KARACHI, Aug 9: The deteriorating law and order situation in Balochistan has adversely affected ship-breaking activity at Gadani, where the number of ships brought for scrapping during last three months plummeted to four. Currently, only one ship is being scrapped.

The situation turned ugly when Pakistan Ship Breakers Association (PSBA) chairman Azam Malik was assassinated at Hub on May 21 this year on his way back home from his ship-breaking yard at Gadani.

This panicked investors, who on an average import four vessels a month from around the world for scrapping purposes. Last year, Gadani ship- breaking industry scrapped about 44 vessels with a total 188,242 light displacement tonnage (LDT).

However, after the May 21 tragedy buyers stopped visiting Gadani for purchasing ship plates and other scrap material vastly used by industry and other sectors.

According to a PSBA spokesman there had been no import of ships and all the four vessels, which reached the Gadani yard for scrapping, were contracted prior to the killing.

There are 15 ship-breaking yards having around 140 plots at the Gadani but presently, it gives a deserted look and people of the area, who earn their living by working in these yards, were rendered jobless.

He further said the ship-breaking industry at Gadani has imported 32 vessels and if the government does not take pragmatic steps for improving law and order situation there would be no breaking activity, which will deprive the government of sizeable revenue apart from unemployment of local people.

Another factor, which has dampened ship-breaking activity, is the non-acceptance of the proposals given by the Engineering Development Board (EDB) in the budget 2008-09 for the revival of ship-breaking industry.

The government instead increased general sales tax on ship plates from Rs3,500 to Rs4,848 per ton in the new budget.

The industry had been demanding a total ban on pipe ‘Phara’ (half-moon pipes), which are making their way into Pakistan through Afghanistan from the Central Asian states in a big way.

Pakistani ship-breakers are technologically far ahead of other regional countries. It specialises in breaking vessels of large tonnage, mostly oil tankers. Average investment required to set up a ship-breaking yard ranges between Rs35 to Rs50 million.

Pakistan’s annual steel consumption is estimated at 4.5 million tons. Pakistan Steel is producing only one million tons per annum, while the ship-breaking industry can provide another one million tons per annum.

However, steel from the local sources and import of various types of scrap, billets and bars is about 3 to 3.5 million tons, which is more than the country’s demand, industry sources said.

During 1999 the ship-breaking industry at Gadani stood second largest in the world after Taiwan and by far the largest in the sub-continent.