Private shipyards sail towards govt for salvaging

NEW DELHI: Battling rough weather, private shipyards have urged the government to place orders with them under 'Make in India' initiative as it has been doing with private players in the US, Italy and Russia.

According to Shipyards Association of India (SAI), private shipyards are under stress due to "lack of support by the government", effecting over 11.5 lakh families on account of loss of jobs.

It said shipyards invested Rs 20,000 crore between 2002 and 2007 which should have resulted in Rs 2.22 lakh crore worth of investment downstream, but "lack of support by the government has resulted in their sinking".

"If the government can place orders with foreign private shipyards, be it in the US, Italy or Russia, why can't it place orders with Indian private shipyards.

"Why is it that when it comes to build in India then it will only go to the public sector. Are we not Indians?" questioned SAI President V Kumar.

Addressing media he said the private shipyards have demonstrated world-class quality and workmanship.

He said the condition of private shipyards was such that L&T was working at 25 per cent capacity, Reliance Pipavav at 10-12 per cent capacity, Bharti at five per cent capacity, despite creating huge assets.

"These assets will go waste, but if these shipyards are given work it can create livelihood for 15 lakh people," he said.

Senior representatives of SAI met Shipping Minister Nitin Gadkari apprising him of the concerns of the private shipbuilding industry, a statement from SAI said.

"They urged the minister to create an atmosphere of inclusive growth between the public and private sector companies operating in this field," the statement said.

SAI appealed to the minister for a speedy resolution of critical areas of concern and sought a level playing field between the PSUS and private shipyards.

"The government is directing and awarding most of its orders today to public sector shipyards (worth around Rs 2 lakh crore).

"Given present capacities, this would mean that the ships will be delivered in about 20 years, leading to security vulnerability. A case in point is two major private shipyards shutting down and other major shipyards being financially stressed, it said.

SAI also rued that banks were being extremely nonsupportive to the shipbuilding industry, without realising the typical nature of this business, which requires high working capital as well as longer business cycles for completion of ship construction.

Their other demands included prohibiting restrictive trade practice for awarding of contracts across all government agencies, structured effort to build ships in India rather than buying ships from abroad and flagging in India.

SAI is an association of over 20 private shipyards to promote the cause of shipbuilding, ship repair and ship ancillary industries in the country.