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At Rs 4 cr,cost of salvaging stranded Pavit far exceeds worth

The cost of salvaging and towing the controversial stranded tanker vessel MT Pavit now adds up to a little over Rs 4 crore,which is much more than the worth of the ship.

Written by Smita Nair | Mumbai |
December 22, 2011 2:46:45 am

The cost of salvaging and towing the controversial stranded tanker vessel MT Pavit now adds up to a little over Rs 4 crore,which is much more than the worth of the ship. Officials said at least six agencies are waiting to get their dues cleared after the owners refused to pay.

The Maharashtra Maritime Board (MMB),the nodal agency for claims,is now anticipating a situation where the total claims will exceed the actual recovery from the auction of the vessel.

The MMB has received claims from Shipping Corporation of India,Great Offshore Salvers,Coast Guard,Dighi Port,Dabhol Port. The towing cost from Shipping Corporation of India for the Emergency Towing Vessel (ETW) and Great Offshore Salvers for the entire towing,salvage and beaching operation comes to a over $0.9 million (over Rs 4 crore).

Indian Coast Guard,MMD,Dighi Port and Dabhol Port together have another bill of Rs 10 lakh. All the bills were received in the second week of August when the dollar was worth less. The government has seen a 15 per cent increase in the outstanding bills in the past four months due to fluctuating dollar rate.

MMB has got a notice from the Great Offshore Salvers,which asked the agency to expedite the auction as they still hold the possessory lien and would like to have priority over other claimants. MMB appointed a legal advisor on Tuesday to handle legal situations arising during the auction.

On October 28,after all attempts to get a favourable response from the Dubai-based owners Pavit Shipping and Prime Tankers LLC,MMB found that the company had made an insurance claim of $1.4 million. “We have now assumed that they have got the insurance as usually companies stop responding to any notice when their claims have been settled. The vessel was insured for $1.4 million three years ago,so with depreciation the value will deplete. Besides,it was the insurance company which started speaking to us on behalf of the owners,” said an official privy to the developments.

Another hurdle is that the MMB is waiting for the Assembly to end before it is in a position to clear the dues of valuation of the vessel. An independent valuer was appointed to assess the current value of the vessel for fixing its auction price. “We have asked for two estimates,one its commercial value if the ship is purchased for commercial purposes and the second,a scrap value if a scrap dealer goes to buy it. We will not know the valuation till we pay the valuer and that may take time,” said an official.

A bigger issue is the 20 per cent customs duty that is expected to be levied if a foreign buyer buys the vessel for commercial plying. “This is also a pressing issue as if we add the 20 per cent,the cost of the vessel will go much higher,making it non-lucrative to buy it for commercial purpose. If that happens,the government will be short of cash to clear the dues of many of the people,” feels an expert. The office of the Directorate General of Shipping is now in talks with the Customs Department.

A suggestion also has been made by officials that if the vessel is to be scrapped,the major part of breaking the vessel should be done in Dabhol Port,where the vessel is now beached. This suggestion has been given to save additional transport cost. Initially,the vessel faced a lot of protests from the fishermen village in Dighi Port before it was shifted to Dabhol in Ratnagiri. The vessel was beached as the charges to keep her floating were not bearable.

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