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BOM 1800290 /October 2018 /v1.2 of 38

Bengal Shipyard Limited, Apeejay House, 15 Park Street, Kolkata 700016, India Feasibility study for ship recycling facility:

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BOM 1800290 /October 2018 /v1.2 of 38

MARINE CONSULTANCY SERVICES

DOCUMENT CONTROL SHEET

DOCUMENT REFERENCE NUMBER:

BOM 1800290

PROJECT TITLE: Feasibility study for ship recycling facility

STATUS: RESTRICTED � UNRESTRICTED � REVISION: 2 DATE: 16th October 2018

AUTHOR (S):

Tusil Dash Cdr Subrata Kanjilal (Retd.)

LR Asia, Mumbai General Manager | Project

APPROVED FOR ISSUE: Shobhit Kapoor

CLIENT DETAILS:

Bengal Shipyard Limited

Apeejay House, 15 Park Street, Kolkata 700016,

India

T +91 33 4403 5455 Ext 451 DID + 91 33 4403 5451 M

+ 91 98318 30585 F +91 33 4403 5458

www.apeejaygroup.com

CLIENT CONTACT:

Subir Chakraborty

SYNOPSIS: CONDITION ASSESSEMENT PROGRAMME REPORT

DISTRIBUTION:

NAME COPY No.

BENGAL SHIPYARD LIMITED (CLIENT)

2 COPIES

MARINE CONSULTANCY SERVICES 1 COPY

BOM 1800290 /October 2018 /v1.2 of 38

CONTENTS

Chapter Description Pages

Executive Summary 6

1 Introduction 7

2 Introduction of the Project / Background Information 8

3 Project Description 23

4 Site Analysis 31

5 Planning Brief 34

6 Proposed Infrastructure 36

7 Resettlement and Rehabilitation Plan 37

8 Project Schedule and Cost Estimate 37

9 Analysis of Proposal (Final Recommendation) 38

BOM 1800290 /October 2018 /v1.2 of 38

LIST OF ABBREVIATIONS

Abbreviation /Full Form Symbol / UnitAbbreviation /Full Form Symbol / UnitAbbreviation /Full Form Symbol / UnitAbbreviation /Full Form Symbol / Unit Abbreviation /Full Form Symbol / UnitAbbreviation /Full Form Symbol / UnitAbbreviation /Full Form Symbol / UnitAbbreviation /Full Form Symbol / Unit

AAQ Ambient Air Quality

AAS Atomic Absorption Spectrophotometer

AC Air Conditioner ACM Asbestos Containing Material ACWM Asbestos Containing Waste Material AERB Atomic Energy Regulatory Board AMSL Above Mean Sea Level @ At the Rate of SRFP Ship Recycling Facility Plan BaP Benzo a Pyrene BDL Below Detection Limit BOD Biochemical Oxygen Demand BWM Ballast Water Management cc Cubic Centimetre CFC Chloro Fluoro Carbon CFM Cubic Feet per Minute CO Carbon Monoxide CO2 Carbon di Oxide CPCB Central Pollution Control Board CRZ Coastal Regulation Zone dB Decibels DG Diesel Generator DISH Directorate of Industrial Safety and Health DWT Dead Weight Tonnage EC Environmental Cell EIA Environmental Impact Assessment EMP Environmental Management Plan F.O Furnace Oil GCA Gross Cropped Area GJ Giga Joules GLC Ground Level Concentration gm/cc or g/m3 Grams per Cubic Metre SMB State Maritime Board SPCB Gujarat Pollution Control Board H KC Hong Kong Convention ha Hectare

HEPA High Efficiency Particulate Air HSD High Speed Diesel HVAS High Volume Air Sampler ILO International Labour Organisation

IMD India Meteorological Department IMO International Maritime Organisation

Kg Kilogram Kg/d Kilograms per Day km Kilo metre km2 Square Kilometre km/hr Kilometres per Hour knot Nautical Miles Per Hour kW Kilo Watt LDT Light Displacement Tonnage LD50 Lethal Dose 50 (i.e. lethal dose for 50% of the test animals) Leq Log Equivalent LNG Liquified Natural Gas LPG Liquified Petroleum Gas m2 Square Metre m3 Cubic Metres m3/d Cubic Metres per day meq/gm Milli Equivalents per Gram mg/kg Milligrams per Kilogram mg/l Milligrams Per Litre MoEF Ministry of Environment and Forests, Govt. Of India mm Millimetre

MPN Most Probable Number Mt Million tonnes

µg/m3 Micrograms per Cubic Metre NAAQS National Ambient Air Quality Standards

NECL Nandesari Environment Control Limited

NOC No Objection Certificate

NTU Nephelometric Turbidity Units OSHA Occupational Safety and Health Administration (of USA)

PACM Presumed Asbestos containing Material Pb Lead

PCB Poly Chlorinated Biphenyl PESO Petroleum and Explosives Safety Organisation

PM10 Particulate Matter less than 10 micron in diameter

PM2.5 Particulate Matter less than 2.5 micron in diameter

PPE Personal Protective Equipment ppm Parts Per Million

RDS Respirable Dust Sampler RPM Respirable Particulate Matter

R & R Rehabilitation and Resettlement Rs. Rupees SO2 Sulphur Dioxide SPM Suspended Particulate Matter SRFMP Ship Recycling Facility Management Plan SSRP Ship Specific Recycling Plan

BOM 1800290 /October 2018 /v1.2 of 38

SRY Ship Recycling Yard t Tonnes TBT Tri Butyl Tin t/d Tonnes per Day TLV Threshold Limit Value

TSDF Treatment, Storage and Disposal

BOM 1800290 /October 2018 /v1.2 of 38

BOM 1800290 /October 2018 /v1.2 of 38

EXECUTIVE SUMMARY

Proposal Setting up of a green-field Ship Recycling Yard ffor undertaking Safe and Environmentally Friendly Ship Recycling Operations

Location of Project Kulpi, East Bank of river Hooghli

Latitude 22º00'13.49"N 22º01'49.34"N

Longitude 88º12'41.15"E 88º11'37.98"E

Proposed Capacity P r o c e s s s h i p s o f t o t a l ~ 60000 LDT/Year

Method of Working The yard layout has been conceptualized to meet requirement of

Hong Kong and EU Convent ions. The vessels to be recycled, wil l

be brought in during high water and made to sit on rai ls which wil l

be extended to the highest of the high water. The vessel wi ll be

pul led and the forward port ion of the vessel wi ll be posit ioned on

the non-permeable concrete platform located beyond Highest High

Water L ine where primary cutting would take place. Subsequently,

the cut portion of the ship would be transferred to the Secondary

cutting area using cranes. After secondary cutting, materia ls

would be segregated including the hazardous materials and stored

in their designated areas for f inal d isposal. The process of pul ling

the ship on the concrete area and cutt ing would continue until the

whole ship is dismantled as per cutting plan. Local environment would be

monitored continuously using monitoring equipment. Hazardous Land Required ~9.2 ha (6.1ha actual project area + 3.1ha green belt area

Land Use Grass land on the river bank

Present Land Ownership Land already acquired by the Project Proponent – M/s Bengal Shipyard Limited

Resource Consumption Proposed:

LPG: ~240 t/yr; Oxygen: 1.5 x 106 Nm3/yr; HSD:

~35kl/yr.

Waste Generation Expected to be ~ 166.t/yr Waste disposal To be handed over to Authorised Waste Recyclers and / or TSDF

Material Transport By trucks and tractor trolleys

Dredging Quantity No dredging required

Water Demand Industrial water: ~70 m3/day.

Drinking water: ~30 m3/day.

Source of water Industrial water: Hoogh ly River

Drinking water: Bore-wells located well away from the river bank

Man Power ~550 (direct employment).

Electricity Demand Expected: ~60 kW

BOM 1800290 /October 2018 /v1.2 of 38

Infrastructure Service road, power lines and water supply pipeline have to installed.

Proposed Investment Rs. 23 Crores

INTRODUCTION

This is Pre-Feasibility Report, which has been prepared as Part of the Application for

Terms of Reference

Environmental Impact Assessment and Environmental Management (EIA/EMP)

studies for the proposed

Ship breaking or ship demolition is a type of ship disposal, involving the breaking up

of ships for scrap recycling. Most ships have a lifespan of a few decades before there

is so much wear that refitting and repair becomes uneconomical. Ship breaking allows

materials from the ship, especially steel, to be reused. Equipment on board the vessel

can also be reused. Ship recycling offers a possibility to reuse significant parts and

equipment of the ship. Steel can be recycled to produce new steel, reducing the

energy required for processing by two-thirds. Copper cables and aluminum may also

be recycled in similar ways. This way we reuse natural resources.

The report includes:

• Introduction of the Project / Background

Information

• Identification of the Project and the Project Proponent

• Brief Information of the Project

• Need for the Project and its Importance to the Country or Region

• Demand and Supply

• Import vs. Indigenous Production

• Export Possibilities

• Domestic / Export Market

• Employment Generation

� Project

Description

• Type of Project including Interlinked and Interdependent Project

• Location

• Details of Alternate Site

• Size and Magnitude of Operation

• Raw Materials

• Resource Optimization / Recycling and Resource

• Site Services

• Wastes

� Site Analysis

• Connectivity

• Land Form, Land Use, Ownership

• Land use

• Existing infrastructure

• Soil classification

BOM 1800290 /October 2018 /v1.2 of 38

• Climate

• Social infrastructure available

� Planning

Brief

• Planning Concept

• Land Use Planning

• Assessment of Infrastructure Demand

• Amenities / Facilities

� Proposed

infrastructure

� Resettlement and Rehabilitation

Plan

� Project Schedule and Cost

Estimate

2.0 INTRODUCTION OF THE PROJECT / BACKGROUND INFORMATION :

This Pre-Feasibility Report, which has been prepared as Part of the Application for

Terms of Reference

Environmental Impact Assessment and Environmental Management (EIA/EMP)

studies for the proposed

Ship breaking or ship demolition is a type of ship disposal, involving the breaking up of

ships for scrap recycling. Most ships have a lifespan of a few decades before there is so much

wear that refitting and repair becomes uneconomical. Ship breaking allows materials from the

ship, especially steel, to be reused. Equipment on board the vessel can also be reused. Ship

recycling offers a possibility to reuse significant parts and equipment of the ship. Steel can

be recycled to produce new steel, reducing the energy required for processing by two-

thirds. Copper cables and aluminum may also be recycled in similar ways. This way we reuse

natural resources.

2.1 IDENTIFICATION OF PROJECT AND PROJECT PROPONENT:

The proposed project envisages setting up a ship recycling yard as part of the Marine Industry

Cluster to be set up by M/s Bengal Shipyard limited, a subsidiary of Apeejay Shipping Ltd of the

APPEJAY Surendra Group which is headquartered at Kolkata.

Apeejay Surrendra Group, a diversified industrial and services conglomerate with operations in

Shipping, Logistics Parks, Tea, Hospitality, Real Estate and Retail. (www.apeejaygroup.com).

The group has presence in the maritime space of the state in the following sectors:

i. Shipping – Apeejay Shipping Ltd.

ii. Logistics Park operations – Apeejay Infralogistics Pvt Ltd.

iii. Development of Maritime Industrial Cluster – Bengal Shipyard Ltd

The Group, with a vision to strengthen presence in the Maritime Sector in the State has proposed to

set up a Marine Industrial Cluster at Kulpi , South 24 Pargana over 550 acres of land leased by

the State Government.

BOM 1800290 /October 2018 /v1.2 of 38

The Marine Industrial Cluster is proposed to have the following components:

1. Unloading / unloading facilities

2. Shipyard for new building vessels and ship repairs

3. Logistics Park

4. Support Services

5. Marine Educational Institute and support services

Apeejay Shipping Ltd (ASL), a group company of Apeejay Surrendra Group, is a service provider

to the shippers, receivers and charterers by operating and maintaining a fleet of dry bulk carriers of

various sizes. ASL is the Largest coal mover along the coast in the country. Four vessels transport

about 8 million tons of thermal coal, picking coal from HDC and Paradip and then delivering to

Tamilnadu Electricity Board at Tuticorin.

The Group envisages setting up a Ship Recycling Yard as part of the Marine Industry Cluster, to be

set up by M/s Bengal Shipyard limited (BSL), a subsidiary of Apeejay Shipping Ltd (ASL)of the

APPEJAY Surendra Group.

2.2 BRIEF INFORMATION OF THE PROJECT:

The project envisages setting up a green-field Ship Recycling Yard at Tengra-Char Village on the

eastern bank of the Hooghly River estuary (the western-most distributary of the Ganges River) in

Kulpi Block of South 24-Paragans District, West Bengal. The ship recycling yard shall be set up by

Bengal Shipyard

It is expected that ships of total Light Displacement Tonnage (LDT) of about 60,000 tonnes will be

recycled annually.

2.3 NEED FOR THE PROJECT AND ITS IMPORTANCE TO THE COUNTRY OR REGION :

The ship recycling

1. Disposes of old ships whose operation and maintenance are no longer cost effective and / or

safe.

2. It recovers and recycles the materials used in construction of the ships.

With increasing age, a ship’s operational costs increase due to increase in fuel consumption and

increased repair & maintenance of the ship’s structure and equipment / machinery. Metal fatigue

and corrosion damage the ship’s structure. Ships more than 15 – 20 years old become costlier to

operate and maintain. After a certain stage the owner decides that it would be prudent to crap the

ship and recover the materials on board to the maximum possible extent.

By recycling the construction materials and components, the demand for natural resources for

producing the same materials is drastically reduced with consequent reduction in pollution. It is

also possible, that due to change in marine regulations, a ship owner decides that it would be it

becomes un-economical to retrofit his ship based on prevailing freight rates and market outlook and

scraps the ship although it is still in a fairly good condition. Table A gives the comparison of

resource requirements between producing 1 million tonnes (Mt) of steel by conventional route that

by ship recycling route.

BOM 1800290 /October 2018 /v1.2 of 38

Table A: Resource Requirements for Producing 1 Million Tons Steel by Conventional Route

and by Ship-Recycling Route

Resource Through Integrated Iron

& Steel Route

Ship Recycling Route

(including re-rolling)

Iron Ore (t) ~1,750,000 Nil

Refractory materials / additives

(t) ~700,000 Nil

Coal (t) ~1,550,000 Nil

Process Chemicals (t) ~40,000 Nil

Water (Million m3) ~25 - ~60 ~0.20

Oxygen (Nm3) ~65 x 106 ~18 x 106

Fuel Oil (t) ~30,000 ~55,000

LPG (t) Nil ~4,000

Energy ( as fuel & electricity) ~20,000 x 1012

J * ~2,560 x 1012

J

* Does not include energy required for transport of raw materials to plant

Sources: 1. Report “Pollution Potential of Ship Breaking Activities” prepared by MECON Ltd. for CPCB,

in 2001

About half the steel produced in India is through the secondary steel manufacturing route i.e.

melting and refining scrap iron & steel. In addition, steel scrap is also required as an additive

during primary steel manufacture through the conventional Blast Furnace – Basic Oxygen Furnace

(BF-BOF) Route.

Ships’ steel and other metals is high quality metal with resistance to corrosion and metal fatigue.

Metal recovered from ships processed into other usable products either by re-rolling or by melting

& refining. Thus ship recycling provides high quality steel and other metals at a fraction of the

resource and environmental cost.

2.4 DEMAND AND SUPPLY GAP:

World Economic Situation and Prospect

Global GDP is expected to expand with the major drag on global growth coming from developed

economies and related concerns about fiscal sustainability and large public debt (e.g. Greece). In

USA another large scale fiscal stimulus is expected to relatively better economic performance.

The outlook for developing countries is much brighter with China, India and Brazil leading the

way. GDP in the transition economies is expected to grow, too, although it is still expected to lag

behind developing regions and pre-crisis levels.

Industrial production – a leading indicator of demand for maritime transport services has

recovered from the third quarter of 2009 – 10 which dampened demand for raw materials and

energy, both mainstays of demand for shipping services. The correlation between industrial

production, economic growth, global merchandise trade and seaborne trade volumes is shown

below in Fig. 1.

BOM 1800290 /October 2018 /v1.2 of 38

Fig. 1: Organisation for Economic Co-operation and Development Index of Industrial

Production and World Indices: GDP, Merchandise Trade And Seaborne

Trade, 1975 – 2016 {1990 = 100}

(Source: UNCTAD, Review of Maritime Transport, 2017)

Developments in International Seaborne Trade

In 2009, in tandem with the collapse in economic growth and trade, international seaborne trade

volumes decreased by 4.5%. By early 2011, a global recovery led by fast growing developing

economies was under way, although it was un-even and fragile.

Prospects for shipping remain difficult and uncertain, due in particular to the significant size of

the ship supply capacity and impact of the demand / supply mismatch on shipping markets. An

added challenge relates to the evolving global regulatory framework, including ship recycling

convention. Assuming that the recovery takes hold and there are no new upheavals on the global

scenario, the shipping industry and seaborne trade are expected to recover.

Table B: Development of International Seaborne Trade in Selected Years

Year Oil Main Bulks Other Dry Cargo Total (all cargos)

1970 1442 448 676 2566

1980 1871 796 1037 3704

1990 1755 968 1285 4008

2000 2163 1288 2533 5984

2006 2698 1849 3135 7682

2007 2747 1972 3265 7983

2008 2732 2079 3399 8210

2009 2649 2113 3081 7843

2010 2772 2335 3302 8409

2011 2794 2486 3505 8785

2012 2841 2742 3614 9197

2013 2829 2923 3762 9514

2014 2825 2985 4033 9843

BOM 1800290 /October 2018 /v1.2 of 38

2015 2932 3121 3971 10023

2016 3055 3172 4059 10287

All figures in million tones loaded

Source: UNCTAD, Review of Maritime Transport, 2017

2.4.1 Structure of the World Fleet

2.4.1.1 World Fleet Growth and Principal Vessel Types

In January, 2017, commercial ships in service had total DWT of 1,861,852,000 (Table C). Of

these, oil tankers constituted 28.7% (~535,000,000 DWT) and dry bulk carriers constituted 42.8%

(~797,000,000 DWT). Container ships constituted 13.2%.

Table C: Principal Merchant Ship Types in 2016 & 2017 [Source: UNCTAD, Review of Maritime

Transport, 2017]

Ship Type DWT x 1000 % Change

(2016 – 2017) 2016 2017

Oil Tankers 505,736

(28.0)

534,855

(28.7)

5.76

Bulk Carriers 779,289

(43.2)

796,581

(42.8)

2.22

General Cargo Ships 74,992

(4.2)

74,882

(4.0)

-0.23

Container Ships 244,339

(13.5)

245,609

(13.2)

0.52

Gas Carriers 54,530

(3.0)

59,819

(3.2)

9.70

Chemical Tankers 41,295

(2.3)

43,225

(2.3)

4.68

Ferries & Passenger Ships 5,757

(0.3)

5,896

(0.3)

2.43

Offshore 75,696

(4.2)

77,490

(4.2)

2.48

Other / Not Available. 23,645

(1.3)

23,554

(1.3)

-0.08

WORLD TOTAL 1,805,279

(100)

1,861,852

(100)

3.15

BOM 1800290 /October 2018 /v1.2 of 38

Source: UNCTAD; Review of Maritime Transport, various issues

Fig. 2: Annual Growth of World Fleet 2000 – 2016 (Percentage Annual Change)

Source: UNCTAD secretarial calculations, based on data from Clarksons Research ; Review of Maritime

Transport, various issues

Fig. 3: World Fleet by Principal Vessel Type, 1980 – 2016 (Percentage Share of Dead

Weight Tonnage)

2.4.1.2 Age Distribution of the World Merchant Fleet

The average age of the world fleet increased slightly during 2017 as compared to the previous

year as less new tonnage was delivered and less ships were demolished. In particular, the average

age per deadweight ton decreased (as compared to the average age per ship), as newly delivered

ships tend to be larger than most of those in the existing fleet; vessels built during the last four

BOM 1800290 /October 2018 /v1.2 of 38

years are, on average, six times larger than those built before 1990. Bulk Carriers ships are the

youngest vessel type, with an average age (per ship) of 8.8 years, followed by Container (11.6

years), oil tankers (18.8 years), other ship types (22.7 years) and general cargo ships (25.2 years)

(Table D).

Tab

le

D:

Age

Prof

ile

of

the

Wor

ld

Mer

cha

nt

Flee

t ,

201

7

The likelihood of a vessel being demolished is highest for ships between 30 and 35 years old.

Vessels less than 18 years are rarely scrapped and as ships get older, those few that have survived

40 or more years are again more likely to be kept in service. However it may be noted that with

the commissioning of the new locks of Panama Canal a number of smaller container ships were

scrapped as it was much more economical to operate the larger New Panamax Class vessels.

Types of Vessels Age in Years

0 - 4 5 - 9 10 - 14 15 - 19 >20 Avg. (Yrs.)

2017 2016

Bulk Carriers % of Total

Ships

35.77 33.80 12.05 9.33 9.05 8.80 8.80

DWT % 38.66 34.88 11.91 7.55 7.01 7.95 7.94

Avg. Size

(DWT)

79,099 75,525 72,283 59,244 56,673

Container

Ships

% of Total

Ships

18.63 30.50 22.72 15.66 12.50 11.55 11.10

DWT % 31.51 32.57 20.82 10.17 4.92 8.72 8.39

Avg. Size

(DWT)

80,624 50,891 43,679 30,961 18,751

General

Cargo Ships

% of Total

Ships

7.68 16.50 10.20 7.54 58.08 25.21 24.44

DWT % 14.98 24.70 12.23 10.24 37.85 18.29 17.83

Avg. Size

(DWT)

8,118 6,081 5,086 5,630 2,561

Oil Tankers % of Total

Ships

16.03 22.51 15.46 7.74 38.26 18.76 18.36

DWT % 22.07 34.74 24.44 12.67 6.09 9.90 9.54

Avg. Size

(DWT)

73,274 82,242 84,610 80,498 8,777

Other types % of Total

Ships

14.37 18.65 10.60 8.43 47.96 22.73 22.25

DWT % 19.40 26.43 14.21 10.29 29.67 15.58 15.65

Avg. Size

(DWT)

7,777 7,907 8,004 7,144 3.954

All Ships % of Total

Ships

11.75 17.97 10.13 7.00 53.15 20.57 19.92

DWT % 29.80 33.16 16.95 9.78 10.31

Avg. Size

(DWT)

42,207 34,948 32,847 25,991 5,917

Source: UNCTAD, Review of Maritime Transport, 2017)

BOM 1800290 /October 2018 /v1.2 of 38

2.4.2 Ship Recycling Trends

During the initial years of industrial expansion the trade remain confined to the selected

economies represented by the developed OECD countries. Post 1960s, the industrial expansion

took place in the other geographies specially the Asian and South American regions. However the

seaborne trade had played a pivotal role in the development of the regional or the global economy

by moving a wide variety of merchandized items between the regions and the countries. Sea trade

involved almost every kind of merchandized items in the form of dry, liquids and gas to the extent

that global economy today dependent on seaborne trade for 90% of its cargo movements.

The global merchandized trade grew to more than 3 times since in 1970 and consequently led to

development of global fleet size to double by 2010 in term of DWT.

The ship recycling industry is prone to cyclic pattern which mainly depends on the various

individual factors or the combination of them which can trigger the upsurge in the ship recycling

industry. These factors are:

• Supply and demand of ship tonnage

• Age of the vessels

• Prevailing or anticipated chartered rates

• General trends in the global economy and the projected economic outlook

• The environmental and safety regulations

Normally the a vessel’s operating life is approximately 30 years , however it depends on the

prevailing trends of the above mentioned factors which can potentially influence the decision to

go or not to go scrapping. Weaker freight rates, down turn in economic activities along with the

expansion of fleet may push the ship owners to go for pre mature scrapping of ships. During the

years 1999 & 2009 due to the economic recession, relatively higher rate of scrapping was

observed. The average age of outgoing vessels went down to ~25- 27 years which signifies the

importance of these factors.

The other significant factor is the structural shift in the ship breaking industry in the favour of

China, India, Bangladesh & Pakistan. These countries are contributing to the extent of >90% of

the tonnage demolished globally at present as they offer cheap labour along with high and

consistent demand for construction steel. China has the largest share followed by India and

Bangladesh and marginally by Pakistan.

The market for ship demolition – also called scrapping or recycling – is far more volatile than the

market for shipbuilding, as ships can be sold for demolition at short notice. In periods when

freight and charter rates are high, ship-owners are very reluctant to withdraw any ships from the

market, while in times of low demand for maritime transport, owners are much more inclined to

sell their ships to scrap yards. The disadvantage of selling in times of low demand is that prices

for scrap metal are very low.

In recent years, the average age of broken-up ships has tended to increase, as ships are now built

to last longer, and, in times of economic growth, owners keep older ships in service for longer.

During the economic downturn in 2008 and 2009, however, the share of tonnage being

demolished increased, and the average age of the fleet therefore decreased.

BOM 1800290 /October 2018 /v1.2 of 38

Of the tonnage demolished in 2017, container ships and dry bulk carriers accounted for the largest

share, with about 23% each, followed by vehicle carriers (15% of scrapped tonnage) and tankers

(13%) (Table E).

The market for ship demolition is as concentrated as the market for shipbuilding. The South Asian

Countries accounted for 84.3 % of the gross tonnage demolished in 2016, with India leading

(30.84 %), followed by Bangladesh (28.45 %), Pakistan (16.12%) and China (10.65 %). (Table

E).

Table E: Profile of Ships Scrapped in 2016 . (Source: UNCTAD, Review of Maritime Transport, 2017) Ship Type China India Bangladesh Pakistan Unknown

Indian

Subcontinent

Turkey Others /

Unknown

World

Total

Container

ships

569 3922 1675 119 1056 104 110 7556

Bulk & ore

Carriers

1823 3269 5756 3742 1049 121 58 15818

Ferries &

Passenger

Ships

- 51 - - - 77 39 166

Oil Tankers 266 142 224 448 103 7 63 1253

Chemical

tankers

1 168 - - 28 28 1 226

Gas Carriers 3 147 25 48 - 171 3 397

General

Cargo Ships

44 519 152 66 37 192 36 1046

Offshore 24 340 64 249 218 46 122 1064

All other

types

356 375 344 - 81 252 33 1442

TOTAL 3086 8934 8240 4672 2572 999 466 28968

% Share of

Total

Tonnage

Broken

10.65 30.84 28.45 16.13 8.88 3.45 1.61

In the field of ship scrapping, too, countries specialize in certain vessel types. In 2016,

Bangladesh scrap yards purchased 36.4 % of the bulk carriers, whereas India purchased about

52% of the container ships sold for demolition. India was also the market leader Chemical

Tankers, General Cargo Ships and Offshore Vessels while Pakistan was the market leader in Oil

tankers. Developed countries are not participating significantly in ship recycling, as developing

countries with low wages are more competitive in this very labour-intensive industry. More

stringent environmental regulations further add to the higher costs in developed countries.

2.4.3 Ship Recycling Demand Forecast

The main factors governing future ship recycling are:

• Freight Market Conditions

• Fleet age profiles and the size of new building order books

• The average age at which different ship types have previously been scrapped

• Whether some vessel types are being superseded by others in the carriage of particular cargos

BOM 1800290 /October 2018 /v1.2 of 38

The assumption base of the demand forecast of the volume of ship recycling is as follows:

• The limited ship-scrapping seen during 2004 – 08 reflects exceptionally firm freight markets

for all main ship types and that some easing in trading conditions will ensue in the next five

years. This would be in response to rapidly rising tonnage supply.

• Due to global recession in 2008, large numbers of container ships, vehicle carriers, bulk

carriers and single hull tankers were scrapped.

• Although the underlying growth rate in world seaborne trade is unlikely to return to pre-2008

levels, average vessel earnings are expected to fall in overall terms, causing some revival in

recycling.

• This would mean that the increase in average ages as in the previous decade. The one

exception to this principle is dry bulk carriers, given the exceptional volume of new

contracting of this ship type seen in 2007. Such ordering means that the dry bulk carrier fleet

will be subject to unprecedented levels of new building deliveries over the next 2 – 3 years.

Hence it is assumed that total recycling of dry bulk carriers in the near future (up to 2022)

will amount to all existing tonnage that would be greater than or equal to 24 years old by end

of 2022 and all additions to the current fleet arising from conversion of single hulled tankers.

Fig. 4: Fore cast of Ship-Recycling Up to 2022

It is expected that during the period 2010 – 2022, ~400 million DWT of existing ships will be

recycled, i.e. on an average ~30 million DWT would scrapped annually. During 1990 – 2008, the

average annual scrapping was 19.6 million DWT. Therefore global ship recycling capacity is set

to increase sharply.

In 2016, the ship recycling volume was 22.6 million GT as compared to 35 million DWT during

2009 which in turn was a marked increase over the previous 10 year average of 28.8 million

DWT per year. This was due to global recession. Yet higher scrapping would also reflect the

removal from service of some old tonnage that would normally have been scrapped in the past.

Such ships are likely to be forced out of the market by the huge influx of new buildings. As far as

the ship breaking industry is concerned it is expected that the trend for volumes may continue as

the global economy may take time to recover fully and in the near term there are string chances

that the freight rates remain well below the 2008 levels.

BOM 1800290 /October 2018 /v1.2 of 38

Age profile along with the expansion in the global fleet combined together is expected to play a

more crucial & decisive role in the near term. Around 20% of total global fleet gross tonnage is

more than 15 years old which is vulnerable to scrap out in the weak or declining freight market.

The European Union’s proposed accelerated phase out of single hull tankers between 20,000

DWT to 30,000 DWT. According to the recent estimates, there are more than 2250 single hull

tankers of 5000 DWT (total 129.5 million DWT) , that have to be scrapped. This is 25-30 %

higher than the estimate of peak volume of 2015. These tankers would be withdrawn by 2015 in

accordance with strict phase out schedules laid down by the European Commission (EC) and

IMO. The new regulations include a ban on carrying heavy grades of oil in single hull tankers.

Higher volumes of ship recycling over the next 15 years can also be ascribed to the growth in the

world merchant fleet and the likelihood that it will become harder for tonnage to survive to very

advanced ages due to mainly legislative pressure, many over aged ships seem likely to be

recycled in response to commercial factors, such as their inferior fuel efficiency as compared to

modern vessels.

By the end of the present decade, fast growing ship supply amid exceptionally high new building

deliveries looks set to bring vastly higher ship scrapping.

Presently ship recycling is on a partial downturn which is expected to last till the end of 2018.

Nevertheless over 20 million DWT is expected to scrapped annually. Another upswing in activity

is forecast to follow from 2018 onwards which will probably peak in 2022. This would largely

follow from the first noteworthy scrapping of double hulled tankers built in the early to middle

1990s. However it would also result from further concerted recycling of dry bulk carriers (from

around 2020 onwards) and ongoing increases in scrapping of container ships.

2.4.4 India’s Advantages in the Global Ship Recycling

India has the largest ship recycling capacity amounting to ~30% of the world total. The locational

advantages of Alang are definitely a major factor. In addition there is a strong domestic market

demand for steel scrap. Cheap labour costs and a skilled work force which can recycle and / or

refurbish materials / equipment recovered from ships have enabled Indian ship recyclers to offer

competitive prices to potential ship sellers. Improvement of environmental controls and safety

standards, will facilitate European, Japanese and North American ship owners to selling their

ships to Indian ship recyclers.

It is expected that in the coming years, bulk carriers and container ships will constitute majority

of the ships being scrapped and India is already the leader in this segment. Bangladesh is the

leader in the ”Tankers” segment. India will gain market advantage in this segment by offering

better environmental and safety stands to European and US ship owners who are bound by their

respective country’s regulations to sell their ships to recyclers with better environmental control

and safety standards.

2.4.5 Potential Supplier of Ships for Scrapping

As mentioned above, Japan is one of the largest shipping countries in the world controlling ~16%

of the world fleet (i.e. ~183 million DWT). Most Japanese ship owners send their ships to China

for scrapping due to enforcement of environment friendly practices and regulations. This

BOM 1800290 /October 2018 /v1.2 of 38

amounted to ~3% of the total DWT annually (i.e. 5.5 million DWT). If India can offer the same

level of sound environmental practices and competitive prices, a large share of the China’s market

can be garnered by India. India can also garner a large share of European and US owned ships.

2.4.8 Ship Recycling Industry: Demand & Supply Dynamics

At any particular time, broad global, regional and national economic contexts determine both the

supply of ships scrap to the ship breaking industry and the demand for the industry’s output of the

recyclable materials principally scrap steel. On the supply side freight rates, along with costs of

keeping a vessel in operation, emerge as the most important determinants of a ship owner’s

decision about when to send that vessel to a ship breaker. On the demand side, the market demand

for scrap metal is a direct function of the prices of steel and the costs associated with the

scrapping industry itself.

The decision of a ship breaker to enter the market is influenced by the national & local

possibilities to sell scrap steel and other recyclable items, which will determine potential

revenues. The cost structure is mainly driven by local wages, tariffs & duties and by the level of

implementation of national regulations regarding workplace safety and environmental impacts.

The largest portion of the ship breaker’s revenue arises from the sale by ferrous or mild steel

(MS) scrap which is high quality steel scrap. The market of MS consists of two segments.

Re-Rollable Scrap: Higher value steel plates is the one of the key scrap, which can be heated and

re-rolled, primarily in bars and rods for construction (Typically a minimum 70% of the ship’s

recycled light displacement tonnage). Other re-rollable scrap end users include profile makers and

flange makers.

Melting Scrap: Smaller pieces of scrap iron, which are melted in induction furnaces to make

ingots whose main buyers are re-rolling mills (10-20 % of LDT).

Fig. 5: Scrap Process Diagram

The competition in the ship breaking industry is usually guided by the demand for re rollable or

melting scrap from the downstream steel manufacturing industry and the prevailing scrap rates

while on the other hand at supply side it also depends on the type of ship & vessels available for

scrapping. The ships to be scrapped are priced in USD per LDT and normally it is offered to the

highest bidder. India and China compete for containers ships, bulk carriers as they are

BOM 1800290 /October 2018 /v1.2 of 38

comparatively easy to handle and dismantle and also offer relatively better yields in terms of

tonnes of LDT. Bulk carriers is the most competitive category, may be due to better LDT to DWT

ratio and high yields up to 71% of re-rollable plates. May be due to relatively stringent

environmental norms and better dismantling practices prevailing in the countries like China &

India, these countries specially India, are targeting categories like vehicle carriers and general

cargo ships.

Assuming that vessels/ ships of more than 25 years of age would be available for scrapping in the

coming 5-7 years the distribution and market share for Indian market has been derived as shown

in Table F.

Table F: India's market available based on distribution & market share (1000 MT)

Type Small Medium Large Very Large

GT No. GT No. GT No. GT No.

Container ships 0 0 870 104 1186 35 0 0

Bulk & Ore Carriers 13 40 6002 424 4099 118 1307 16

Vehicle Carriers 1 2 554 74 555 14 38 1

Tankers 1 4 1 1 0 0 0 0

General Cargo Ships 449 1436 11600 3420 1357 45 0 0

Chemical Tankers 95 292 1861 603 477 14 77 1

LPG Tankers 5 14 358 118 478 11 1339 15

All other- sub types 929 4049 4345 1862 765 22 1894 17

Total GT 1493 5838 25592 6604 8916 260 4656 49

BOM 1800290 /October 2018 /v1.2 of 38

2.4 IMPORT VS INDIGENOUS PRODUCTION:

Nearly 90% of the weight of recycled materials from the ships is steel. The balance comprises of

re-usable pipes (~5%), machinery & equipment (~2%) and other miscellaneous scrap. Materials

other than metals (ferrous as well as non-ferrous), except for the waste containing hazardous

substances, are re-used.

The following materials are salvaged from ships:

A. Petroleum Products & Chemicals

Diesel Fuel Oil Lubricants Hydraulic fluids

Refrigerants Anti-freeze / Anti seize chemicals Electrolytes Boiler additives

Detergents Cleaning chemicals & solvents Pesticides Sacrificing anodes

Industrial

Gases

B. Industrial Materials

Paints Asbestos & Asbestos Containing Materials PVC tubes / sheets Dunnage wood

Cotton rags Rubber packing and tubes Window panes Glass sheets

Drums Poly-urethane foam Polystyrene sheets Metal pipes and

valves

Nuts & Bolts Fibre glass / reinforced plastic items Steel wool Glass wool

Cardboard Miscellaneous metallic items Gas cylinders

C. Electrical Machinery and Appliances

Generators Motors Batteries Circuit Breakers

Contactors Electrical welding equipment Transformers Fuses and Fuse boxes

Switches Lighting equipment Cables Panel boards

Accumulator

s

Search-lights Fans and Blowers Portable lights

D. Machinery

Winches Pumps Compressors Lathes

Grinders Ships’ Main & Auxiliary engines Engine Spares Machinery Spares

Cranes Air conditioning plants Water treatment plants Boilers

Bearings Gears & Gear Boxes Oil sumps

E. Tools and Tackle

Gas cutters Leather gloves Chains Polypropylene Ropes

Wire ropes Pulleys & pulley blocks Hand tools Compressed air tools

Electrical

tools

Brushes Ships’ anchors Rubber fenders

F. Safety Equipment / Appliances

Life boats Survival suits Floatation rings Life jackets & belts

Helmets Fire fighting suits and equipment Safety Boots Fire extinguishers

Gas masks Breathing apparatus Safety goggles Welding goggles

G. Communication Equipment & Accessories

Telephones Marine trans-receiver sets (Smashed by

Customs soon after beaching)

PA systems FAX Machines

H. Navigation Equipment & Accessories

Compasses GPS systems Radar sets Navigation Charts

Chronomete

rs

Signaling and Navigation lights Fog horns Distress signals &

flares

Flags

I. Domestic Wares and Electro-mechanical appliances

BOM 1800290 /October 2018 /v1.2 of 38

Photo-

copiers

TVs, Music systems, Video Players Refrigerators Washing Machines

Furniture Personal Computers & accessories Vacuum Cleaners Mattresses & linen

Food items Kitchen utensils & Crockery Dish washers Books & magazines

Cabin

fittings

Cooking & food processing appliances Bathroom Fittings Water coolers

Ceramic

tiles

Carpets & Linoleum Gymnasium eqpt.

Buckets Show pieces & decorative items

J. Miscellaneous

Office

Stationery

Technical Documents & Books Ships’ Documents Domestic Detergents

(Source: Report “Pollution Potential of Ship Breaking Activities” prepared by MECON Ltd. for CPCB in 2001)

Most of these are reused.

The recovered materials from Alang Ship Recycling Yard are sold as “Alang Products” in local

markets in Bhavnagar, which is the nearest large town / city from Alang Sosiya Ship Recycling

Yard other places in Gujarat and also in other states. Many of the machinery and spares are used

on board other ships / trawlers, other boats and other industries.

Steel supply from ship recycling accounts for only ~5% of India’s domestic steel demand.

“Alang Steel” is in demand for the construction industry outside Gujarat especially in Punjab,

Haryana and Rajasthan. In Mandi-Govindgarh area of Punjab there are a number of steel forging

units using “Alang Steel” as raw material. In Gujarat, the recovered scrap metals are utilized as

raw material for manufacture of casting products such as container reinforcing parts, automobile

engine blocks, automobile parts castings, bathroom fittings and others.

It is expected that many of the materials recovered from ships at the proposed ships recycling

yard will be sold in Kolkata – Howrah area for reuse and / or as raw materials in other industries.

In all likelihood, some of the salvaged materials especially furniture, cabin doors, bath room

fittings will be reused in nearby villages and towns. Small scale industries are also expected to

come up in nearby villages and towns to manufacture usable goods from materials recovered from

ships at the ship recycling yard.

It may be noted that recently M/S Cochin Shipyard Limited has formed a Joint Venture with

Kolkata Port Trust for setting up ship repair facilities at Kolkata Port Trust’s dry docks. It is

possible that some of the materials recovered from the proposed ship recycling facility will be

utilized for repair and maintenance of ships at this facility.

2.5 EXPORT POSSIBILITIES:

Ships are equipped with thousands of materials which are recycled to maximum extent possible.

The recycled materials include:

• Ferrous metals (steel, cast iron, stainless & special steels)

• Non-ferrous metals (Aluminum, copper, bronze etc.)

• Other materials (refer Clause 2.5 above).

The machinery and equipment installed in the ships roughly classified into 30 different types. For

most reusable engines and power generators, the buyers come on board and purchase from the

ship waiting to anchor on the beach. The equipment are repaired / refurbished / overhauled in

BOM 1800290 /October 2018 /v1.2 of 38

their own workshops to be used in other ships or shore based industries as industrial machinery.

Those buyers who deal in mechanical marine equipment often have counterparts in Singapore and

the machinery are exported exclusively to Europe and Asia.

2.7 DOMESTIC / EXPORT MARKET:

The steel products comprise of:

• Re-rollabale steel : 54%

• Plates : 27%

• Melting scrap : 4.5%

• Pipes scrap : 4.5%

• Others : 10%

In Bhavnagar Area, about 90% of the buyers are traders and wholesale brokers while the rest are

construction companies purchasing directly from the ship-recyclers. About 150 steel processing

companies are operating in Bhavnagar area, out of which 4 companies possess small scale electric

furnace producing casting products. Products made from high quality . “Alang Steel” are

supplied to foreign automobile manufacturers.

There are several small foundries in the vicinity of Kolkata and Howrah. More are located in

Asansol-Durgapur area of West Bengal, Dhanbad, Bokaro and Jamshedpur in adjoining

Jharkhand.

Ships’ machinery and equipment can be exported exclusively to Europe and Asia to the

specialized mechanical buyers involved in repaired / refurbished machinery. Recently Cochin

Shipyard Limited has entered into a joint venture with Kolkata Port Trust for utilising the dry-

dock facilities of Kolkata Port for ship repair. Some of the material recovered at the proposed ship

recycling facility may be used in the new ship repairing facilities.

2.8 EMPLOYMENT GENERATION:

It is expected that ~550 persons will be directly engaged in ship-recycling.

Among the workers, about 60 workers shall be highly skilled workers engaged in various

specialized tasks. About 90 workers shall be semiskilled workers engaged in dismantling of

detachable items. About 370 workers shall be unskilled workers engaged in material sorting,

loading and sundry works. There will be about 30 office staff shall including safety personnel,

clerical staff and supervisors.

Skilled workers shall include:

1. Gas cutters. These workers shall be divided into two groups – on e deployed on the ships and

the other on shore.

2. Fitters. They shall be engaged in dismantling important parts, pipes, hardware, electrical items,

metal etc. of the vessel.

3. Crane operators

4. Truck drivers

5. Foremen (foremen are the leaders of the labour group; supply labour to the facility from

different places and also supervise different problems of workers. Some of them work at the

facility, some do not. Thus foremen are separated from the mainstream labour

BOM 1800290 /October 2018 /v1.2 of 38

Semiskilled and unskilled workers shall include truck helpers, semiskilled gas cutters, semiskilled

fitters, lifters, loaders, wire pullers, cutter, loading and wire pulling helpers.

Training programme will be organised for unskilled and semi-skilled workers and other staff to

upgrade their skill, thus keeping them engaged with a specific type of work as replacement when

regular work force is unavailable due to unavoidable conditions. Safety Training on safety shall

be imparted to all workers before employment as well as during employment (refresher training).

The total indirect employment is expected to be 3 to 4 times the direct employment. Additional

employment is expected to be generated in downstream processing industries and trading

activities.

3.0 PROJECT DESCRIPTION

As mentioned above, BSL is setting up Marine Industrial Cluster, which shall also include a ship

recycling yard.

3.1 LOCATION

The Marine Industrial Cluster is spread over the Villages: Tengrachar, Arun-nagar, Rangafala,

Belpukur and Uttar-Chandrapur in Kulpi C.D. Block of South 24 Paraganas District, West

Bengal. The Ship Recycling Yard will be located in Village:Tengrachar.

The site proposed for the Marine Cluster is located on the eastern bank of the estuary of the

Hooghly River (the western-most distributary of the Ganges River). The site has a long water

front with adequate depth of water and is also close to the shipping channel leading from the sea

to Kolkata Port Trusts jetties at Baj-baj and docks at Kolkata. The shipping channel is deep

enough for ships of >7.5 m draft. The location of the project site is marked in Fig.3.1.

BOM 1800290 /October 2018 /v1.2 of 38

3.2 LAND

The ship recycling facility shall be spread over 9.2 ha of which, 6.1 ha shall comprise of the

actual project and 3.1 ha shall constitute the project’s green belt.

Presently the site is a grassland on the bank of the Hooghly River.

3.3 DETAILS OF ALTERNATE SITE

The proposed ship recycling yard project will be part of a Marine Industry Cluster. The land for

the project has been allotted by Government of West Bengal.

3.4 SIZE AND MAGNITUDE OF OPERATION:

As per plan the first year of operation will commence with two Panamax vessels with average

LDT of 20000 Tons and from the 4th year will be four Panamax vessels totaling 60000 tons each

year thereafter.

3.5 PROCESS DESCRIPTION

3.5.1 Ship Recycling Methodologies

Ship breaking can be carried out by several methods, which include beaching (the most common),

berthing, dry-docking and lifting on to dry land by marine air bags.

Beaching Method

Beaching is the most common method and is widely used in most places in India, Bangladesh and

Pakistan. In the beaching method, the ships are grounded in the inter-tidal zone, either under their

own power or under tow, during spring tides (i.e. beached). This method requires minimum

infrastructure and level of skill of the workers involved. The only infrastructure required are shore

based winches, crawler cranes and other material handling equipment. The size of the ship to be

cut is restrained only by the tidal range of the beach, its slope (a flat beach is suitable) and

material of the beach (a beach made up of rocks or coarse sand poses problems).

After receiving statutory clearances, removal items, such as insulation, machinery, tools & tackle,

electrical fixtures, furniture, fuel oil etc. are removed. The ships are cut into large pieces, which

are dropped on the beach. These pieces, some weighing hundreds of tonnes, are either winched to

the shore by shore based winches or carried by crawler cranes to dry land and cut up completely.

As the ship is cut up the remnants (i.e. the partly cut ship) is dragged closer to the shore by shore

based winches to facilitate material handling.

Prior to cutting, which is done by Oxygen-LPG or Oxygen-Acetylene torches, the surface which

has to be cut is stripped of paint by rubbing with wire brushes and the paint chips fall on the

beach. Other debris generated during cutting (metal scales) also fall on the beach. Debris

generated during removal of detachable items fall on the ship’s decks and usually swept

overboard or drop on the beach, when that particular part of the ship is cut and dropped on the

beach. The fallen debris / contaminants quickly mix with the mud / sand of the beach and / or are

dispersed by tidal waters before they can be collected. The floating debris can be transported over

long distances depending on the water currents.

BOM 1800290 /October 2018 /v1.2 of 38

In this method, working is possible during day-light hours only as temporary power supply cables

cannot be installed across long stretches of inter-tidal zone. Transport of men and material to and

from the ships is possible only during low water and this leads to lower efficiency. Material

movement is also difficult as the same has to be carried out across several hundred metres of

beach which may not be composed of material capable of supporting movement of heavy vehicles

/ equipment.

Landing Method.

In this method, the ship is cut section by section and cutting of each section is carried out on non

permeable concrete surface, beyond the inter tidal zone and there is no contact of the cut material

with the river water.

This method is proposed to be adopted in the present case by Bengal Shipyard Ltd.

Berthing Method

Ships are also broken while berthed along quays (as is done at Khidderpur Docks, Kolkata). The

ships are tied up alongside a quay and cut up while still afloat. After removal of detachable items

/ material, the ship is cut using oxygen-LPG or oxygen-acetylene torches. Pieces weighing not

more than ~5 t are cut and lowered on to the quay by shore based or ship-board cranes. The

cutting should be carefully planned so that the floating ship does not become unbalanced and

capsizes or sags or hogs. The bottom of the hull is winched on to dry land (beached) for final

demolition.

This method requires availability of a quay, facilities for berthing the ship and shore based cranes

and other material handling equipment. The size of the ship to be cut is restrained only by quay

length and navigational restrictions, if any, for reaching the quay. Also land and infrastructure

must be available for beaching the hull bottom.

Compared to the beaching method of ship-breaking the berthing method is more environment

friendly. Most of the debris generated on board the ship can be collected and taken ashore for

proper disposal. There is little chance of water entering exposed interiors of the ship and carrying

away contaminants. Some debris does fall into the water. Ship-board effluents can be easily

pumped to shore based treatment systems. If the quay is inside an enclosed dock (e.g. as in

Khidderpur dock), floating booms can encircle the ship which will enable collection of any falling

floating debris or spilled oil; contaminated sediments can also be dredged up and disposed off

properly on shore.

Since the ship is berthed along a quay, arrangements for working even at night can be easily

made. Materials removed from ships need to be transported only short distances over proper roads

to material storage and sorting areas which improves efficiency and consumes less fuel (for

transport vehicles). Casualty evacuation will take minimum time.

Dry-docking Method

Ships are also broken up inside dry-docks (either graving docks or floating docks). The ship is

moved inside a graving dock or a submerged floating dock and properly positioned. In case of a

graving dock, the dock gates are closed and the water is pumped out. In case of a floating dock,

the dock is raised, lifting the ship out of the water. Subsequently the ship is cut up as usual. In this

method also round the clock working is possible.

BOM 1800290 /October 2018 /v1.2 of 38

This method requires a lot of infrastructure in form of the dock and associated infrastructure and

equipment. The size of the ship is also restricted by the dimensions of the dock. On the other hand

this method is most environment friendly as all spillages are confined inside the dock and the

spilled material can be easily collected, sorted if necessary and disposed off properly. However, it

is more economical to use dry-docks for building and repairing ships rather than breaking ships.

Dry-dock method of ship breaking is used only in special cases (such as nuclear powered ships,

ships containing toxic residues) or if enforced by law.

Air Bag Method

In the Air-Bag Method, the ship is winched onto dry land over a slipway made up of inflatable

rubber bags. Once on dry land the ship is settled over a line of keel-blocks and the air bags are

removed. The ship is subsequently cut up in the usual way.

This method requires considerable infrastructure (though not on the scale of dry docks) and

highly skilled personnel for winching the ships on to dry land.

The biggest advantage of this method of ship breaking is that chances of water pollution are

greatly reduced. Fallen debris and contaminated soil of the beach can be easily collected, sorted

and disposed off properly. There is virtually no chance of tidal waters entering exposed areas of

the ship and carrying away solid residues and oil. Ship-board effluents can be easily pumped out

to shore based treatment and or / disposal systems. It is relatively much easier to contain and

collect spilled oil and other effluents during pumping operations. Like other methods of ship

breaking close to / on dry land, round the clock working and higher efficiency is attained.

Slip-way Method

In the slip-way method also, the ship is winched on to dry land over a concrete / masonry slipway

and cut up on dry land. This method is similar to that of the Air Bag method, except that instead

of a slip made of air bags, the ship is winched onto dry land over a concrete slip way.

3.5.2 Selected Ship Recycling Method for Kulpi Ship Recycling Facility

The yard layout has been conceptualized to meet requirement of Hong Kong and EU

Conventions. The vessels to be recycled will be brought in during high water and made to sit on

rails or air bag which will be extended to the highest of the high water. The vessel will be pulled

and the forward portion of the vessel will be positioned on the non-permeable concrete platform

located beyond HHL where primary cutting would take place. Subsequently, the cut portion of the

ship would be transferred to the Secondary cutting area using cranes. After secondary cutting,

materials would be segregated including the hazardous materials and stored in their designated

areas for final disposal. The process of pulling the ship on the concrete area and cutting would

continue until the whole ship is dismantled as per cutting plan. Local environment would be

monitored continuously using monitoring equipment. Hazardous materials would be disposed to

the authorized agencies. (Please see drawing below).

BOM 1800290 /October 2018 /v1.2 of 38

BOM 1800290 /October 2018 /v1.2 of 38

3.6 RAW MATERIALS

The only raw materials required for the project are LPG and Oxygen. The estimated requirements

of LPG and Oxygen are 240 t/yr and 1.5 x 106 Nm

3/yr respectively (for 60,000 t/yr production). In

addition HSD will be required for various diesel powered machinery, such as winches, pumps,

cranes, compressors, trucks etc. The estimated HSD requirement is ~35 kl/yr.

3.7 RESOURCE OPTIMIZATION / RECYCLING AND RESOURCE

Clear water after recovery of oil will be used for dust suppression operations. Effluents from

workers’ canteens and rest-rooms will be collected in sumps and used for either dust suppression

or irrigation of green belts.

3.8 SITE SERVICES

3.8.1 Water Requirement:

The peak water demand for the project is expected to be as follows:

Table F: Estimated Water Demand

Purpose Peak demand (m3/day)

Dust suppression 70

Potable Water ~30 (@ 60 l per capita)

TOTAL 100

The water required for dust suppression will be drawn from the river. The peak water demand for

workers’ use at the yard is expected to be 30 m3/day (@ ~60 l/day per capita for about 550

workers). The potable water will be supplied in tankers from bore-wells located at some distance

from the river.

3.8.2 Power Requirement

An estimated 60 kW electricity shall be required for illumination, operation of operation of

weighbridge, surveillance system & water pumps. This power shall be drawn from the grid. Each

of the four plots shall have its own DG Set for emergency power supply

3.8.3 Amenities

The project area is predominantly rural. The villages nearby have primary and middle schools,

electricity supply and piped water supply. Reasonable markets for supplying most daily needs

area available. There is a Primary Health Centre at Karanjali. Better educational and medical

facilities area available at Kulpi town (~7 km away), Kakdwip town (about 15 km away) and

Diamond Harbour – the sub-divisional town which is about 25 km away.

3.9 WASTES

The solid waste generation rates at Alang-Sosiya Ship Recycling yard during 2006 – 15 has been

used to estimate the probable waste generation rate at the proposed ship recycling yard at Kulpi.

Table 3.4: Waste Generation at Alang-Sosiya SRY

Year Total

LDT

Recycled

Hazardous Wastes Municipal Solid Wastes

(MSW)

Total Haz. Waste (t) Kg Haz. waste /

LDT

Total MSW

(t)

Kg MSW /

LDT

BOM 1800290 /October 2018 /v1.2 of 38

2006 - 07 760800 1032.86 1.357 46.205 0.061

2007 – 08 643437 2017.025 3.134 828.425 1.29

2008 - 09 1944162 5027.84 2.586 855.265 0.44

2009 – 10 2937802 5418.04 1.844 726.175 0.25

2010 – 11 2816236 8215.31 2.917 729.100 0.26

2011 – 12 3847000 8318.98 2.162 552.430 0.144

2012 - 13 3847566 10555.55 2.743 770.550 0.200

2013 - 14 3059891 7505.89 2.451 889.025 0.29

2014 - 15 2490152 7279.395 2.920 305.865 0.12

TOTAL 22347046 55370.89 2.478 5703.04 0.255

Source: EIA/EMP Report for Upgradation & Expansion of Alang – Sosiya SRY Prepared by MECON

Ltd. (2016)

Based on the above the maximum probable Hazardous Waste Generation at the proposed

project will be about 150 t / yr, whereas maximum probable MSW Generation will

probably be about 16 t / yr.

Wastes will be either sold to authorized waste recyclers or handed over to Authorised

TSDF Operators.

4.0 SITE ANALYSIS

4.1 CONNECTIVITY

The site of the proposed Ship Recycling Yard is located on the eastern bank of the

Hooghly River Estuary in Kulpi Block of South 24 Paragans District, West Bengal. The

proposed yard is covered under Tengra-char village.

The site is located about 70 km from Kolkata upstream the Hooghly River .

The proposed ship recycling yard will be set up on the northern side of the proposed

Marine Industry Cluster.

The project site can be approached from Kolkata through NH-117 via Diamond Harbour and

Kulpi. Presently there is a single lane metalled road linking the site to NH-117. A new approach

road, will be constructed linking the Marine Industry Cluster to NH-117. Service roads, suitable

for heavy vehicles, shall run the entire length of the yard.

The nearest railway stations are at Karanjali (east of the project site) and Nischintapur (south of

the project site) on Sealdah-Lakshikantapur-Kakdwip-Namkhana track of Eastern Railway. Both

railway stations are about 3 km away. The nearest airport is also at Kolkata (~70 km away). The

nearest all weather port is Haldia which is about 13 km south-west of the project on opposite of

the Hooghly River.

4.2 LAND FORM, LAND USE, OWNERSHIP

The site of the proposed ship recycling yard is located on the eastern bank of the Hooghly River

Estuary about 60 from the mouth of the river. The land is barely above the High Tide Line. The

land earmarked for the project comprises of a strip of grazing land on the river bank, agricultural

BOM 1800290 /October 2018 /v1.2 of 38

land and aquaculture ponds. The area is has already been acquired by Bengal Shipyard Limited

for setting up their Marine Industry Cluster.

There is no National Park, Wildlife Sanctuary, Elephant Reserve, Elephant Corridor, Habitat for

Migratory Birds, Tiger Reserve, Rserved Forest, Protected Forest or Defence Installation in the

study area. Indian Coast Guard’s Haldia Station is about 15 km to the south west on the bank of

Haldi River about a mile upstream of the confluence of Haldi River with Hooghly River.

As mentioned earlier, the project site is located on the eastern bank of Hooghly River Estuary.

In this region, the Hooghly River is tidal.

Thus the project area shall extend from the River (in this case may classified as CRZ – IV), Inter

Tidal Zone (in this case may classified as CRZ – IB) and Undisturbed & Undeveloped Rural

Area (CRZ –III).

4.3 TOPOGRAPHY

The ground level at the yard maximum of ~2 m above the High Tide Line. The tidal range is

about 6.3 m.

4.4 LAND USE

The lease entire project area is located on the bank of Hooghly River Estuary, comprising of

mostly of grazing land.

4.5 EXISTING INFRASTRUCTURE

The site of the ship recycling yard is linked to NH-117 by a metal road constructed under the

Pradhan Mantri Gram Sadak Yojana. The nearby villages have electricity supply.

4.6 SOIL CLASSIFICATION

The soil of the project area is alluvium and clay deposited by the Hooghly River.

4.7 CLIMATE

The study area lies in tropical region where climate is characterised by very hot summers

and mild winters.

The nearest observatory of India Meteorology Department is at Sagar Island Lighthouse,

which is about 37 km South-South-West of the project site.

Summer lasts from March to June. During this period when temperature ranges from a

mean daily maximum of 32.1°C to mean daily minimum of 24.0°C. Winter is from

December to February when temperature ranges from a mean daily maximum of 27.0°C

to mean daily minimum of 16.2°C. The mean annual rainfall is 1783.5 mm (average of

77.9 rainy days per year). The South-west monsoon lasts from June to October and the

area gets nearly 90% of the annual rainfall during this period. The three wettest months

area August (mean monthly rainfall of 396.8 mm; 16.5 rainy days), September (367.7

mm, 13.9 rainy days) and July (344.3 mm; 15.4 rainy days).

As per IMD Sagar Island records the annual predominant wind directions are South,

South-west, North and North-east.

4.8 SOCIAL INFRASTRUCTURE AVAILABLE:

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The project area is predominantly rural. The villages nearby have primary and middle

schools, electricity supply and piped water supply. Reasonable markets for supplying

most daily needs area available. There is a Primary Health Centre at Karanjali. Better

educational and medical facilities area available at Kulpi town (~7 km away), Kakdwip

town (about 15 km away) and Diamond Harbour – the sub-divisional town which is

about 25 km away.

BOM 1800290 /October 2018 /v1.2 of 38

5.0 PLANNING BRIEF:

5.1 PLANNING CONCEPT:

The yard has been planned to be developed in two phases i.e Phase I and Phase II. Phase

I will be developed over the first year with LDT capacity of 30000 LDT/year. Phase II,

which will be identical to Phase I facilities would commence on the fourth year and

capacity augmented to 60000 LDT/year. Phase II is also expected to take about one year

time to be fully functional.

5.2 LAND USE PLANNING:

The ship recycling yard shall be set up over 9.2 ha area. Of this 3.1 ha will be developed

as green belt. Of the balance 6.1 ha, the area earmarked for various purposes is as

follows (approx.):

1. Ship Cutting area: 2.3 ha

2. Material Processing Area: 0.6 ha

3. Material Storage Area: 0.6 ha

4. Vehicle parking area 0.3- ha

5. Offices & Workers’ Amenities: 1.8 ha

6. Roads: 0.5 ha

5.3 ASSESSMENT OF INFRASTRUCTURE DEMAND

The proposed project is a Greenfield project. So the entire infrastructure has to be

created from scratch. This includes:

• Approach Road

• Storm water drainage

• Power supply and illumination

• Arrangements for supply of industrial and drinking water

• Material processing and storage areas

• Storage facilities for LPG and Oxygen cylinders

• Workshops

• Vehicle parking area

• Fire fighting arrangements

• Amenities for workers and staff

• Offices

Most of the above will be part of the infrastructure for the proposed Marine Industry

Cluster.

5.4 Amenities / Facilities

Owners are keen to take elements of docking/Mooring at Pier and Landing method to

manage cost without compromising on health safety and environment related

requirements.

BOM 1800290 /October 2018 /v1.2 of 38

Despite the differences represented by different approaches to access the structures, the

actual sequential procedures and hence required resources are similar for all dismantling

facilities. Required resources or facilities can be grouped as follows:

I Primary block breaking area; Zone A/ Primary cutting area

II Secondary block breaking area; Zone B/Secondary Cutting Area

III Finishing, assorting and overhauling areas; Zone C/ Tertiary cutting area

IV Storage areas; Zone D

V Office buildings and emergency facilities; Zone E

VI Waste disposal facilities Zone F

The sub-division into zones is relevant for the drafting of design guidelines and is descriptive for

the required facilities. The development of an environmentally sound dismantling facility should

revolve around an understanding of the link between associated activities and the potential

environmental threat they represent.

(While the write up is ok, the drawing needs to be modified as per our lay out drawing or mark

the areas A,B,C,D etc on our lay out drawing to avoid confusion.)

Fig. 2.2: Conceptual lay out to understand requirements of recycling facility

Current practices represent a variety of approaches to the challenges involved and do not comply

with the requirements to facilities nor to methods adopted as identified in the following. An

example of a model ship-dismantling yard is shown in Figure 2.2. Such a facility will comprise

certain key functionalities:

• Workstations for secondary dismantling and sequential breakdown into component elements

• Hazardous and toxic materials removal requires specially-equipped workstations including the

provision of appropriate containment

• Temporary storage areas for benign materials and steelwork

• Secure storage areas for hazardous waste

• Storage areas for fully processed equipment and materials that is ready for reuse, recycling or

disposal

BOM 1800290 /October 2018 /v1.2 of 38

• Ships contain hazardous materials. Spills, leaks and releases will occur and no clean up can

remove 100% of them. Therefore, the most important environmental design aspect of any ship

breaking yard are measures to contain releases to within the confines of the yard and then collect

the spilled or released materials. The model facility approach can be applied to new ship

dismantling facilities.

Drawing in appendix to this report proposes infrastructure and plan of recycling yard based on

above conceptual layout, Copy of plan is given in following figure,

From conceptualizing layout plan for the proposed recycling facility, the requirements has been

identified like Storage go downs, open storage yards, worker’s amenity area, drinking water and

sanitation facility, firefighting system etc. Based on above, suitable locations within the proposed

location of the site have been identified where these facilities are to be developed. The basic

components of the vessel recycling facility are as follows:

• Impermeable Landing area

• Primary, secondary and tertiary cutting areas

• Dirty block cleaning and cutting area

• Hazardous Material handling and storage area

• Steel section and steel plates open storage area

• Machinery storage area/ Electrical items storage area

• Scrap and outfit material storage area

• Storage area for Hazardous material

• Miscellaneous items storage area

• Equipment like cranes Winches

• Utility area (Worker’s rest room, change room, etc.)

• Office and other Buildings

• First Aid Area

• Fire Station

• Emergency power supply area

• Worker accommodation

• Jetty for small boats for transportation and emergency response

• Bilge / Storm/ Oily water tanks

• Tanks for water needed for fire fighting

• Worker Accommodation

6.0 PROPOSED INFRASTRUCTURE:

6.1 INDUSTRIAL AREA

Processing Area

The material recovered from ships will be further processed which shall involve sorting,

dismantling, and cutting to manageable pieces. This work shall be carried over an area with

concrete flooring. Some of the sorting and dismantling work may be carried out in open sheds.

There shall be dedicated enclosures (covered or open) for storage of recovered materials and

segregated wastes. There shall be dedicated godowns for storage of LPG and Oxygen cylinders as

well as various tools and equipment.

BOM 1800290 /October 2018 /v1.2 of 38

Rest shelters with sanitary toilets, drinking water facilities and canteen and First Aid Centre shall

be available for workers adjacent to the material processing area.

6.2 SOCIAL INFRASTRUCTURE

Dispensary shall be commissioned at the Marine Industry Cluster for meeting the workers’

needs. This dispensary shall be manned during working shifts as well as some additional time. An

ambulance shall be always available for casualty evacuation.

Some of the workers will be provided accommodation within the Marine Industry Cluster. BSL

may arrange for transport facilities from NH-117 and Karanjali Railway station for staff and

workers at convenient times.

6.3 DRINKING WATER

Drinking water will be supplied in tankers which will draw water from bore wells located at a

distance from the Hooghly River. If possible arrangements will be made with local PHE /

Panchayat / Municipal authorities for supply of drinking water.

7.0 REHABILITATION & RESETTLEMENT (R&R) PLAN :

Land for the proposed project has already been acquired.

8.0 PROJECT SCHEDULE & COST ESTIMATE

8.1 LIKELY DATE OF START OF CONSTRUCTION AND LIKELY DATE OF

COMPLETION:

It is intended to start construction by mid-2019 and complete construction of the yard by first

quarter of 2020.

8.2 ESTIMATED PROJECT COST ALONG AND ECONOMIC VIABILITY OF THE

PROJECT

The project cost has been estimated to be total of 23.1 Core consisting of Capex of 14.7 Cr and

8.4 Cr for Phase I and Phase II respectively. This is based on use of second had equipment

identified by Bengal shipyard and based on price prevailing during first quarter of 2018.

BOM 1800290 /October 2018 /v1.2 of 38

9.0 ANALYSIS OF PROPOSAL (FINAL RECOMMENDATION)

The proposed ship-recycling yard will have the following benefits:

� It will recycle the material of ships which are no longer cost-effective and / or safe to operate.

Recycling material leads to massive savings in raw materials and fuel / energy. Land

degradation due to mining for raw materials will also not be necessary.

� It will supply iron and steel scrap and re-rollable plates for the domestic secondary steel

manufacturing and re-rolling industry.

� Usable machinery, spare parts and other materials salvaged from recycled ships will be used in

repair of ships at nearby ship repair facilities and for other purposes (e.g. DG Sets can be

redeployed elsewhere, cabin doors can be used in low cost housing, furniture & kitchen

appliances can be reused, life-boats can be used as small mechanized country-boats or fishing

boats etc.)

� It has stimulated growth of small scale industries which recycle materials (other than metals)

recovered from ships.

� It will generate considerable direct as well as indirect employment, in an area where there are

virtually no industries except perhaps some house-hold industries.

Considering the above points, setting up the proposed Ship Recycling Yard project has become

necessary.

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