The launch of a new corporate ship recycling policy by Eastern Pacific Shipping (EPS) has had a troubled start following the enforcement of a lockdown in India.
The Singapore-based company sold the 290,000-dwt Shagang Giant (built 1993) to the Shree Ram ship breaking yard in India in what Eastern Pacific heralded as the start of a new policy based on its environmental, social and governance (ESG) guidelines.
The sale, completed earlier this year, was reported to have been concluded at a price of $370 per ldt in line with green recycling prices at the time.
Shree Ram is recognised one of India’s most advanced shipbreaking yards in terms of its environmental and safety standards. It is used by leading shipping companies like Maersk Line, Gearbulk and NYK Line.
However, the sale fell through as force majeure was called by the Indian authorities on vessels calling at Indian ports, after the national lockdown imposed to stop the spread of coronavirus. The vessel has since sailed to the Pakistan port of Karachi.
Shree Ram is closely connected to cash buyer NKD Maritime, which has been contacted for comment.
It is understood the sale of the Shagang Giant is now the subject of a dispute between the buyers and sellers.
Demolition brokers are already taking the decision to sail to Karachi as an indication that the vessel will be demolished in Pakistan. “Pakistan does not have any green facilities which would seem to be saying the sellers are not abiding by their own ESG strategy,” one broker commented.
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Eastern Pacific declined to comment on the details of the sale. But a spokesman told TradeWinds that the company remains committed its the ESG strategy.
“It is clear that the Covid-19 situation and the lockdowns have affected the scrapyards operations,” he said. “What I can say is that Eastern Pacific remains committed to our ESG policy, but, like most of the global community, our primary focus at the moment is the continued health and safety of our people.”
Eastern Pacific’s ESG policy commits the company to demolishing ships at facilities which have a statement of compliance with the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships.
There has been some VLOC sale and purchase activity reported at Indian yards recently. The HBIS Sunrise (built 1992) was reported sold to India at a price of $310 per ldt.
However, the global lockdown is preventing ships from beaching in India and other ship recycling nations in the region.
Cash buyer GMS commented: “A backlog of vessels continues to idle outside all subcontinent locations, with contracts and cancelling dates being frustrated by this unprecedented crisis.”
