Shipping firms seek PM’s help to stay afloat

  1. Indian shipping companies have submitted a memorandum to the Prime Minister seeking his immediate intervention to scrap a recent notification which would force shipping companies to close down.
  2. They have said that the amended Right of First Refusal(ROF) policy equates a foreign ship taken on hire,with a ship actually owned under the Indian flag by an Indian company.Besides it gives priority in government contracts to those ships,just because they were once built in India.Thus, they argue that this would force the domestic shipping Industry to shut down resulting in heavy job losses.
  3. Earlier,only local shipping companies got a right to match the lowest rate offered by a foreign flag in tenders issued by State-run firms for hiring ships.If Indian shipping companies declined,the foreign flag ship that had quoted the lowest rate was allowed to carry the cargo.
  4. However,the amended RoFR policy shifted the balance of power in favour of Indian-built ships from Indian-flagged ships irrespective of whether such Indian-built ships are offered by Indian or foreign companies.In effect,the government had extended cargo support to foreign entities if they offer Indian-built ships on public tenders.
  5. Hence,the new sequencing of RoFR priority will be Indian-built vessels followed by Indian-flagged vessels.In case none of the bidders under the first and second priority eligible to exercise the RoFR,matches the lowest rate quoted by a foreign ship owner offering a non-Indian built ship in a tender then the charter shall be awarded to the lowest bidder.