- Weekend Business
- Stakeholders in ship building space look to tap into potential
Stakeholders in ship building space look to tap into potential
The ship building industry in Goa is looking for a way to move up the value chain. A one-day conference of the trade looked at ways and means to achieve their goals. AJIT JOHN was present and spoke to various participants to understand their concerns
Once there was mining that moved the economy but now there is only tourism. The number of tourists visiting the State is increasing every year but the attendant issues it raises evokes strong emotions. The business of constructing sailing vessels in the State has been ongoing for well over a couple of centuries ie from pre-Portuguese times. The mining industry in the State meant the ship building industry was focused on constructing barges. A one-day seminar on the ship building industry was conducted by CII.
Goa’s shipbuilding Industry is understated despite its performance and contribution to the State’s GDP, its prestigious projects and the sheer volume of business that it churns out quarter by quarter.
Suraj Dialani, business head, Vijai Marine Shipyard and president, Shipyards Association of Goa said the industry was thriving in the State with designers and the required expertise being available in the market. He however felt that it was important that the business get the status of an industry. He felt it was good that Indian companies now had the right to first refusal. It must he said be remembered that one horsepower could carry 4000 kg of weight on water and there nothing comparable on land which made it so much cheaper. An investment in this industry he said would have a multiplier effect with people with skillsets as diverse as welders to technical engineers being employed. He admitted to there being problems with the navy assessment being impractical.
Dialani said “They look at the ports in Cochin, Mumbai and then come to our operations and conclude that we cannot build the crafts. It is unfair on us. We have the expertise, give us the opportunity to show the worth.”
It had to be remembered he said that in the new GST regime, when one sold a ship the charge would be 5% but if and when one purchased parts of the ship it usually meant a payment of 18% GST. The financial assistance scheme application he said for projects under Rs 10 crore was unviable. While the public sector ship yards were nominated projects, the private sector had to pitch which made it rather unfair. The ambiguous rules for the construction of passenger ships did not help the industry. The president said the need of the hour in Goa was a maritime cluster which would enhance the competitiveness of the industry. This would mean a common facility for the manufacturing sector, provide employment, improve quality of products. It was time for the small to make the big difference. The country he ended by saying needed small shipyards and not big ones. He said “We need 100 shipyards in the Rs 10 crore range which will make a difference.”
The chief guest Dharmendra Sharma, Chief Secretary Govt of Goa said he intended to pitch for a multi nodal point in the mobility conference in Delhi to be held next month. With the right policy he said the industry would come into play. With regards to NGO’s creating a hassle in the State he said one would be surprised if they did not and it was important to be prepared for it.
Much heat was raised by Atreya Sawant, former CII Goa Chairman and Chairman, CII Western region Coastal Connectivity Task Force and Business Head, Atreya Engineering Works said the country’s share in the global business of ship building had dropped from 2% to 0.2 %. The rate of interest at which Indian companies took money was astronomical. Sawant said “A Korean company will take a loan on 2% while we will take it at 12% which puts us on the backfoot immediately. Now with Cabotage/Rofr removed it will kill the ship building industry. We will get second hard old vessels flagged in other countries with foreign crew resulting in a drop in local employment and Indian businessmen having to pay in dollars. We need Cabotage and its rules have to be made mandatory”.
The shipbuilding industry also presented issues and recommendations to the Govt. They wanted land at at Verna IDC to form a Maritime Cluster for Goan based Shipbuilders to have a common facility which will help them to be more economically competitive and improve their product quality. Every one person employed in a shipyard has a direct employment effect of 6.4 people in the ancillary industry. Similarly every Rs 1 crore in vested in a shipyard is Rs 11 crore in the ancillary units.
It was felt the Captain of ports to needs to adopt rules as per DG Shipping circular No 1 of 2015. Accordingly, vessels to comply model rules and not the State/territory rules. As long as the vessel is in compliance to model rules of IV for operating vessels in the inland corridor prepared by IWAI, and hold a valid registry, the other states should allow passage with 5 nautical miles from the base line.
A request was made for a dedicated jetty on the seaside of both the bridges on the river Mandovi and Zuari to undertake outfitting jobs for new coastal/ sea going ships built in Goa by the private sector.
The Govt should also undertake to build a jetty at Cortalim next to the new bridge on the seaward side, which will help shipbuilders to double their capacity of shipbuilding capacity, thus increasing employment for Goans. It was also important to dredge short patches in the river Mandovi and Zuari which would increase marine traffic with higher draft.
The participants felt govt should replace the two concrete spans of the two existing Mandovi bridge and Banastarim bridge to steel spans for increasing the air draft. It was also felt the Air draft for the proposed ropeway from Panjim to Reis Magos fort to be atleast 40 meters so that bigger vessels can be berthed at Panjim Port jetty in future. The high tension wire lines across the Banastarim river should be raised to a height for smooth and safe flow of marine traffic. A lot of jetties are proposed to be built under Sagarmala needs to be expedited. The building of the jetties should be on piles and not on floating cement pontoons.
The Immediate starting of the Old Goa jetty which is non-functional for the last five years, if required cement pontoons to be scraped and replaced with steel pontoons. The jetty can be put to use in less than 60 days. Finally the participants felt the wooden trawlers which are being used by the fishermen needs to be given incentives or offered low interest loan schemes for building of aluminium vessels (Aluminium or Fiber Glass Hull) which has operational efficiency. Thus saving on the diesel subsidy provided by the Govt.
There was a lot of talk but time will tell if it will lead to any concrete action.