Shipbuilding: It's Now or Never
The Economic Times, July 24, 2006
Despite obvious advantageous, India lags behind in an area where it prospered once. The time is ripe, says the author
India has a history of shipbuilding that stretches back to the Harrapan civilization [approximately 2500BC]. The 'modern era' began with the building of a dry dock at Bombay about 1750; the second was erected in Calcutta around 1780. During the 19th century, the industry was in a period of expansion and prosperity. However, for the last 100 years, the yards have been in a state of general decline, especially with regard to new construction. At present, the Indian yards build very few vessels for export and supply less than 10 percent of local shipping industry needs.
India, as we know has the necessary requisites to build up the infrastructure for major shipbuilding: Our vast coastline is a boon; Land topography along the coast could be exploited to build first class shipyards; Availability of cheap, skilled labour could contribute to building economical ships. English speaking work force; Easy availability of material; We produce our own steel; Availability of shipbuilding and skilled professionals, eventhough they now work abroad.
Despite the huge advantages as listed above, there are reasons why we do not develop and think on the lines of major shipbuilding countries. This include heavy bureaucracy, corruption and red tapism which could kill the initiative. Many prospective foreign collaborators are scared to venture into and are getting caught in the vicious web initial investments are very huge and returns not so fantastic in the short run - this scares the investors.
At present, registered fleet consists of about 500 ships, totaling approximately 7 million gross registered tonnage [GRT]. Indian fleet's average age is 18 years, and appears to be physically mismatched with the market needs. For example, there is a shortage of container vessels for the current and projected cargo movements. Add to this, port infrastructure that is not capable of handling huge volumes of cargo logistics.
Less than 10 per cent of Indian-flag vessels have been built in Indian shipyards. The major reasons cited for this low rate are: higher costs and delays in delivery time. It was also pointed out that Indian shipyards have not developed standard designs that give them the ability to quickly respond to customer requirements.
The drawbacks could be summarized as 1lack of new investments in machinery and equipment deterioration of existing machinery and equipment, use of obsolete methods and systems, lack of suitable training for upgradation of skills, life emphasis on professional management techniques, supply bottlenecks for raw materials and spares, over dependence on public sector cumbersome government procedures and extremely low labor productivity.
It is a pity when you see countries like Sri Lanka and Taiwan are cashing in on the shipping boom, while an economically growing giant like our country lags behind.
The need of the hour essentially is investing in shipbuilding. It is sad to see a country like ours wasting a golden opportunity, especially when the world shipbuilding is riding an all-time boom. Therefore, the punch line for our administration could be "Its now or never".
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