Thursday, 7 January 2010

India clamps down on single hulled tankers.

India has joined the growing group of nations that do not want old and therefore less safe single hull tankers in their waters: the Indian Government has decided not to extend the special exemption granted to Indian tankers registered after December 31, 2009.

Industry watchers say that at least part of the move, announced out by the Directorate General of Shipping in a circular last week, is meant to stop the possibility of single hulled tankers being imported and registered in India. Many countries including China have banned these ships from their waters starting this year, sending their prices crashing to almost scrap rates and raising fears that these would be dumped on countries like India where they would pose an environmental risk; in fact, the DGS circular acknowledges these concerns. Indian shipping companies are not far behind the Government: SCI is considering conversion of some single hull ships and private players Great Eastern Shipping says that it is considering a fleet age limit of 25 years to phase out its single hull ships. SCI has about ten of these single hull vessels, having previously sold five. It is estimated that close to seventy five single hulled Indian tankers will need to be replaced by 2015.

The Directorate General of Shipping circular says that the special exemption for Indian single hull tankers shall only apply to such tankers registered before December 31, 2009. “However, applications for registration of single hull tankers pending on the date of this circular will be processed and will be governed as per the existing guidelines/circulars,” it clarifies. This circular therefore puts a caveat on the 2005 DGS circular that had the administration granting permission to Indian single hull tankers to operate beyond their phase out dates.

The Indian National Shipowners Association (INSA) had represented to the Government of India that foreigners had been trying to take advantage of the relative relaxation of IMO regulations by India as compared, so far, to other countries in the region. “We have been asking for measures to prevent dumping of unsafe tankers into Indian waters. Since 100 per cent FDI is allowed in shipping, bringing in foreign tonnage is easier,” said Mr. S. Ranganekar, CEO of the Indian National Shipowners Association, talking to the media.

Although cabotage regulations give Indian shipping the first right of refusal for domestic or coastal cargoes, these rules are often circumvented by oil companies citing unsuitability of tonnage available. The last few months had seen hectic activity by some operators trying to get single hulled tankers into the Indian market on such pretexts; the decision by the Government therefore seems to be a timely step in the right direction.


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