Bangalore: Some Indian shipbuilders that also own ships are lobbying for a rule stipulating that the country’s oil and gas explorers only hire offshore support vessels that have been made and registered locally.
The issue was discussed last week at a board meeting of lobby group Indian National Shipowners’ Association (Insa), at least two persons who attended the meeting said on condition of anonymity.
The Shipyards Association of India, a group representing India’s private sector shipbuilders, has sought support from Insa on this plan, a spokesman for the association said. He did not offer further details.
Currently, rules mandate that oil explorers give preference to India-registered ships. The norms are silent on where these support vessels are manufactured. Most India-registered exploration support vessels owned by local fleet owners such as Great Eastern Shipping Co. Ltd, Varun Shipping Co. Ltd and Garware Offshore Services Ltd have been built at yards outside India.
Shipbuilders such as ABG Shipyard Ltd and Bharati Shipyard Ltd will gain from the proposed rule as it will bring them orders for constructing ships required for supporting offshore oil and gas exploration activities, apart from being able to deploy them in coastal trade. ABG, India’s top private shipbuilder, has ventured into ship owning by setting up PFS Shipping (India) Ltd.
“It’s too early to press for that policy,” said an Insa board member who attended the 20 May meeting. “If the policy goes through, then all those ship owning companies having shipbuilding yards also will build ships only for themselves and take over the coastal business,” he said, requesting anonymity because the discussions are confidential.
Insa board was of the view that the law on coastal trade was not getting properly implemented. “Even when Indian vessels are available, foreign ships are being hired to operate along the coast,” said another board member. He, too, declined to be named.
The shipping ministry is only looking at supporting the shipbuilding industry, whereas shipowners are not getting cargo support, he said. “We should find a via media on this issue to see how both the industries can prosper,” he said, adding that Insa would take up the issue again for discussion.
If framed, the new rule will replicate similar laws in other maritime nations. In the US, coastal trade is reserved for ships that are built at local yards, owned by US citizens, registered in the US and crewed by US nationals.