In International Shipping News 30/09/2016
The country will face a crippled shipping industry and dislocated economy should Department of Transportation (DOTr) Secretary Arthur Tugade pursue plans to phase out ships aged 35 years old and above, a group of local shipowners warned.
“The whole industry is at stake here…this will totally dislocate business,” said Philippine Roro Operators Association (PROA) president Lucio E. Lim Jr. during the joint meeting of PROA and the Visayan Association of Ferryboat and Coastwise Service Operations Inc. (VAFCSO) yesterday at the Casino Español in Cebu City.
More than half or 65 percent of all vessels in the Philippines are second-hand importations from Japan, Korea, China, and Europe and are now more than three decades old. Tugade earlier said the government intends to phase them out for safety reasons.
“Let us not rush this. Please study it carefully. The effect of this will be very big to the economy,” Lim added.
In Central Visayas alone, this could affect 365 vessels that transport thousands of passengers and bulk of cargo daily. Economically, this is expected to spell slow trade activities as 80 percent of goods are said to be transported by sea.
Maritime Industry Authority (Marina) Enforcement Services Head lawyer Vera Joy S. Ban-eg, however, said that there is no written policy from DOTr yet about Tugade’s pronoucements.
The transportation agency cited safety as reason for the vessel retirement. Maritime accidents in the country left thousands of passengers dead in the past years.
Earlier, Marina 7 Director Nanette Villamor Dinopol said they are yet to come up with a policy for this and suggested approaching financial institutions to help ship owners and operators acquire newer vessels.
While safety is everybody’s concern, shipowners believe a ship’s age is not a measure of safety. Rather, shipowners said safety is a matter of responsible ownership and having competent crew members.
“Age of individual ship is not an indicator of quality and that the condition of an individual ship is ultimately determined by the standard of its maintenance,” the organizations said, quoting a 2014-2015 study of the International Chamber of Shipping (ICS).
In addition, the group has also opposed Executive Order 909 by former President Gloria Macapagal-Arroyo that provides incentives to new ships. Lim called it “economic sabotage.”
EO 909 provides incentives to new vessels that will invest in an International Association of Classification Societies (IACS)-classed newly-constructed ships.
Those who qualify will be given protection of investment and route protection for a period of six years by imposing a moratorium on the deployment of additional vessels or not allowing other vessels to ply in the applied link or route.
Likewise, domestic shipowners granted “pioneer status” will be given priority in the issuance of certificate of public convenience (CPC) by Marina in the route it proposes to operate, whether the route has an existing ship operator or not.
“We are not against the government giving incentives to brand new vessels. They can actually give them everything, except giving the monopoly of routes,” said Lim, adding that Marina, which had issued a circular last year, did not consult with local shipowners on the matter.
Other incentives to new ships include giving a 50 percent discount on regular fees in all applications and renewals of ship documents, licenses, certificates and permits.
The EO also provides special ramp or berthing facility to IACS-classed brand new or newly constructed ships.
To date, only two companies have modernized their fleets with new vessels namely, the Archipelago Philippine Ferries Corporation and Starlite Ferries.
Source: Sun Star Cebu
