The passage of Ship Recycling Bill, 2019 will help in doubling the ship recycling business in India over a period of two years, union minister of state for shipping (Independent Charge) Mansukh Mandaviya told CNBC-TV18 in an exclusive interview.

Currently, the country recycles around 300 ships in a year. The bill will make India’s ship recycling facilities compliant to international standards and paves the way for a safe and environment-friendly ship recycling process, Mandaviya added.

Here are some of the excerpts of the interview:

Q. How will Ship Recycling Bill 2019 benefit Indian shipping industry?

A. The bill will ensure environment-friendly recycling process of ships and adequate safety of the yard workers. Till now, this industry was regulated by a code which was developed on the guidelines passed by the Supreme Court in 2013. We have given constitutional status to this code in the Ship Recycling Bill. In 2009, a framework was developed for the safe and sound ship recycling process at the Hong Kong Convention. International Maritime Organisation then decided that ships will be sent for recycling to only those countries which adhere to the Hong Kong Convention. With this bill, India has adhered to Hong Kong Convention.

Currently, there are around 53,000 merchant ships in the world. Every year, nearly 1,000 ships need to be recycled. Out of these 1,000 ships, nearly 300 come to India. Nearly 99 percent of these 300 ships get recycled at 10-km-long ship-breaking yard at Alang in Gujarat due to its geographical advantages being near Gulf of Cambay.

So far, Japan, the US and countries across Europe have not sent ships for recycling to India directly. Now that India has adhered to Hong Kong Convention, these countries will be able to send ships directly to India. So far, Norway has promised that it will send around 40 ships for recycling annually to India if we adopt the Hong Kong Convention. Japan has also shown interest to give us more of its ship recycling business.

Recycling of ships will boost business and employment opportunities. 10 percent of the country’s secondary steel needs, as an outcome of recycling of ships, will be met in an eco-friendly manner. This will also boost re-rolling industries, which will further aid the furniture business and other downstream industries. Indirect employment will also increase from the current count of around 150,000-200,000 jobs.

Q. What is the growth target over the next 2-3 years?

A. 70 lakh gross tonnage is recycled in India, 68 lakh gross tonnage is recycled in Bangladesh, 37 lakh gross tonnage is recycled in Pakistan and 34 lakh gross tonnage is recycled in China. Out of our 131 breaking yards, 95 are in accordance with Hong Kong Convention, while the breaking yards of our nearest competitor Bangladesh will take time to be in par with Hong Kong Convention so we expect that some of their business will be diverted to India. While we have given a timeline of two years to all 131 breaking yards to be at par with Hong Kong Convention, we expect that the process will be completed in a period of one year.

We are hopeful that we should we able to double our ship recycling business in two years.

Q. You have often talked about the 'One Port One Sector' approach. Have you identified sectors which will be developed at various ports?

A. That will be developed on the basis of the natural opportunity of the port. For example, on Kandla port, 70 percent of wood or timber is imported so the entire region of Kutch is involved in furniture-related business so we will make a furniture park there. We are developing Petroleum, Chemicals and Petrochemicals Investment Region at Paradip. We will develop a tank farm at Mangalore as there are several refineries of oil companies. We will develop a tea park at Calcutta. Cochin and Tuticorin ports will be developed as transhipment hubs. We want to encash the natural opportunities available at the ports.