Barge owners may lay off barges, retrench workers

by MICHAEL FISHER
Posted on 2008-11-15
PANAJI — The Goa Barge Owners Association (GBOA) will decide at its AGM on November 15 to lay off barges and retrench workers on account of slack business from the mines. Some 3,000 direct workers and 10,000 indirect workers are likely to be without jobs if the decision to lay off barges is passed.
With virtually no business coming from the mines including those from Karnataka, the GBOA has made a fervent appeal to the state and central governments to suspend taxes. The GBOA has also appealed to bankers to be lenient and rephrase the installments on the new barges purchased by the members. The barge owners have requested a one-year moratorium or till business picks up. Many of the barges are now lying idle for want of business, an official of the GBOA said.
The GBOA, comprising 180 members, also made an appeal to shippers to utilise only the barges of the Association and not to use the service of the additional barges from outside the Association. “If the current situation persists,” said a barge owner who wishes anonymity, “We will be forced to sell our vessels and retrench workers in an effort to avoid bankruptcy.”
“The barges, which usually make about 18 trips a day are now making 6 trips,” said Mr Atul Jadev, president of the Association adding, “We plan to lay off some barges”. “This drastic measure could affect over 3,000 direct workers, barge crew officers, dry dock and workshop staff as well as administration personnel,” said Mr William Costa, an official of GBOA.
At the general body crisis meeting, the Association will press the central and state governments with a list of measures which include doing away with a slew of taxes facing the barge owners until the mining situation in Goa gets better. The measures include reducing VAT on bunker diesel; reducing barge tax of Rs 2.60 lakh. Till date each barge has paid Rs 70,000 per quarter. For the next quarter the Association is requesting to do away with barge tax as no earnings are coming in, said Mr Jadev. Other measures to be discussed at the meet are suspension of the eight per cent duty tax on cargo from Karnataka, doing away the goods tax, which is 40 paise per tonne and the warfage charges. The Railways has responded to their plea and has reduced freight charges by 10 to 15 per cent on different iron ores grades.
Meanwhile, reports state that global iron ore prices may drop a moderate 20 per cent in the 2009 contract year but a collapse of the market is unlikely despite the current pessimism in the industry, a Citigroup official was quoted. “We are generally quite robust on commodities,” said Mr Alexander Molyneux, head of Asian metals and mining for Citigroup. “We think this (crisis) will be for a period of 12-18 months. By the time negotiations are completed next year, the excess stock situation would have been taken care of.” One of the key factors affecting current prices is the high stock levels at ports in China, the world’s biggest importer of iron ore.