-breaking activity in the coast of Gujarat. (iii) Ghosh-Mehta-Joshi Committee of the Small Scale Industries Service Institute of Ahmedabad made a study on it and have observed that development prospects for ship-breaking activity in India are promising. (iv) On behalf of Gujarat Government, the Gujarat Maritime Board made an intensive survey and identified Alang as the m;:)st ideal for developing shipbreaking activity. (v) Alang in the Gulf of Cambay and its anchorage have been considered as the "protected" areas even during monsoon for ship-breaking. (vi) Alang falls with in a district high tide zone where the highest tide rises upto 10 meters. This is considered to be the most favourable attribute when shipbreaking activity is undertaking through beaching method. In this method, the vessels bows forward during high tide and with the help of the full propelling the vessel is beached. 117

2 118 (vii) The coast of Alang is gently shoping and has a long dry approach area in reaching upto vessel. (viii) The approach road upto anchoring is silt free and anchorage is located at a short distance. (ix) The sea bed at Alang dries up very quickly during the ebb period and allows easy accessibility for all kinds of material handling equipments. (x) The silt free beach condition of Alang helps in maintaining its stable position through out the process of ship-breaking. (xi) Further, the Alang-Sosiya is free from any other claims for the competitive uses like merchant shipping, fishing, salt works or acquaculture. (xii) Alang is favoured with about 10 Krns dry belt end owe red with the above attributes. This has made Alang the world's largest ship-breaking yard. 4.2 Growth and Development of Ship-breaking Activities at Alang and Sosiya yards Alang is a small village of about 5000 population. Before 1983, the village did not have any identity. But today it is wei-known for ship-breaking. Alang is situated on Gulf of Khambhat at latitude 21-24' N and longitude 72-12'E. The location of Alang is shown in map 1 & 2. It is 45 Kms away from Bhavnagar city and 11 kms from Trapaj Village of East-West 40. Till the beginningo 1980s, ship-breaking was mainly concentrated in Mumbai, Kolkatta and Cochin. Gujarat has natural advantage of the longest coastal lines of about 1600 Krns. and port facilities for international trade at Jamnagar, Porbandar and Kandla. Having foreseen the potential, Government of India planned the development of new locations at Gujarat, Andhra Pradesh, Kerala and Karnataka. In Gujarat, Alang was identified as the most suitable site for ship-breaking activity. The Alang ship-breaking yard came into existence in February The first ship named Kota-Ionjong beached for breaking at 9.30 PM with the help of a signal of a simple torch light on 13th February This was done by small Industries Service Institute, Ahmedabad. This incident proved that all parameters are suitable for promoting ship-breaking activities on a larger scale at Alang.

3 119 The Ferrous Scrap Corporation has sanctioned a loan of Rs.1.8 crores to Gujarat Maritime Board to construct 1100 meter long jetty upto 5.5 m. water depth below Chartdatum, at a location of 200 m. to the south of the existing ship-breaking yard at Alang and purchase of 350 BHP engine tug which can be berthed at this jetty. This tug will be used for personal access to ship imported for breaking while, they are waiting at anchorage to complete inspection by ship surveyors and custom officials. This tug will be used for personal access to ship imported for breaking while, they are waiting at anchorage to complete inspection by ship surveyors and custom officials. This scheme was planned to obviate the need to get a tug on hire for about 24 hours from the nearest tidal port of Bhavnagar port to Alang ancherage at the cost of ship-breakers of an amount of Rs.30,000. The first phase of the development of the Alang ship breaking yard took place during the period 1983 to During this period, 63 plots were developed, out of which 42 plots were small and having the breaking capacity of 65 LDT per day and 21 large plots of each having the capacity of 120 LDT. In 1989, Gujarat Maritime Board (GMB) announced a programme to develop additional 100 plots on the shore line of Sosiya village just to north of the existing Alang yard with 63 plots. These new 100 plots of each was having 65 LDT breaking capacity per day. Upto , a total of 179 plots were established. Table 4.7 illustrates the progress of ship-breaking activity at Alang since as well as graph 4.A gives the picture about the trends of shipbreaking activity at Alang. It is seen that during the year total of 5 ships were broken at Alang and the average outpputwas 50 LDT and is quite negligible as itwas the beginning of shipbreaking activity at Alang. Only five very small sized ships were broken. But, since and , the average ships broken in LDT recorded to 5000 and 5,400 respectively. This rise continued till the year Afterwards, a sudden decline in the ship-breaking activity was noticed till the year Again this rising trend was observed till the year Thereafter, the years to noticed a fall in the trend. Since , a considerably rising trend was noticed in the shipbreaking activities of Alang ship-breaking yard. Similarly, a rising trend in the number of ships broken at Alang was noticed except for the years ,

4 and respectively. Thus, during the period to the percentage rise in the LDT of ship broken at Alang and Sosiya ship-breaking yards recorded to 1057 percent and at the same time the growth of the average size of the ships were broken estimated to 184 per cent respectively. The rise in the large sized ship for breaking is on account of the cost advantage involved in the breaking of large sized ships. Alang and Sosiya ship-breaking yards break all types of ships. 120 Among the ships broken till , cargo carriers constitute the maximum, that is 41.8 per cent followed by tankers per cent, bulk carriers 5.82 per cent and about percent respectively. As far as percentage share of tonnage, tankers 47.4 per cent followed by Cargo Carriers per cent, Bulk Crriers per cent and others 9.33 per cent respectively. Table 4.1 Ship Broken in Alang-sosiya Yard Year Total No.of Average Total ship ships ship LDT broken in lakh Source: Gujarat Ship-breakers' Association, Bhavnagar LDT

5 4.1 Graphical representation of the ship-breaking at Alang and Sosiya I "' I "'-J \ I t, '" 'I I- ~..J c: c:: (I) ex- 0 ~ -'" CL :..c: cr.) I!'... =~ >-' N >-' o I~.,.,.,,.,,.,,. a _--,-19~J~f;'Lf ~5 'O-b 'i l :<6 f;tj qd 91 -qt, 9~4--9!L3C...!J"f--W 'l.q--o-o-o-l---.ll~

6 122 Table 4.2 Development of Ancillary Activities in Bhavnagar District due to ship-breaking Activity During 1991 to 1996 Sr S Activity No.of Units Percentage increase! decrease Re-rolling mills 30 SO 167 Oxygen Plants Trading of c.r Furnace Oil Refineries LPG Refilling Plants Wooden Scrap Units Equipment & Materials suppliers Electric devices (motor, generator etc.) Small Scale Industry in non-ferrous metal Crane Depot Weigh Bridges Truck Transportation 150 SOO 433 Taxies Miscellaneous Source: Gujarat Maritime Board

7 Ancilliary Industrial Impact of Ship-breaking Yard of Alang and Sosiya The Ship-breaking activity both at Alang and 50siya promoted the industrial activity in organised and unorganised industrial activities. Table 4.2 shows the development of ancilliary industrial activities in Bhavnagar district. It is revealed from the table that, ancilliary industrial activities developed at Alang, Bhavnagar, 5ihor, Palitana, Mansa etc. on account of the scraps of Alang. These activities were increased from 100 to 550 per cent during a period of five years. Besides, many activities related to ship-breaking developed at J amnagar and Rajkot districts too and these districts received recognition for producing brass articles and parts in Gujarat. Gujarat Maritime Board also developed plots for ancilliary activities at Alang like oxygen depots, crane depots, repairing shops, weigh bridges, restaurants, provision shops etc. GMB also have provided some infrastructural facilities for telephone exchange, custom office, Red Cross dispensary, police station, sanitation unit, internal roads, water supply and administrative offices etc. Besides, not only in Gujarat but in Punjab, Hariyana, Rajasthan, M.P. and Tamil Nadu were also developed re-rolling mills based on the ship scrap from Alang yard. 4.4 Employment Generation The ship-breaking activity at Alang and 50siya directly generated 1.25 lakh employment. Out of this 25,000 are the self employment generation. Other than this employment is generated in the relative activities too. 50 far, 150 units in the down stream of ship-breaking, developed at Bhavnagar district and the total investment in the same is estimated to Rs.100 crores. The employment generation in these units are estimated to 6000 persons. Besides, about 300 scrap trading units are in operation, consisting of an investment generation of Rs.25 crores and the resultant employment generation is of 1200 persons. Over and above, 600 service sector units are also operating in Bhavnagar district and the total investment generation in the same of Rs.50 crores and the people working in the service sector is estimated to 2400 persons. Above all, the employment generated in GMB, Excise, Customs and financial and tele communication sectors too.

8 124 On account of the ship-breaking activity in the region, daily about 750 vehicles, out of which 600 h'ucks and 100 tractors and 50 rickshaws are plying and the total employment generation in the transport sector is of about2650 persons daily. In short, due to the development of ship-breaking activity at Alang both employment and investment generation took place both in backward and foreward linkage sector not only in Bhavnagar, but at national level also. 4.5 Alang's Economic Contribution to the Exchequers Alang Ship-breaking yard substantially contributed to the Union Government by way of custom duties too. During the year , it was contributed Rs crores by way of custom duty to the Central Government, increased to Rs crores in , showing a percentage rise of 405 percent and in the year it was recorded to Rs crores showing a percentage increase of 478 percent. In total from the year of its inception to the year , Alang was remitted Rs crores to central exchequers as custom duty. 4.6 Revenue to the State Government The State Government receives income through sales tax from these activities. But, it is very difficult to arrive at a precise figure of the revenue collected by the State Government in the form of sales tax. The figure of sales tax collection is likely to be quite high if we take into account such collection from the trading activity related to Alang's material. For exam pie, more than 300 scrap merchants (Khadawalas) buy cabin materials from ship-breakers and sell it and for this, they have to pay sales tax. Down stream industries like re-rolling and oxygen manufacturing also pay sales tax to the State Government. Alang also pays Central Sales Tax when ship scrap is sold out of the state. Besides, Gujarat Maritime Board is also receiving income for beaching of the ships and rent for the plots. In short, during a period 17 years, ship-breaking activities of Alang and Sosiya yards significantly increased and as a result Bhavnagar district, Gujarat and the nation received many economic advantage in terms of employment generation, investment generation, income generation both at Government and non- Govern-

9 125 mental sectors. Beside infrastructural development both economic and social also took place in Bhavnagar district especially at Bhavnagar city and the areas near by Alang. However, many problems are faced by these units. Chapter 5 discusses about the problems faced by the ship-breaking units in the region.