We are cautiously optimistic about a positive future

Vijay Arora, Technical Head, IRClass speaks at length on the challenges facing the Indian shipbuilding industry today, and the various governmental initiatives that promise to shore up the sector.

The shipping industry has been going through a tough phase in recent years. How has this impacted you?
At IRClass, in the last 12 months, we have seen growth in our top line. However, the global slump in oil prices, the dip in offshore productions, China´s slowdown, and India´s mining crisis, have inevitably resulted in pressure on industry revenue streams. Ship owners are either moving their vessels to greener pastures globally or are putting them on layup. This is especially true for small ship owners. We have seen quite a number of barge owners shifting vessels from Indian coastal waters to other countries in search of business.

The Government of India has initiated several measures to facilitate the growth of ship-owning and shipbuilding in India. India´s energy needs are growing significantly and the need to secure the supply chain is expected to bring about expansion in Indian tonnage. We are cautiously optimistic about a positive future.

What are your takeaways from the recent Maritime India Summit 2016 that was held in Mumbai?
The Maritime India Summit was a huge success in terms of international participation and initiatives by the government. This is the first time the government has provided such a significant thrust to the maritime sector.

The port-led development model will help create capacities and lead to development in coastal regions. We believe opportunities will open up for IRClass as a result of these initiatives as there will be a growing need for an independent, technically competent body for inspection and certification at various stages of projects.

Do we have the guidelines today for any class and category of vessel we want to build in the country?
The Government of India has notified the RSV Code, which proscribes Class and Statutory requirements for vessels plying in rivers as well as coastal waters. IRClass was a key contributor to the preparation of the Code and maintains rules for the construction and classification of all kinds of inland water vessels, including those built under the Code. Inland vessels will need to adhere to the statutory requirements of the state in which they operate.

At present, all RSVs in India are certified by IRClass on behalf of the Director General of Shipping. IRClass is poised to take in even more selective classification of inland vessels and river sea vessels built in India.

There is a project on NW2 (Brahmaputra) which envisages linkage all the way up to Bangladesh. What do we know about safety standards of the maritime industry of Bangladesh?
The governments of India and Bangladesh have entered into an agreement on allowed trade movement of vessels complying with the RSV Code. This has been made possible by the adoption of the RSV Code by both countries and this ensures same safety standards at both ends.

Bangladeshi yards are involved in the construction of RSVs and IRClass is working with them to ensure they gain valuable experience building such vessels to prescribed standards of safety.

What are the challenges that the Indian shipbuilding industry is facing today?
The Indian shipbuilding industry faces a number of challenges, for example:

• Lack of subsidies (the government has recently re-introduced the subsidy scheme for shipyards, hoping to see the results in a few years- time)
• High operating costs of coastal trade
• Availability of working capital
• Bank guarantee issues
• Customs and taxation on imports
• Multiple sets of levies and duties.

However, with the support of the government and the investment of time and expertise by the relevant competent bodies, India´s shipbuilding industry has the opportunity to flourish, even in the somewhat depressed global economic climate for the maritime sector, both in terms of domestic and international vessel construction.

What is the credibility that Indian yards have with international buyers and what kind of vessels are they able to manufacture?
Some Indian yards have a good reputation of building majority of vessel types, including tankers and bulk carriers, to good quality and standards. However, this question is best addressed to international owners.

What is the state of the active Indian-owned ships in service currently? How old are they and by when do they need to be replaced?
Active Indian tonnage has seen some growth in the past few years, although trade cycles and the global economic crisis, and its impact on the maritime industry across the world, accounts in large part for the slow speed of this growth. The total number of India-controlled tonnage operating currently is in the range of 1,650 to 1,750 ships, with total gross tonnage of approximately 15 million DWT, as per ´Clarksons´ data. The average age of vessels of India´s controlled tonnage is approximately 13 to 14 years according to our internal statistics.

While there is a huge thrust on the maritime sector, is there an equal and adequate thrust on certifying not just the vessels but the entire range of marine infrastructure that exists and proposed to be newly built?
IRClass offers a wide range of services, several of which are, as we characterise it, Beyond Class.
These include Technical Inspection and Certification for Ports, Material Handling Equipment, Offshore Installations, Management Systems Certification (ISO), Business Advisory Services (for example Energy Audits, Port Risk Assessment, Haz-op Studies), and of course the IRClass Academy, our department dedicated to skills and career development for maritime professionals.

IRClass, in conjunction with the Ministry of Shipping, is planning to open a Technology Research Institute for the Maritime Sector (TRIMS). This will assist in implementing the Sagarmala project via techno-commercial feasibility, design and engineering, systems implementation, and R&D. At IRClass, we forsee good things ahead for the maritime sector.