top of page

By:

Correspondent

21 August 2024 at 3:50:16 pm

Power Shield

When a 99 percent shareholder is not been made an accused in a controversial land deal but a one percent shareholder has been named as one, an investigation has some explaining to do. The Bombay High Court has now demanded that very explanation in the Mundhwa land case involving NCP MP Parth Pawar, son of the late Ajit Pawar, raising the eternal question whether political influence quietly alters the way in which the law of the land is applied. A democracy cannot have one standard of scrutiny...

Power Shield

When a 99 percent shareholder is not been made an accused in a controversial land deal but a one percent shareholder has been named as one, an investigation has some explaining to do. The Bombay High Court has now demanded that very explanation in the Mundhwa land case involving NCP MP Parth Pawar, son of the late Ajit Pawar, raising the eternal question whether political influence quietly alters the way in which the law of the land is applied. A democracy cannot have one standard of scrutiny for the politically connected and another for everyone else. Pawar, a Rajya Sabha MP, holds 99 percent of Amadea Enterprises LLP, the company that acquired the disputed land. The remaining 1 percent is held by Digvijay Patil, another partner and director who has been named as an accused. The land in question is a large government-controlled parcel in Pune. The company that acquired it is overwhelmingly owned by Pawar. The land is in Mundhwa, an increasingly valuable area of eastern Pune that has been transformed by the city’s rapid expansion. The parcel covers about 40 acres and has a complicated legal history. It was classified as Mahar Watan land - a historical category of land grant - and was in government possession and leased to the Botanical Survey of India. The FIR in the case alleges that it was transferred to Amadea Enterprises without the mandatory approval of the state government at knockoff prices far beyond market value. The transaction has subsequently faced scrutiny on several fronts. Authorities imposed about Rs. 21 crore in stamp duty and penalties on Amadea Enterprises; the company’s appeal against that order was rejected. A Pune civil court also ordered the sale deed cancelled, declaring it void from the beginning. So, what evidence led investigators to make such a stark distinction between the two shareholders? What was the precise basis on which investigators concluded that Pawar’s overwhelming stake in the company did not warrant the same scrutiny? The High Court had already raised the issue in September after a submission before it alleged that Pawar had not been named because he was “very highly influential.” The state is expected to protect public land, enforce its own rules and investigate alleged wrongdoing without fear or favour. Yet when the transaction involves the son of a senior political figure, the machinery of the state must now explain why its investigation appears to have stopped short of the person with the overwhelming economic interest in the company. Power is supposed to make public officials more accountable, not less. Political office is not a private shield and family connections are not a legal exemption. The ultimate scandal in the Mundhwa case would be the possibility that proximity to power can determine who gets investigated, who gets protected and who gets left carrying the blame.

Indian Shipbuilding A Must Win Marathon

Writer: Capt. Naveen S Singhal
Capt. Naveen S Singhal
Dec 5, 2024
4 min read
Shipbuilding

With a coastline of 7500 KM, it is hard to imagine, that for the first 20 years (1947-1967) India had no ‘shipping ministry’. In 1967 a Shipping ministry “coupled” with ROAD transport was established. Since then, this ministry has been on a name changing ride, not once, not twice but six times. In 2009 the “ROAD Transport and Highways” was de-coupled and ‘Shipping’ ministry was formed. Turning point came in 2015 with a clear maritime vision for 2030 and 2047. Ministry was re-christened, aptly to Ministry of “Ports, Shipping and Waterways” in 2020.


Why is Shipbuilding important for a country?

a. A Shipyard becomes an opportunity hub and like a queen bee requires the support of an industrial colony to manufacture machinery and equipment.

b. National Shipyards support fleet renewal needs of the Navy.

c. Contributes to national GDP, increases inflow of FOREX.


Korea shipbuilding is 8% of GDP. Japan’s automobile industry is 2.9% of GDP. India’s shipbuilding a meagre 0.000578% of GDP. In context, India’s pharmaceutical industry, ranked third largest in the world is 1.72% of India’s GDP.


International Shipbuilding Market

The market is estimated to reach around USD 200 billion by 2029, growing at a CAGR of 4.84%. While India is at bottom with 0.07% of world share, behind Philippines 1.5% and Vietnam 1%, however on the positive side, India has done well in taking care of its defence needs, with 37 of 39 Naval ships being built in India yards. Rear Admiral S Shrikhande researching on maritime as a Fellow at Wollongong University, Australia, says “Shipbuilding in India needs both, serious incentivisation and dogged determination and not harping on being a big ship breaking country. That Garden Reach shipyard has a $54 million order for merchant ships from a German owner, is a good sign.”


Were Shipyards of 20th century in Flight mode?

Prominent shipyards in India were built in the colonial period. Mazagon Dock 1774, Garden reach 1884, Hindustan shipyard 1941 to cater to British navy and merchant fleet needs. Cochin shipyard 1972, Adani Katupalli 2013, Reliance Naval and Engineering, Rajula Gujarat 1997 and others have limited capacity, hence a lot more work to do. Capt. Subhangshu Dutt (Singapore) a mariner and now a shipowner, says “GOI should hold hands in any collaboration till the marriage with the foreign entity is reasonably stable. He also suggests that “new shipbuilding sites should be given to existing successful shipyards since they have decades of experience and talent. Consortium of 3 or more parties may also be good idea”.


Shipbuilding GOLD

As per SPLASH report the demand for LCO2 carriers could reach 2,500 ships by 2050. As per other estimates, 40% of global fleet of ships could have wind propulsion by 2050. A surge in such vessels is due to an unparallel waves of decarbonization in the shipping industry. Demand for ships with ‘carbon neutral’ badges, such as Dual fuel, Wind assisted, Nuclear fuel ships, Hydrogen powered ships, Liquified CO2 (LCO2) carrier, is outstripping supply. A must in the ‘bucket list’ of every Shipyard. Pinning down a standard ROI in shipbuilding is not easy, but experts suggest it could range from 4% to 15% for the high demand ‘carbon neutral’ ships. While an LNG new build vessel could cost US$ 250 million upwards.


International collaboration

On China’s shipbuilding success story, Manoj Pandalanghat (Singapore) a mariner and ship owner believes that “China has around 50 active Shipyards. Each have a few large dry docks. In each dock two or more large vessels are built simultaneously. Thus, a single yard is able to roll out 2/3 vessels/month, 36 vessels/year and 50 shipyards roll out 1800 vessels/year”.


China could be a jaldi-5, but India needs a sturdy Mount Fiji. Besides technology, Japanese bring the most important hand baggage of soft-skills and culture, essential for success from keel laying to delivery. Maruti’s is a standing example.


Food for thought for New Delhi

a. Expertise: Hire Naval Architects and shipbuilding experts with current international experience.

b. Government assistance: Land, Financial support, subsidies and timebound clearances.

c. Monitoring: PMO should monitor the first 5 to 10 years till Shipbuilding takes-off on this long-haul flight to destination 2047.


India’s Shipbuilding is expected to grow to $237 billion by year 2047. On a back of the envelope calculations this works out to about 4% of India’s 2047 projected GDP of $ 5 trillion. While cars are driven on roads, however the Ministry of roads and transport has little to do with “Automobile manufacturing”. On a similar note, ‘Shipbuilding’ as an industry has little to do with Ports, Shipping and Waterways, thus it may be worthwhile to consider a separate ‘Ship-building’ wing in the Ministry of Ports, Shipping and Waterways headed by a dynamic cabinet rank minister. Since 2047 targets are stiff and an uphill task, so in all probabilities, the officials in Ministry of Ports, Shipping and Waterways are likely to push beneath the carpet, delays and failures of Shipbuilding with sweet success stories of “Ports, Shipping and Waterways” and if this does happen then India will not only miss the Shipbuilding bus of 21st century but a lot more from a national security and strategic perspective.


(The author is a Shipping and Marine consultant. Member Singapore Shipping Association and empaneled with IMO as a specialist consultant. Views personal.)

Comments

bottom of page