India´s population, which is one-sixth of that of the world, will continue to drive demand for more railways, airlines, deeper ports, power, water, roads, and oil and gas for satisfying the basic necessities of life. This by itself translates to sea trade indirectly. Merchant ships and warships will therefore remain a continuous necessity.
What has prevailed in the last 1000 years is not going to change in the foreseeable future. Merchant ships will continue to be the major means of trade across the oceans of the world. Warships will continue to provide international maritime security, keeping our sea lanes of communication safe and navigable for calm and peaceful trade.
So, why can´t we build all the ships we need in India for the future in our own country. We had a glorious shipbuilding history, though the skills vanished to a large extent during the British rule. What is to be done now, who is to do what, where and when? Should we follow somebody´s example and if so, why? Briefly, during the period 2005 to 2009, there was a shipbuilding boom in India. Our world market share went up from 0.2 per cent to 1.2 per cent in a short time. Ships built in India at international prices were exported to many countries, including Norway, USA, and Netherlands. New capacities were planned and built both by public and private shipyards. We thought at that time that shipbuilding had arrived in India.
However, at present, most private shipyards in India are in a financial mess calling for capital debt restructuring. Heavy capital investment in capacity, closure of subsidy scheme, and cancellation of many speculative orders by ship owners made during the boom period are some of the reasons. The methodology employed by banks to recover debt by tightening cash flow will lead to further losses as the problem lies elsewhere- designs ordered originally are not being checked. It is indeed a tough call as the ships eventually delivered may not be required by the owners or the market. The alternative that naval and coast guard orders will revive Indian shipbuilding has not succeeded for variety of reasons. Naval ships require more experience and skill, close coordination with design and approval process which runs concurrently with the project. Ignoring these factors and treating it like a commercial project where the design is largely frozen, leads to an underquote that is then unviable to deliver. Navy´s specifications are inherently difficult in nature due to clash between class, naval standards as well as in-house naval norms and practices.
So, the scenario is clear. What do we do now to go ahead and make ships in India that are required in the future? We definitely need a sustainable order book position to begin with. It can be based on the following policies that can be declared by the government and will not be changed by any new government or state government. Targets for the future to come within the ´ Make in India´ objective that can revive Indian Shipbuilding, could be:
1.Indian flagged vessels only, must carry a minimum of 40 per cent of Indian EXIM cargo. These Indian flagged vessels must be built in India. This singular move will create huge employment opportunities and unprecedented growth in downstream industries will take place.
2.All coastal and inland cargo must also be carried by Indian-built and Indian-flagged vessels only. All Indian built vessels, flagged in India, must be repaired and maintained in India only, including its eventual recycling.
3.Develop, design, build and maintain a fleet of dredgers useful in Indian conditions, ports and channels. These can be owned by the government as there are security issues involved.
4.Set up industrial parks that manufacture and supply all types of Shipbuilding materials and equipment for the above objective.
5.Open up and organise maritime institutes, colleges and universities to meet the above objective. Channelise R&D expenditure to suit the requirement. 6.Protect and Support the Indian sailor/seaman. He is the hero whose experiences will drive ship designs for the next century.
7.Decontrol the maritime environment to match global practices of front line maritime states to enable faster growth and ensure it is handled by professionals. Prevent five year plans from dictating shipbuilding strategy.
So, how do the above policies drive the campaign to ´Make in India´ sustainable? We continue with our current practice of building and repairing naval and coast guard ships in India. In addition, we need a way ahead, based on the future of shipbuilding, as it is generally taking shape across the world. The status of shipbuilding in the world, which will determine the future, can be summarised as, shipbuilding capacity has been built up and the world does not need it. The issues are naval shipbuilding in India, ship safety, environment friendliness, port development, and climate change. Future does not need more ships but more energy-efficient and environmentally safe ships. So, shipbuilding demand will be driven by new regulations and scrapping. Old reasons (boom and volume) based on which investments were made in the sector will not hold good. Co-operation between shipyards, ship owners, OEMs, and regulators will be the key.
So now that we have policies and an order book, and a sustainable way ahead, let us formulate a strategy to drive it forward. Design, both basic and detailed is central to shipbuilding, be it merchant or naval. Our strategy should be to learn to design first. Sustainable design practice should include not only technical issues, but also marketing, economics, and production across the entire supply chain. Design must cover all aspects of the product, including concept and basic design, detailed engineering and development weaving in operational experience, ergonomics, maintenance, and most importantly, recycling in an environment friendly manner. Committed, competent, and personnel skilled with relevant technology, with the ability to work in groups and having good communication skills remain the bottom line. Our educational and research institutes must realign themselves to match these requirements. Unless we know how to design a ship totally, understand the design well, we will never be able to build it.
Make in India will therefore mean that we initially build up competent design teams to execute different type of designs. Shipbuilding institutes are to be established, which teach the basics of shipbuilding and how to run a shipyard. We will then execute shipbuilding projects that serve a national purpose. Research and development will be channelled to meet national needs in shipbuilding.
Industries in India who currently manufacture various types of machinery need to understand and generate the necessary modifications to meet naval and specific marine requirements and establish synergy between design teams, ship owners, and equipment suppliers, so that they work on a common platform. This will enable long term and sustainable growth and provide productive employment across all branches of engineering. This will be the key to revival of shipbuilding.
The article has been authored by Cmde M Jitendran, part-time Director, Garden reach Shipbuilders and Engineers. Earlier, he was the Chief Executive Officer of Pipavav Shipyard Ltd.