Dead ships conduit of hawala money in ship-breaking business in Alang

NEW DELHI: Dead ships in Indian waters are not just an environmental hazard but a security threat as well, security agencies have informed the government. But the lucrative business of ship breaking at Alang, Gujarat, and easy regulations continue to make it difficult to monitor the ships surreptitiously landing in Indian waters, especially during the monsoon.

In the inter-ministerial meeting on ship breaking, representatives of the Coast Guard pointed out that various foreign-made communication devices brought on board the ships to be dismantled had been taken ashore and not dismantled as required under the regulations. They said that in some case, emergency beacons on board some of these ships had been found in areas near the Alang ship breaking yard in Gujarat.

But this is not the only security breach emanating out of the ship breaking industry. The naval intelligence had much earlier warned of the ship breaking industry being run on hawala money with cash buyers operating as fronts. The intelligence had noted that a large number of cash buyers are Pakistani nationals based in London and the UAE. "Due to large profit margins, the Dawood group appears to have invested heavily in cash buyers thus having a stake in most deals," it had recorded.

The key area of trouble for the authorities has been identifying the real owners of these ships coming in to Indian waters carrying flags of convenience and a corporate veil difficult to breach.

It was recorded by the government in May 2011 that the Gujarat Maritime Board (GMB) and customs were unable to
verify the records of some of the ships. It was suggested that the DG shipping be authorized to first verify records before the ships are allowed to dock at the Alang yards.

But the GMB officials said this would be acceptable to them only if the DG shipping was able to carry out such verification within 48 hours or it would presume that the records provided by the ship are authentic. The matter is yet to be resolved between the various authorities.