For Indian shipping, 2013 began on a gloomy note. The country’s maritime administrator woke up on New Year Day to the news that the entire fleet of nine oil tankers of Pratibha Shipping were stranded at various ports in India and abroad and their crew were left without food and provisions for days.

On January 3, the Director General (DG) of Shipping convened an emergency meeting of representatives of the shipping company, seafarers unions, ship-owners association, port trusts, Coast Guard and other officials. The single-point agenda was how to reach food, provision and fuel to the stranded vessels — two in China, one in Bahrain and the rest in India — and to bring home the crew as early as possible. The DG Shipping wanted the stakeholders’ help to meet the expenses.

Precarious situation

Since the owners are broke and others, including ship-owners association, failed to commit financial support, seafarers unions — National Union of Seafarers of India (NUSI) and Maritime Union of India (MUI) — agreed to provide food and provisions and to ensure minimum men on board to maintain the vessels for a month.

“We are concerned over the safety of our men on board. We have agreed to reach them food and provisions and also finance their repatriation,” said Abdulgani Sarang, Secretary General of NUSI.

Efforts are still on to repatriate the crew, particularly from China, where two of the ships are reportedly held up in a dry dock for non-payment of bills.

Of the nine tankers, six were detained for non-payment of dues at various ports. Two are anchored 30 nautical miles off Mumbai and one off the Goa coast without any direction from the owners. The problem is that none of the vessels can sail now as they do not have valid insurance cover and their mandatory certificates have expired. All vessels are more than 25 years old and the condition on-board is said to be poor without any maintenance.

The Mumbai-based company, owned by A.N. Pawar and family since 2002, has been in the news as its tanker Pratibha Cauvery got grounded off Chennai coast last October, when cyclone Neelam hit Tamil Nadu. Subsequently, there have been several reports about non-payment of wages to crew, poor financial health of the company and the precarious condition of the vessels.

Collapse in the making

So, the collapse of Pratibha Shipping was not sudden, it was in the making. Hit by a weak freight market and lack of cargo support, Pratibha, has been facing a severe cash crunch for quite sometime now. According to unions, employees have not been paid salaries for five to six months.

The company, it is said, blames it all on the falling freight market. It is true that shipping industry globally has been facing a tough time with excess tonnage and weak demand. Companies in India and other countries have been reporting losses or lower profits for the past few quarters. There were cases of shipping lines filing for bankruptcy in the US and Europe. But in those cases the managements have acted on time to avert a crisis, and not put their crew and employees in jeopardy.

Pratibha’s was operating coastal services. In the good old days, the company’s vessels were employed by public sector oil companies. Some in the shipping circles believe that Pratibha’s fall started ever since it fell out of the cartel that controls the coastal movement of oil and petroleum products.

Management at fault

Unions, other ship-owners and shipping analysts feel that Pratibha management cannot absolve itself of the blame of bringing the company to the brink of collapse and abandoning the ships and crew. “They (the management) knew well what was happening; they could have done something before the situation went out of hand,” said a union official.

The moot question is — why did the DG Shipping, MMD and other authorities allow Pratibha shipping to reach the present dismal state. All stakeholders knew that the company was sinking; they failed to act on time.

Worse, the Shipping Minister and his officials, who discussed the development of maritime States in Mumbai last week, did not even bother to know what was being done to help the stranded crew. They were busy discussing the 25 port projects whose contracts had to be awarded.

Varun Shipping, another Mumbai-based company, is also in dire straits. The employees have not been paid regularly.

However, the company is understood to have got its bankers to restructure its loan and is trying to shore up operations.

Hit by prolonged recession and little support from the Government, there is already a sense of doom and gloom among Indian shipowners. The Pratibha episode could only deepen this depressing mood.

Woe-ridden

According to K.M. Sheth of Great Eastern Shipping, running an Indian-flag ship is now a nightmare. Besides adverse market conditions, what makes life miserable for domestic firms is the multiple levies.

Moreover, they have to compete with foreign lines — who pay no taxes in India — for the country’s own cargo.

The global economic slowdown has impacted shipping badly. Besides, shipping is a cyclical business. Tanker market has been facing the worst slump. Largest US tanker operator OSG was forced to file for bankruptcy. The situation in India is no different. While the freight market has been at its low, operating costs have soared. Companies are finding it difficult to keep their fleet afloat, said A R. Ramakrishnan of Essar Shipping.

India imports 70 per cent of its crude requirement and the volume of import is only going to go up with domestic production showing little improvement. So, there will continue to be demand for crude carriers. Yet, domestic tankers carry less than 17 per cent of the Indian oil cargo.

There have been talks about formulating a transport policy for the hydrocarbon sector to ensure that Indian cargo is carried by Indian bottoms. But the policy is still at the discussion level.

It’s a shame that national flag-carriers of a country with a long maritime history handle just less than 10 per cent of its own exim cargo. And, more pitiable is the fact that their share is shrinking year after year.

kurup.nk@thehindu.co.in

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