Petty Officer Cruel Kev's Blog to honor our Sailors, Mariners, Marines, Coast Guardsmen, Airmen & Soldiers of the United States as well as Sailors & Mariners World wide.
Sunday, April 06, 2008
Ship Breakers Seek End To Scrap Pipes’ Smuggling
The unabated smuggling of scrapped steel pipes from the former Soviet states is damaging the profitability of the Pakistani ship breaking industry and causing revenue loss to the government, ship breakers said. A growing number of re-rolling mills are buying these pipes instead of ship scrap to make mild bars. Locally called Pharra (torn) these steel pipes were used in Soviet era to supply gas. There is an international network of suppliers that excavates and ships them to regional buyers. These low quality pipes are more than 50 years old. They reach Pakistan via Afghanistan and are used in making low quality cheap mild bars. For making mild bars these steel pipes are cut vertically, thus the name Pharra (torn). Azam Malik, Chairman of Pakistan Ship Breakers Association (PSBA) told The News that the association is planning to arrange a meeting with the new government on the issue of curbing Pharra smuggling in the country. He said that due to the availability of more ships at the Giddani ship breaking yard these days the prices of mild bars (sarya) has come down to 65,000 per tonne from 75,000 per tonnes in a week or so. The re-rolling steel industries that make mild bars through Pharra advocate its smuggling claiming that this helps in putting a lid on the sky-rocketing steel prices in the country.Haji Asif Bhagani, Co-owner of Faizan Steel said, “the use of Pharra has reduced the cost of production of the mild bars.” The rising prices of mild bars are adding up to the price of construction making it harder for the middle-income group to build or purchase housing. At present, smuggling of Pharra goes in favour of masses as they have option of buying cheaper mild bars made from Pharra or high quality expensive mild bars made from billets.” On the other hand, ship-breaking industry in Pakistan has been demanding the government to stop Pharra smuggling. Ship breakers say that scrap for re-rolling mills is being imported under the garb of material meant for melting. The difference between the two is a cut down of 15 per cent sales tax. Moreover, smelters and re-rollers are not buying scrap from ship breakers as they can purchase Pharra at much cheaper rates. The ship breaking industry is not in a position to purchase ships for scrapping that are much expensive these days in the international market. Pakistan Ship Breaking Association (PSBA) claims that around 9 years back in 1999, there were some 25,000 workers at Gaddani Ship Breaking Yard and now there are only 2,000 workers as the industry is on decline and less number of ships to scrap at the ship yard. The steel industry has been actively recycling metal for more than 150 years all over the world. It is cheaper to recycle steel than to produce it through mining iron ore and then to make new steel through long process. “Re rolling mills are supporting Pharra smuggling because it is good for making cheap mild bars, but it produces low quality mild bars,” said Abdul Sattar Bhagani, partner in Abdul Sattar Noor Muhammad Group, a group that has number of different kind of steel mills, “Mild bars made from ship scrap are finer than those produced by pharra.” Government should take action against steel pipes smuggling from Afghanistan; it is easier for government to ban these illegal activities, he said. The smuggling of Soviet era steel pipes via Afghanistan is going on for the last 15 years. These pipes are so abundant in former soviet states that they can easily fulfil the local scrap demand for another couple of decades, Sattar said. Shahab Ahmed, a ship breaker said that smuggling of steel pipes is going unabated through porous Pak-Afghan border. In some areas people simply use these pipes in place of sarya, something highly un-advisable from construction point of view. Highlighting the importance of ship breaking, re-rolling and smelting industries he said that recycling reduces energy consumption. Recycling one tonne of steel saves approximately 1,100 kilograms of iron ore, 630 kilograms of coal, and 55 kilograms of limestone. He said that steel maintains its original physical properties in the recycling process and also saves capital, labour and raw materials needed to refine steel from iron ore.