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"The age of the vessel is not the sole deciding criteria for vessel safety... it depends a lot on the continuous maintenance. Some single hull oil tankers are better maintained than double hull tankers," says an analyst.

New Delhi , July 15

THE Union Shipping Ministry may intervene to scrap the circular issued by the Directorate General of Shipping banning ageing foreign-flagged oil tankers from Indian waters following strong protests lodged by global tanker operators and domestic charterers.

"The Shipping Ministry has sought comments from the DG (Shipping) on reactions from tanker operators and charterers to its recent guidelines on in-chartering of foreign-flag oil tankers before taking a final view on the matter," Shipping industry sources said. The DG (Shipping) guidelines on in-chartering of foreign flag oil tankers to be followed by domestic charterers and oil terminal operators are scheduled to come into force from September 1.

The first to fire the salvo against the order was the International Association of Independent Tanker Owners (Intertanko), which said that the decision violated international law. The Intertanko Managing Director, Mr Peter Swift, has stated that the oil tanker body would challenge the ban at the meeting of the International Maritime Organisation (IMO) slated to be held this week. Mr Swift was quoted as saying that any regional or unilateral actions were self-defeating and urged maritime nations to act only through the IMO.

Shipping industry sources said that charterers of chemical and gas tankers have started making enquiries at the maritime authority's office about the guidelines and its repercussions.

In a circular issued on June 11, the DG (Shipping) had stipulated an age limit of 25 years for crude oil carriers, product tankers and chemical tankers and 30 years for gas tankers. Besides, all tankers above 20 years must have at least Condition Assessment Programme 2 (CAP 2) rating for hull, machinery and cargo equipment from the International Association of Classification Societies (IACS).

The DG (Shipping) had also made it mandatory for all tankers to be classed with IACS or the Indian Register of Shipping. It has cited possible environmental hazard from sub-standard foreign flag oil tankers calling at Indian ports as a reason for issuing the circular.

The possibility of old single hull tankers being diverted to Indian waters in the wake of stringent safety standards imposed in European countries, Singapore and Australia has become stronger. It has become necessary for tanker charterers and oil terminal operators to have a sound policy and procedure for hiring foreign oil tankers from the safety point of view, says a DG (Shipping) official.

But tanker operators and charterers do not agree with this view of the maritime authority. "The age of the vessel is not the sole deciding criteria for vessel safety... it depends a lot on the continuous maintenance programme being followed. In fact, some single hull oil tankers are better maintained than double hull tankers," says a shipping analyst.

Besides, maritime administration the world over is banning vessels not by age but by setting quality standards. For instance, the European countries have banned single hull tankers carrying fuel oil from its waters.

With many European countries banning old tankers from calling at their ports, such tankers may be available for trading between Gulf, Africa and Indian ports. This will benefit Indian charterers in the form of attractive lower freight rates due to availability of more tonnage for Indian import requirement, the analyst said.

But, the ban being imposed by the DG (Shipping) on ageing tankers will lead to restricted availability of vessels. All foreign flag crude, product and chemical tankers above 25 years and gas tankers above 30 years will be banned from entering Indian waters from September 1. Further, all such tankers above 20 years will also be banned if they do not have CAP 2 ratings. "So, the number of vessels that are available for trading will be very less. When vessels are in short supply, freight rates goes through the roof," he pointed out.

Domestic charterers have also informed the Government that they should not be blamed if refineries were to be shut down for want of crude owing to non-availability of vessels for bringing the crude cargo into India.

Article E-Mail :: Comment :: Syndication

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