VITAL INDUSTRY UPDATES – 28/04/2015

April 28, 2015 12:13 pm Published by

Indian yards to demolish more vessels for scrap metal supply

INDIAN scrap yards are set to take the lead in demolition of ships—about 2,000 of which will be decommissioned globally this year—in a bid to meet the nation’s rising demand for iron and steel to be used in infrastructure development projects, industry experts said.

“The shipping market is weak and it is wise to replace older and inefficient vessels,” a delegate at SeaAsia said. The three-day conference and exhibition was held in Singapore from April 21-23.

The large volume of ship demolitions would benefit India as the country looks to boost supply of scrapped metal to meet the massive demand for iron and steel products from infrastructure development programmes.

Shipbreaking yards at Alang (Gujarat) have already demolished around 107 ships thus far this year, it is learnt.

“Local players expect Alang yards to break 330-350 ships this year. But outsiders are putting the number higher, given shipowners urgency to reduce the number of idle floaters for cost reasons.

Some of the ships being decommissioned are of younger age. Owners want to get rid of these due to higher cost of maintaining idle vessels, or as they are considered inefficient floaters.

 There is an oversupply of vessels and it would be a wise decision to replace older ships with the newly-built, cheaper, pollution free ones that comply with regulations for sailing into coastal areas of the US, according to analysts.

 

MoS highlights govt initiatives to promote ship repair industry

 The government has taken a number of initiatives to promote the ship repair industry in the country, highlighted the Minister of State for Shipping, Mr Pon Radhakrishnan, in a written reply in the Lok Sabha recently. These include:

* Service tax exemption, vide exemption Notification no. 14/2014-ST dated July 11, 2014, for repair of foreign-going vessels by Indian shipyards, to reduce operational costs of ship repair units

 * Government has dispensed with the requirement for registration of ship repair units with the Directorate-General (Shipping) in December 2014 to promote “Ease of Doing Business”.

 The Minister said that the ship repair industry in India has been unable to live up to its sizeable potential of about Rs 2,700 crore. He listed some of the major problems affecting the sector in the country:

  1. Lack of cheap and long-term financing as it does not enjoy infrastructure status
  2. Higher costs, especially for repair of domestic vessels, due to the prevalent tax regime

 iii. Complex Customs-bonding processes, leading to time delays and increase in cost overruns

 

 

 

 Jindal Steel & Power Ltd to invest Rs 20,000 cr to augment power business

Naveen Jindal-led JSPL is looking to invest about Rs 20,000 crore in its power business to take the generation capacity to 8,600 MW in the next five years.

“Jindal Steel & Power Ltd (JSPL) has planned an additional capacity of 3300 MW in Jharkhand and Andhra Pradesh with an investment of Rs 20,000 crore by 2020,” Group CEO and Managing Director Ravi Uppal told PTI in an interview.

 

The company’s present capacity is 5,300 MW including 3400 MW of its arm Jindal Power.

After successful commissioning of Tamnar expansion project in Chhattisgarh in record time “where we have achieved UMPP scale and created sort of benchmark”, the company is enthused about its power projects, Uppal said.

 

We have continued to look at renewing prospects, wherever it is. There are certain projects which are under evaluation. Basic idea is to actively expedite 2000 MW in Andhra Pradesh and 1300 MW in Jharkhand,” Uppal said.

The company last week has completed its 2,400-MW Tamnar expansion project in Chhattisgarh for about Rs 13,000 crore.

Asked how the company plans to secure raw material for the projects, Uppal said, “Fuel is the main issue. Once the fuel issue is resolved then this can move much faster.”

He said the company required an estimated 16.5 million tonnes (MT) of coal per annum to fuel both the projects and was actively evaluating options to secure supplies.

 

“If you take 3300 MW you need about 16.5 MT of coal. We are evaluating the options for imports or procuring the same from domestic sources. The one which is in Andhra Pradesh, that is on the coastline so we have to evaluate which makes more sense domestic coal or imported coal,” he said.

For the power plant in Godda in Jharkhand, the company is also evaluating the options available, he added.

 

Asked, how the company will fulfil its existing coal requirements for the present capacity that includes 3400 MW of Jindal Power, a subsidiary of JSPL, Uppal said, “We are trying to see how we can source it. We are looking at various options. Lot of it we are buying through auctions and importing. Part of it we also get through coal linkage.”

Earlier, he has said that the company is studying on the bidding of coal blocks for the next round of auctions.

 

The Coal Ministry had last month rejected the bids of JSPL and Balco for four blocks.

Jindal Power had emerged as successful bidder for Gare IV/2, Gare Palma IV/3 and Tara coal blocks, while Balco had successfully bid for Gare Palma IV/1 coal block.

The Nominated Authority, which re-examined the offers for these blocks found that there was no “conclusive proof” of collusion in bidding for mines involving JSPL. Later, JSPL moved Delhi High Court against Centre’s decision to cancel bids of coal blocks allocated to it.

On possible cartelisation by companies for grabbing mines, Uppal said the “matter is subjudice and it is not appropriate to make any comment.”

 

 

 

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This post was written by Atlantic Admin