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Recycling industry says scrap cargo stuck at ports, charges not waived; 6,000 units face closure

Noting a drop in export-import (EXIM) cargo due to supply chain disruptions on account of the COVID-19 pandemic, the government last month asked India's all 12 major ports to defer the lease rentals and licence fees-related charges for April, May and June besides waiving rentals in proportion to the cargo drop and not to levy penalties.

PTI|
Last Updated: May 01, 2020, 06.52 PM IST
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About 6,000 recycling units face crisis-like situation, putting livelihood of about 3 lakh people dependent on them at stake as containers with imported scrap are stranded at ports amid COVID-19 outbreak while shipping lines, ICDs and CFSs fail to waive levies despite government order, as per recycling body MRAI. According to industry sources, more than 2.5 lakh containers have got stuck for clearances at ports amid lockdown in the wake of COVID-19 outbreak.

Seeking PMO intervention to address the issue, Material Recycling Association of India (MRAI) has said shipping lines and CFSs (container freight station)/ICDs (Inland Container Depot) are not adhering to the guidelines by the Ministry of Shipping for waiving levies, container detention, demurrage etc charges on import cargo.

This has led to containers containing imported scrap worth several lakhs getting stranded, making the industry miserable, it said.

"This has also led to over 3 lakh people who depend on recycling sector for their livelihood, staring at starvation. About 30 per cent of this work force comprises women, who are engaged in segregation of scraps, before melting,"it added.

Noting a drop in export-import (EXIM) cargo due to supply chain disruptions on account of the COVID-19 pandemic, the government last month asked India's all 12 major ports to defer the lease rentals and licence fees-related charges for April, May and June besides waiving rentals in proportion to the cargo drop and not to levy penalties.

In a letter, the shipping ministry had asked the ports to provide relief in the form of exemptions/ remission of charges to the shipping liners, exporters, importers, logistics providers and other stakeholders hit by the coronavirus outbreak. The relief measures are aimed at boosting EXIM cargo by supporting and rebuilding the logistics chain.

However, MRAI said these orders are being violated by shipping lines, CFSs/ICDs and added that financial difficulties due to this has put a large number of people at stress as the recycling sector also indirectly supports livelihood of rag pickers & smaller scrap aggregators.

"Whereas the 6,000 odd MSME units in the recycling segment from metal and paper are adhering to government order to give salaries to their employees who are mainly from the weaker section of the society, here are foreign shipping lines and their associates who do not even listen to Ministry of Shipping guidelines" said Sanjay Mehta, President, MRAI.

MRAI alleged that these are the same shipping lines which make millions of dollars from the Indian trade and industry but refuse to extend a helping hand at this grievous situation, where everyone is contributing to help the country along with the government.

The recycling industry urged the government to intervene into the matter for survival of 6,000 MSME units and their employees by ensuring implementation of its orders including waiver of charges else warned that this could result in Indian importers losing "more than Rs 80,000 crore in detention/demurrage charges to the lines which are foreign entities."

Queries sent to Jawaharlal Nehru Port Trust (JNPT) Chairman Sanjay Sethi and Mumbai Port Chairman Sanjay Bhatia remained unanswered.

JNPT is India's number one container port, handling more than half of the container cargo across all major ports in India.

Queries sent to Shipping Ministry officials too remained unanswered.

In a letter to all ports chairman and CMDs, the ministry has said:"The logistics chain-related businesses including traders, importers, exporters, port operators, shipping lines and transporters are facing a huge challenge in maintaining their businesses due to a lower trade volume as well as cash flow issues. Therefore, it is required that some relief measures are taken to support and rebuild the chain."

"The lockdown measures and associated disruptions in the logistics chain have impacted the Indian ports and port users. There is an impact in the form of drop in imports and export volumes, delays in evacuation of cargo, cash flow issues etc., resulting in inability of port users, concessionaires and other stakeholders to fulfil their obligations to port authorities, banks and lenders," it added.

Under this extraordinary situation, all major ports have been directed that they shall allow free storage time to all port users during the lockdown, besides "deferment of April, May and June months' annual lease, rentals, licence fee on pro-rata basis without any interest", according to the letter.

India has 12 major ports -- Deendayal (erstwhile Kandla), Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambaranar, Visakhapatnam, Paradip and Kolkata (including Haldia) that handled nearly 705 million tonnes of cargo in 2019-20.
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