Productivity of Shipyards

Productivity of Shipyards

As regards mechanization and productivity levels of shipyards in the country, the Central Public Sector Shipyards, CSL is sufficiently mechanised and modernised on par with good quality medium size international standards. Defence Public Sector shipyards are sufficiently mechanised and comprehensive modernisation has been undertaken to augment their capacity. About HDPEL, Government of India has decided to restructure the shipyard through joint venture with private sector shipyards.

Some Indian shipyards in the private sector lack mechanization and have low productivity levels due to lack of shipbuilding orders resulting in lack of economies of scale and hence benefits from high mechanization; low financial resources ; lack of ancillary industry support leading to delays in procurement of requisite equipment; lack of established vendors/contractors for outsourcing for hull and outfitting works; lack of concurrent design, engineering and construction capabilities to factor in changing user requirements leading to wasted efforts and reduced productivity; lack of modular construction approach resulting in less productivity at difficult confined space.

Based on the recommendations of the High Power Steering Committee (HPSC), cruise shipping policy had been approved by the Government in June, 2008. The salient features of the policy include conducive fiscal regime, development of facilities at Ports and connectivity through rail, road transport, air and metro, quick completion of immigration formalities, hassle free customs clearance, etc. The steps taken to implement the policy include the following:

• Foreign flag vessels carrying passengers have been allowed to call at Indian ports for a period of 10 years with effect from February 6, 2009 without obtaining a license from Director General of Shipping.

• Cruise Terminals are being developed in Cochin, Chennai and Mormugao Ports with the financial assistance from Ministry of Tourism.

• Major ports are providing rebates to cruised vessels calling at their ports. Mumbai Port provide rebate of 40% on Vessel Related Charges (VRC). Chennai Port provide rebate of 20% on VRC while Cochin Port provide 20% on VRC for GT 30,000 and less and 30% on VRC for GT above 30,000. At Mormugao port 50% rebate is provided on Port dues & 70% on pilotage, berth hire & anchorage charges.

• Central Board of Excise & Customs (CBEC) has permitted Green Channel facility to all the international passengers who come onshore for tourism purposes and has also decided to permit Indian Nationals to travel from one Indian port to another Indian port in a foreign cruise ships/vessels during its domestic leg for tourism purposes.

The steps taken by the Government to rejuvenate the shipping industry in the country include the following:

• To bring parity in tax regime of Indian seafarers employed on Indian flag ships vis-à-vis those on foreign flag ships, the period of stay in India is to be counted as per the entries made in his Continuous Discharge Certificate (CDC).

• Government has exempted Customs and Central Excise duty on the bunker fuel used in Indian flag vessels for transportation of EXIM, empty and domestic containers between two or more ports in India. This tax incentive will enhance Indian tonnage as well as promote use of transshipment hubs in India.

• Service Tax incidence on coastal transportation has been brought at par with road and rail in the Union Budget 2015-2016. This has reduced cost of domestic transportation through coastal shipping for shipper and encouraged use of coastal shipping as a mode of transport.

• Indian flag vessels have been given Right of First Refusal (RoFR) by removing the earlier 10% price band with respect to L1 for operation in coastal waters. Similar benefit has been extended to Indian dredgers for undertaking dredging works in non-major ports. This would help Indian flag vessels as well as dredgers to get more business.

• Facility for online application for registration, chartering permission, Multi-modal Transport Operator license and for e-payment of requisite fee has been introduced.

• Registration process for Ship Repair Units dispensed with.

• To counter cost disadvantage vis-à-vis imported ships, Government of India, has, on November 24, 2015 exempted Customs and Central Excise duties on inputs used in shipbuilding.

• Financial assistance policy for Indian shipyards has been approved for ten years commencing from April 1, 2016. All government departments or agencies including CPSUs are being instructed to provide Right of First Refusal to Indian shipyards while procuring or repairing vessels.

• Institutional Mechanism on Infrastructure has recommended grant of Infrastructure Status to shipyards.

• To bring down the cost of construction of barges, river sea vessels and port and harbor crafts and to meet demand for steel by ship and barge builders, the Government has decided that re-rolled steel obtained from re-cycling yards/ship breaking units would be certified for use in construction of these vessels.

The Maritime Agenda 2010-2020 has identified steps required to upgrade port infrastructure to provide world class facilities.

The above information was given by Minister of State for Shipping Shri Pon Radhakrishnan in a written reply to a question in Lok Sabha today.