1. 22 20 November 2015VIEWPOINT
The Indian shipbreaking centre
of Alang is,depending on who you
speak to,either threatened by clo-
sure amid a wave of heavy losses
and bankruptcies or witnessing
its rebirth, led by a handful of for-
ward-thinking, environmentally
conscious entrepreneurs.
One thing is certain: a line in
the sand is being drawn between
the “concrete-ers” and the stuck-
in-the-mud brigade.
Priya Blue Industries, a plot
established in 1994 and run by
father-and-son team Sanjay and
Gaurav Mehta, is one of the more
forward-thinking pockets of
Alang, although it remains the
exception rather than the rule. A
sizeable backyard for clean cut-
ting and storage,and a building to
accommodate workers and man-
agement offices, are among the
features that sets it apart.
But most breakers still need per-
suading to upgrade their facilities
and their intransigence is in dan-
ger of overshadowing the progress
that is being made by some at the
the world’s largest ship-recycling
complex.
In an overview of recycling in
India, Bloomberg concluded: “Op-
erations have improved recently
in Alang but they’re nothing com-
pared with the quiet transforma-
tion of China’s shipbreaking in-
dustry.“
And Brussels-based pressure
group NGO Shipbreaking Platform
says that even though Priya Blue
and other yards have invested in
improvements to meet the Inter-
national Maritime Organization
(IMO)’s Hong Kong International
Convention for the Safe and En-
vironmentally Sound Recycling
of Ships (HKC), it added: “Whilst
the cementing of the secondary
cutting zones, installation of a
drainage system and improved
sorting of hazardous materials are
welcome developments at these
yards,concerns remain relating to
the dropping of blocks by the use
of gravity in the still unprotected
tidal zone.
“Also,workers’ rights issues and
downstream waste management
were most likely not subject to the
ClassNK certification, as this re-
mains outside the scope of of the
Hong Kong Convention.”
Japanese classification society
ClassNK has,following a gap anal-
ysis,recognised Priya Blue and RL
Kalthia as the first Alang yards
Aclearlinehas
beendrawnin
theAlangsand
The intransigence of beaching yards at the world’s largest ship-
recycling complex that still need persuading to upgrade their facilities
could spoil it for everyone, writes TradeWinds Events director
Jon Chaplin, who recently made an independent visit to Alang
►lEEla shIP
rECyClINg:
Hoping to win
SOC certification
from Class NK.
bring Indian yards to a standard
that complies with the HKC.
Following a recent public en-
dorsement by the Asian Ship-
owners Forum — an increasingly
influential trade body that repre-
sents owners from Japan, China,
Chinese Taipei, Hong Kong, Aus-
tralia,India and South Korea — RL
Kalthjia yard boss Chintan Kalthia
sees a major chunk of his future
business coming in future from
owners based in the Far East, al-
though he believes European own-
ers will ultimately be convinced to
use HKC-compliant yards as more
are upgraded with the help of spe-
cialist consultants such as Green
Ship Recycling (GSR), ClassNK
Consulting Service and Lilley
Maritime. Some evidence already
supports that claim. Despite the
well-publicised rejection of beach-
ing by the Norwegian Shipowners’
Association (NSA), the next vessel
to be recycled will be the 33,000-
dwt Bow Victor (built 1986), a Nor-
wegian chemical tanker.
Others clOse tO sOc
Shree Ram and Leela hope to re-
ceive their SOC certificates within
a matter of weeks. Shree Ram has
a long-term relationship with
Stolt-Nielsen, having recycled
around 20 of the owner’s vessels
over the years. At first glance, the
yard resembles a well-maintained
seaside park with trees,shrubbery
and benches — a far cry from the
image most have of shipbreaking
in Alang.
Leela managing director Kormal
Sharma’s business interests now
extend well beyond shipbreaking
andincludeownershipofaBhavna-
gar newspaper, Leela Diamonds,
which supplies high-end jewels to
famous Western brands, and the
construction of a local hotel.
hazardOus materials
As well as moves by the Japanese
government to improve recycling
standards in India for its owners’
ships, Kalthia believes its interest
also extends to Japan’s shipbuild-
ers, with new vessels now being
built with eventual demolition in
mind. He points to the relatively
small amount of hazardous waste
recovered from the most recent
2000-built capesize recycled at the
yard. “The last one had only 4.5
kilograms of asbestos containing
material.Only gaskets,” he said.
Vessels being beached at yards
with HKC-compliance certificates
compliant with the HKC, award-
ing them Statement of Compli-
ance (SOC) certificates .
Unfortunately, owners are not
flocking to open their wallets and
assist financially with upgrad-
ing of yards by sacrificing some of
the residual value of their vessels
and ensure Alang’s long-term sur-
vival — despite its critical role in
disposing of their end-of-life ton-
nage.
Conditions for the workforce in
Alang is tough by Western stand-
ards. A worker can expect to earn
between INR 200 to 300 ($3 to $4.5)
for a hot and dirty day’s work. For
the majority of shipbreakers in
Alang,a less rigorous approach to-
wards safety and environmental
control appears to be the norm,
with blocks sitting in the sand
where they fall and mounds of de-
bris to be picked over.
Incontrast,upgradedyardshave
showers, rest rooms, and in some
cases on-site “colonies” —hous-
ing,albeit basic,for the workforce.
Several have dedicated medical
rooms with doctors visiting twice
a week.General conditions within
the gates of HKC-compliant yards
compare favourably with living
conditions for the locals lining
the road between Bhavnagar and
Alang.
Priya Blue boasts of being the
larger of the two HKC-compliant
yards, having started preparing
for compliance by laying down
concrete in 2013.
Compared with the very basic
facilities of many Alang break-
ers, the site has eight winches,
potentially enabling it to handle
a VLCC and suezmax simultane-
ously,although,at the time of my-
visit, the yard had been empty for
three weeks. Well-known vessels
to be torched at Priya Blue have in-
cluded the tanker leviathan Jahre
Viking (ex-Seawise Giant,built 1979)
and the transatlantic liner-come-
cruisehip SS Norway (ex-France,
built 1960).An eclectic assortment
of memorabilia from these iconic
ships is tucked away in a backyard
storage shed and includes a blue
steel plate emblazoned with the
name Norway.
the cOst Of cOmpliance
The cost to recyclers of upgrading
a typical plot is between $100,000
and $120,000 and up to $160,000
for a larger plot, plus consultancy
fees of around $65,000.
Rahul Varma of Lilley Mari-
time, one of the consultants cur-
rently active in Alang, argues
that shipowners should share the
expense.“This is the point that all
Alang is making.If you want us to
improve,we will improve.But give
us a hand,” he said.
The cost does not appear pro-
hibitive given that a plot owner
could claw back the initial outlay
to achieve HKC compliance from
a single vessel sale if the owner/
cash buyer would accept $20 to $30
per ldt less for the ship.
However, stresses Varma, up-
grading is not a one-off expense
as it involves also ongoing invest-
ment in training, equipment and
concrete replacement.“It is a con-
tinous cost,” he said.
However, convincing shipown-
ers to shell out remains a distant
hope. Priya Blue’s Gaurav Mehta
estimates that only one or two
owners out of every 100 are will-
ing to “bite the bullet” and take a
hit of $20 to $30 per ldt on trans-
actions.
ClassNK has been working to
►gauraV MEhTa: Director of
Priya Blue Industries in Alang.
►rl KalThIa: One of two
plots at Alang that are now
HKC-compliant along with
Priya Blue Industries.
Photos: jON CHAPlIN

2. 20 November 2015 23viewpoint
As an example of the way a hand-
ful of Alang yards have sought
to counter criticism levelled at
beaching by pressure groups
such as Brussels-based NGO
Shipbreaking Platform, Priya
Blue’s site features segregated
areas for oily parts and machin-
ery, with a steam powered jet for
cleaning and dedicated drain-
age tanks to prevent oily water
seeping into the soil or sand.After
cleaning, the blocks are moved to
a “clean” area for further cutting.
Cranes are used for moving
blocks and steel plates around
the yard, which says it seeks to
clean as much as possible prior
to sections being cut and moved
onshore. Production (demolition)
is consequently longer for Hong
Kong Convention (HKC)-compli-
ant facilities, given the extra care
taken over where blocks fall,
cleaned and are cut into smaller
pieces.
“It may take us six to seven
months to break a VLCC,” said
Priya Blue director Gaurav Mehta.
This is around two months longer
than non-compliant rivals.
Mehta points to a tougher ap-
proach also now by the Gujarat
Pollution Control Board (GPCB).
“Nowadays, GPCB has become
so stringent, not like before. They
are really strict about it. You can’t
get cutting permission until the
oil is removed and the tanks are
clean.
“Any sand or sawdust used
in the cleaning process is put in
a proper bag and sent to Gepil
[the local incinerator and landfill
site].”
ExtracarEwithoilywatEr
►block cleaning:
Oily water is channelled
away into a holding tank
at this block cleaning
station at Shree Ram.
must be delivered with Inventory
of Hazardous Materials (IHM or
hazmat) certificates, meaning that
the disposal of hazmats can be ar-
ranged in advance,either at the lo-
cal incinerator and landfill site run
by Gujarat Enviro Protection and
Infrastructure Ltd (GEPIL) or fur-
ther afield,depending on the exact
nature of the material. The GEPIL
landfill has around 10years’ life left
before a new site will be needed.
However, Priya Blue director
Gaurav Metha laments the fact
that not all owners are willing
to fork out the relatively modest
sum of $15,000 to produce an IHM.
“There are some owners, they are
really rich, and they don’t give an
IHM,” said Metha.
Rahul Varma adds that recyclers
are not granted permission to start
cutting until the Gujarat Pollution
Control Board (GPCB) has verified
that the tanks are gas free,cleaned
and it is safe for “hot work”.
Future in doubt
But as of today, the majority of
shipbreakers inAlang remain to be
convinced that investing in imper-
meable flooring, segregated areas
for cutting,proper drainage,waste
handling and worker training will
pay dividends. One cash buyer
went further in his assessment of
the predicament facing Indian re-
cyclers, saying a “question mark”
hangs over Alang’s future.
Initial support for upgrading
from Ship Recycling Industries
(SRIA) leadership has waned as
breakers struggle to deal with
cheap Chinese steel-billet im-
ports, a sustained fall in the price
of scrap steel, a weakening rupee
and greater scrutiny of deals by
the financing banks — a combi-
nation of factors that has led to
bankruptcies and many plots sit-
ting idle. Local lending banks are
said to have set up an informal ad-
visory group of breakers to advise
on the viability of trades present-
ed for financing, with the aim of
avoiding more bankruptcies.
Meanwhile, ClassNK is said to
want to see how the HKC-compli-
ant yards perform before working
for others. Other members of the
International Association of Clas-
sification Societies (IACS), includ-
ing Rina and the Indian Register
of Shipping (IRS),are known to be
actively pitching for certification
work.
At least one of the HK-compli-
ant yards,RL Kalthia,will apply to
►close links with cash buyers: (From left) Vijay
Agrawal, chief operating officer (ship sales), Leela Broking
Agency; Komalkant Sharma, managing director, Leela
Group; and Shallendra C Bhardwaj, manager safety, health
and environment, Leela Ship Recycling.
►hard life: But
this worker at RL
Kalthia is one of
the lucky ones
compared with
yards that have not
upgraded.
join the European Union (EU) list
of approved yards, due to be pub-
lished by the end of 2016,although
an appeal through the courts, in
the event of rejection, is consid-
ered unlikely at this stage.
The yards who have achieved
HKC compliance, and the others
upgrading, believe they are doing
enough to earn a place on the EU
list but when pressed further, the
prospect of being excluded is met
with a resigned shrug. This is de-
spite, say the breakers, more own-
ers inspecting their facilities and
blue-chip names, encouraged by
ClassNK certification, now view-
ing Alang as a viable option.
Shared Feature
It must be noted that a common
characteristic of the handful of
yards that have obtained,or hope to
obtain,an SOC is their close links to
cash buyers. Leela, owned and run
by Komal Sharma,the brother of Dr
Anil Sharma of Global Marketing
Systems (GMS).RL Kalthia is close-
ly associated with Singapore-based
Wirana Shipping, Priya Blue with
Best Oasis, Shree Ram with NKD
Maritime, and JRD with Singa-
pore’s Ace Ship Recycling,whereas
Lucky Group is currently develop-
ing its own cash-buying arm.
Such cash buyers have identified
the potential long-term benefit of
being able to offer their shipowner
clients a green recycling option
beyond China,and the real reason
for their close association with
recyclers is that it allows them to
share with the breakers the “green
premium” paid by owners who re-
ceive a lower price per ldt.
(Trade­Winds­ Events­ organises­ the­
annual­ TradeWinds­ Ship­ Recycling­
Forum.)
►shree ram: Chetan Patel of Shree Ram (left), where
Stolt-Nielsen has been a long-time customer, and Akira
Aoyagi, chief adviser, ClassNK Consulting Service.