The government will allow sale of ship recycling credit notes if shipowners scrapping vessels in India are not keen on ordering ships at a local yard to get the benefit of the notes, a senior government official has said.

Besides, the credit notes accruing from recycling multiple ships can be bunched to order a bigger ship at an Indian yard.

"If a shipowner is selling couple of ships for recycling and he wants to aggregate the credit notes for buying a bigger ship, that is possible, that flexibility is built into it," R Lakshmanan, Joint Secretary, Ministry of Ports, Shipping and Waterways, said in response to a query from ET Infra at an industry event in Mumbai on September 25.

"In case, he has scrapped a vessel in India, but he is not intending to build in India, but somebody else wants to build in India, then he will be able to sell his credit note to the other person. So that whoever is building in India can utilise the credit note and get the benefit of it," Lakshmanan added.

A time limit (of three years) has also been put so that people utilise it within a reasonable timeframe.

The credit note scheme forms a significant part of the ?69,725 crore package approved by the Union Cabinet on September 24 to boost the shipbuilding industry.

Under the ship recycling credit note scheme, a credit note equivalent to 40 per cent of the scrap value of a ship being dismantled in an Indian ship recycling yard would be given to a fleet owner - both Indian and global -with the credit note being reimbursable against the cost of construction of a new vessel at an Indian yard.

With this credit note, the fleet owner can go to an Indian shipbuilder for ordering a new ship and get a rebate in the shipbuilding cost to the extent of the credit note value.

The government has budgeted ?4,001 crore for shipbreaking credit notes.

The credit note scheme will likely spur green ship recycling business in Gujarat's Alang- home to the world's longest stretch of ship breaking beaches as demand for retiring older ships grows with an estimated more than 50,000 ships to be built over the next couple of decades on the back of a global pivot towards green technology to cut emissions.

The credit note is thus expected to have a cascading impact on local ship building.

Source: ET Infra. Com 

#theshippingtribune #latestnews #shippingnews #dailynews #Maritimenews #shippingindustry #news #media #newsupdate #maritime #shippingnewsworldwide