The imposition of export duty of Rs300 per tonne in the recently submitted Union Budget is threatening to put Goa’s barge owners out of business.
Barge owners in the coastal state transport iron ore to ships waiting at Mormugao port that then feed the hungry steel mills in China.
In just 15 days since the duty was announced, the number of trips made by barges has dwindled. From 10-15 trips in a fortnight, it has come down to four to five, according to Atul V. Jadhav, managing director, New Era Shipping Ltd and president of the Goa Barge Owners Association. “Very soon, we will be out of business,” Jadhav says.
Goa exports about 36 million tonnes of iron ore out of India’s total ore exports of 100 million tonnes. The barge owners are paid Rs59 per tonne per trip, by ore exporters such as Sesa Goa, Chowgule, Dempo and Timblo as per an agreement between the Goa Barge Owners Association and the Goa Mineral Ore Exporters Association.
The current rates were fixed assuming each barge would be making a minimum of 150 trips in a year to cater to the booming Chinese demand. “But we now expect to make only half that number, or 80, trips,” Jadhav told Mint.
About 250 barges ply along the Goa coast carrying iron ore to waiting ships.
During the last three years, owners have acquired 100 big barges investing Rs350 crore after China started to buy higher quantities of the commodity.
The investment was financed with Rs250 crore of bank loan that have to be repaid in five years.
About 4,000 people are dependent on this industry for their sustenance.
“We will not be able to repay the loan and pay wages to workers if the situation continues,” he says. The association has, therefore, submitted a representation to the Union government to remove the proposed levy.
Iron ore traffic has helped Goa emerge as the leading state in terms of carriage of cargo through inland water and coastal transport in the country.
Goa accounts for 80% of the total cargo carried through these modes.