CHAPTER 4

GROWTH AND DEVELOPMENT OF SHIPBREAKING

ACTIVITIES AT ALANG AND SOSIYA

In this chapter, development of the ship-breaking yards of Alang and Sosiya

is highlighted. The points covered in this chapter are: (1) Background of ship-
breaking activities of Alang and Sosiya, (2) Growth of ship-breaking activities of both
Alang and Sosiya, (3) Alang's contribution to employment generation, and (4) its
contribution to Gujarat Maritime Board and both to state and national exchequers.

4.1 Background of Ship-breaking Activities of Alang and Sosiya

The background of the development of ship-breaking activity at Alang are as
follows:
(i) In Gujarat during the early part of 1980s, there was tremendous demand for
scrap for the innumerable foundries and rolling mills.
(ii) The Government of Gujarat adopted a policy in favour of ship-breaking
activity in the coast of Gujarat.
(iii) Ghosh-Mehta-Joshi Committee of the Small Scale Industries Service Institute
of Ahmedabad made a study on it and have observed that development
prospects for ship-breaking activity in India are promising.
(iv) On behalf of Gujarat Government, the Gujarat Maritime Board made an
intensive survey and identified Alang as the m;:)st ideal for developing ship-
breaking activity.
(v) Alang in the Gulf of Cambay and its anchorage have been considered as the
"protected" areas even during monsoon for ship-breaking.
(vi) Alang falls with in a district high tide zone where the highest tide rises upto
10 meters. This is considered to be the most favourable attribute when ship-
breaking activity is undertaking through beaching method. In this method,
the vessels bows forward during high tide and with the help of the full
propelling the vessel is beached.

117
 118
(vii) The coast of Alang is gently shoping and has a long dry approach area in
reaching upto vessel.
(viii) The approach road upto anchoring is silt free and anchorage is located at a
short distance.
(ix) The sea bed at Alang dries up very quickly during the ebb period and allows
easy accessibility for all kinds of material handling equipments.
(x) The silt free beach condition of Alang helps in maintaining its stable position
through out the process of ship-breaking.
(xi) Further, the Alang-Sosiya is free from any other claims for the competitive
uses like merchant shipping, fishing, salt works or acquaculture.
(xii) Alang is favoured with about 10 Krns dry belt end owe red with the above
attributes. This has made Alang the world's largest ship-breaking yard.

4.2 Growth and Development of Ship-breaking Activities

at Alang and Sosiya yards
Alang is a small village of about 5000 population. Before 1983, the village did
not have any identity. But today it is weI-known for ship-breaking. Alang is situated
on Gulf of Khambhat at latitude 21-24' N and longitude 72-12'E. The location of
Alang is shown in map 1 & 2. It is 45 Kms away from Bhavnagar city and 11 kms from
Trapaj Village of East-West 40°.
Till the beginningo£1980s, ship-breaking was mainly concentrated in Mumbai,
Kolkatta and Cochin. Gujarat has natural advantage of the longest coastal lines of
about 1600 Krns. and port facilities for international trade at Jamnagar, Porbandar
and Kandla. Having foreseen the potential, Government of India planned the
development of new locations at Gujarat, Andhra Pradesh, Kerala and Karnataka.
In Gujarat, Alang was identified as the most suitable site for ship-breaking activity.
The Alang ship-breaking yard came into existence in February 1983. The first
ship named Kota-Ionjong beached for breaking at 9.30 PM with the help of a signal
of a simple torch light on 13th February 1983. This was done by small Industries
Service Institute, Ahmedabad. This incident proved that all parameters are suitable
for promoting ship-breaking activities on a larger scale at Alang.
 119
The Ferrous Scrap Corporation has sanctioned a loan of Rs.1.8 crores to
Gujarat Maritime Board to construct 1100 meter long jetty upto 5.5 m. water depth
below Chartdatum, at a location of 200 m. to the south of the existing ship-breaking
yard at Alang and purchase of 350 BHP engine tug which can be berthed at this jetty.
This tug will be used for personal access to ship imported for breaking while, they
are waiting at anchorage to complete inspection by ship surveyors and custom
officials. This tug will be used for personal access to ship imported for breaking
while, they are waiting at anchorage to complete inspection by ship surveyors and
custom officials. This scheme was planned to obviate the need to get a tug on hire for
about 24 hours from the nearest tidal port of Bhavnagar port to Alang ancherage at
the cost of ship-breakers of an amount of Rs.30,000.
The first phase of the development of the Alang ship breaking yard took place
during the period 1983 to 1989. During this period, 63 plots were developed, out of
which 42 plots were small and having the breaking capacity of 65 LDT per day and
21 large plots of each having the capacity of 120 LDT. In 1989, Gujarat Maritime Board
(GMB) announced a programme to develop additional 100 plots on the shore line of
Sosiya village just to north of the existing Alang yard with 63 plots. These new 100
plots of each was having 65 LDT breaking capacity per day. Upto 1994-95, a total of
179 plots were established. Table 4.7 illustrates the progress of ship-breaking activity
at Alang since 1982-83 as well as graph 4.A gives the picture about the trends of ship-
breaking activity at Alang.
It is seen that during the year 1982-83 total of 5 ships were broken at Alang and
the average outpputwas 50 LDT and is quite negligible as itwas the beginning of ship-
breaking activity at Alang. Only five very small sized ships were broken. But, since
1983-84 and 1984-85, the average ships broken in LDT recorded to 5000 and 5,400
respectively. This rise continued till the year 1987-88. Afterwards, a sudden decline
in the ship-breaking activity was noticed till the year 1990-91. Again this rising trend
was observed till the year 1993-94. Thereafter, the years 1994-95 to 1995-96 noticed
a fall in the trend. Since 1996-97, a considerably rising trend was noticed in the ship-
breaking activities of Alang ship-breaking yard. Similarly, a rising trend in the
number of ships broken at Alang was noticed except for the years 1995-96, 1997-98
 120

and 1999-2000 respectively. Thus, during the period 1983-84 to 1999-2000 the percent-
age rise in the LDT of ship broken at Alang and Sosiya ship-breaking yards recorded
to 1057 percent and at the same time the growth of the average size of the ships were
broken estimated to 184 per cent respectively. The rise in the large sized ship for
breaking is on account of the cost advantage involved in the breaking of large sized
ships. Alang and Sosiya ship-breaking yards break all types of ships.
Among the ships broken till 1995-96, cargo carriers constitute the maximum,
that is 41.8 per cent followed by tankers 22.22 per cent, bulk carriers 5.82 per cent and
about 30.16 percent respectively. As far as percentage share of tonnage, tankers 47.4
per cent followed by Cargo Carriers 25.69 per cent, Bulk Crriers 17.54 per cent and
others 9.33 per cent respectively.
Table 4.1
Ship Broken in Alang-sosiya Yard

Year Total No.of Average Total ship

ships ship LDT broken in lakh
LDT
1982-83 5 50 0.0025
1983-84 51 5000 2.59
1984-85 42 5400 2.28
1985-86 84 6100 5.17
1986-87 61 6400 3.95
1987-88 38 6400 2.45
1988-89 48 5200 2.54
1989-90 82 5500 4.51
1990-91 104 5500 5.77
1991-92 86 6500 5.62
1992-93 137 6800 9.43
1993-94 175 7200 12.56
1994-95 301 7200 21.73
1995-96 183 6800 12.53
1996-97 348 7500 26.36
1997-98 347 7000 24.52
1998-99 361 8400 30.38
1999-2000 295 9200 27.38
2000-01 293 6603 19.34
2001-02 333 8189 27.27

Source: Gujarat Ship-breakers' Association, Bhavnagar

 4.1 Graphical representation of the ship-breaking at Alang and Sosiya

350000.----------------------------

300000 I "'-----1

250000 -t
I ,
,
"'-J
'" 'I
\ I

200000

I-
~
..J
150000
c:
c::
(I)
ex-
0~
-'"
CL 100000
:..c:
cr.)

50000 I !'..... =~
>-'
N
>-'

o I~ . , . , . , • • • • ,. , • • ,. , • • ,. a •• ••
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
_--,-19~J~f;'Lf ~5 'O-b 'i£l £:<6 f;tJ qD 91 -qt, 9~4--9!L3C...!J"f--W____'l.q--O-O-O-L---.ll~
 122

Table 4.2
Development of Ancillary Activities in Bhavnagar
District due to ship-breaking Activity
During 1991 to 1996

Sr. Activity No.of Units Percentage

1991 1996 increase! decrease

1. Re-rolling mills 30 SO 167

2. Oxygen Plants 20 130 550
3. Trading of c.r. 10 50 400
4. Furnace Oil Refineries 1 4 300
5. LPG Refilling Plants 0 4 400
6. Wooden Scrap Units 100 250 150
7. Equipment & Materials 10 50 400
suppliers
S. Electric devices 15 40 167
(motor, generator etc.)
9. Small Scale Industry 0 5 500
in non-ferrous metal
10. Crane Depot 1 4 300
11. Weigh Bridges 2 12 500
12. Truck Transportation 150 SOO 433
13. Taxies 200 400 100
14. Miscellaneous 500 1100 120

Source: Gujarat Maritime Board

 123

4.3 Ancilliary Industrial Impact of Ship-breaking Yard

of Alang and Sosiya
The Ship-breaking activity both at Alang and 50siya promoted the industrial
activity in organised and unorganised industrial activities. Table 4.2 shows the
development of ancilliary industrial activities in Bhavnagar district.
It is revealed from the table that, ancilliary industrial activities developed at
Alang, Bhavnagar, 5ihor, Palitana, Mansa etc. on account of the scraps of Alang.
These activities were increased from 100 to 550 per cent during a period of five years.
Besides, many activities related to ship-breaking developed at Jamnagar and Rajkot
districts too and these districts received recognition for producing brass articles and
parts in Gujarat. Gujarat Maritime Board also developed plots for ancilliary activities
at Alang like oxygen depots, crane depots, repairing shops, weigh bridges, restau-
rants, provision shops etc. GMB also have provided some infrastructural facilities for
telephone exchange, custom office, Red Cross dispensary, police station, sanitation
unit, internal roads, water supply and administrative offices etc. Besides, not only in
Gujarat but in Punjab, Hariyana, Rajasthan, M.P. and Tamil Nadu were also deve-
loped re-rolling mills based on the ship scrap from Alang yard.

4.4 Employment Generation

The ship-breaking activity at Alang and 50siya directly generated 1.25 lakh
employment. Out of this 25,000 are the self employment generation. Other than this
employment is generated in the relative activities too.
50 far, 150 units in the down stream of ship-breaking, developed at Bhavnagar
district and the total investment in the same is estimated to Rs.100 crores. The
employment generation in these units are estimated to 6000 persons. Besides, about
300 scrap trading units are in operation, consisting of an investment generation of
Rs.25 crores and the resultant employment generation is of 1200 persons. Over and
above, 600 service sector units are also operating in Bhavnagar district and the total
investment generation in the same of Rs.50 crores and the people working in the
service sector is estimated to 2400 persons. Above all, the employment generated in
GMB, Excise, Customs and financial and tele communication sectors too.
 124

On account of the ship-breaking activity in the region, daily about 750 vehicles,
out of which 600 h'ucks and 100 tractors and 50 rickshaws are plying and the total
employment generation in the transport sector is of about2650 persons daily. In short,
due to the development of ship-breaking activity at Alang both employment and
investment generation took place both in backward and foreward linkage sector not
only in Bhavnagar, but at national level also.

4.5 Alang's Economic Contribution to the Exchequers

Alang Ship-breaking yard substantially contributed to the Union Government
by way of custom duties too. During the year 1985-86, it was contributed Rs.63.96
crores by way of custom duty to the Central Government, increased to Rs.259.01
crores in 1996-97, showing a percentage rise of 405 percent and in the year 1999-2000
it was recorded to Rs. 305.15 crores showing a percentage increase of 478 percent. In
total from the year of its inception to the year 1999-2000, Alang was remitted
Rs.22973.83 crores to central exchequers as custom duty.

4.6 Revenue to the State Government

The State Government receives income through sales tax from these activi-
ties. But, it is very difficult to arrive at a precise figure of the revenue collected by the
State Government in the form of sales tax. The figure of sales tax collection is likely
to be quite high if we take into account such collection from the trading activity
related to Alang's material. For exam pie, more than 300 scrap merchants (Khadawalas)
buy cabin materials from ship-breakers and sell it and for this, they have to pay sales
tax. Down stream industries like re-rolling and oxygen manufacturing also pay sales
tax to the State Government. Alang also pays Central Sales Tax when ship scrap is sold
out of the state. Besides, Gujarat Maritime Board is also receiving income for beaching
of the ships and rent for the plots.
In short, during a period 17 years, ship-breaking activities of Alang and Sosiya
yards significantly increased and as a result Bhavnagar district, Gujarat and the
nation received many economic advantage in terms of employment generation,
investment generation, income generation both at Government and non- Govern-
 125

mental sectors. Beside infrastructural development both economic and social also
took place in Bhavnagar district especially at Bhavnagar city and the areas near by
Alang. However, many problems are faced by these units. Chapter 5 discusses about
the problems faced by the ship-breaking units in the region.