Undue Delay: Policy Gap Keeps Gujarat’s Ship Recycling Hub At Bay

Due to the absence of clear policies, no new players can establish businesses in the ship recycling sector. The industry currently faces financial, environmental, social, global standards, and legal challenges.

Alang-Sosiya in Gujarat hosts the world’s largest ship-breaking yard, with a total capacity of about 4.5 million light displacement tonnage (LDT). It has plans to expand to 9 million LDT. However, in the financial year 2024, only 125 ships were dismantled.

A senior official of the Gujarat Maritime Board (GMB) stated that the board recently issued new regulations, including a minimum LDT for dismantling, bank guarantee-security deposits for recycling charges, and strict rules for plot usage. Environmental clearance has also been granted for a yard in Mundra, where ships up to 80,000 DWT can be dismantled. Several private companies are operating with modern environmental facilities.

The state government has increased plot lease terms for Alang industries from five to ten years and provided a relief package of ₹28 crore. Training projects under the Sagarmala scheme have also been included. Despite these measures, the ship recycling sector remains in a challenging situation. Rajya Sabha MP Shaktisinh Gohil said, “To save the Alang industry and revive ship recycling, the state government must announce a ship-breaking policy; otherwise, like Alok Ashdown, this industry too will vanish.”

Need For Regulatory Reforms

Ramesh Mendpara, vice president, Ship Recycling Industries Association, said, “The decade-old regulations issued by the state government should be updated with long-term considerations.” Harish Parmar, secretary, Alang Ship Recycling Association, said that in the absence of necessary policies and amid global geopolitical tensions, there are no signs of improvement for Alang’s industry.

Declining Activity In Alang

Due to the lack of policies, the number of ships arriving at Alang’s ship-breaking yard has steadily declined. Between 2014-15 and 2016-17, a total of 783 ships arrived, creating a vibrant environment. Over time, various factors have impacted the industry and, in the last five years, only 539 ships could be handled.

Shortcomings In Ship Recycling Regulations:

• Lack of bank guarantees and deposits
• Unresolved pollution issues
• Non-compliance with national laws
• Increase in charges has caused dissatisfaction among ship-breakers
• Workers are not receiving proper training
• Fixed charges must be paid even when plots remain idle due to low demand
• Slow implementation of capacity expansion and new projects

Challenges Facing The Ship Recycling Industry:

• Global market downturns are impacting high shipping rates
• Rent charged by GMB for yards has increased by 1.5 times
• Ships contain hazardous materials such as asbestos, heavy metals, and oil sludge
• Ship-breaking activities contribute to marine and coastal pollution
• Worker safety issues, with 16% suffering serious illnesses according to studies
• Lack of medical facilities and worker housing
• Alang yards have not yet met Hong Kong Convention standards
• Difficulty in the inclusion of Alang in EU-approved lists

Experts’ Recommendations For Improvement:

• Adoption of environment-friendly technologies, such as automation and solid waste management, to help Alang yards obtain green certification
• Implementation of medical facilities, housing, and social security measures to improve worker welfare
• Strict compliance with the Hong Kong Convention and EU standards to make Alang yards globally recognised

Number Of Ships Arriving In The Last Five Years:

• 2020-21 – 139
• 2021-22 – 152
• 2022-23 – 131
• 2023-24 – 125
• 2024-25 – 113