World-wide container trade grew by 14%, whereas
in South Asia, China and Gulf it grew by 18% in 2008.
The three Pakistani terminals KICT, QICT, PICT must be
prepared to brace the lean months and may opt for
redundancy, as forecast for 2009 is more bleak. Pakistan
entered Indian cement market after overcoming many
obstacles of non-tariff barriers and exported about
786,000 tons cement to India.
India had levied 4%
custom duty and Rs 2/ton beaureu of Indian standards
charges. However since tension grew between the two
countries, Indians levied 8% countervailing duty in
addition to 4% customs duty, thus making exports from
Pakistan incompetitive. Earlier Pakistani cement being
imported was sold at 205/210 Indian Rs per bag, but now
it may cost 220/225 Rs/bag thus at par with local cement
industry sale price.
The rice export is already
in trouble due to tussle between REAP and TCP. Unlike
past year, the Karachi and Port Qasim had at least 10
rice loading vessels in addition to containers stuffed
with rice export, but there is only one vessel now at
Port Qasim loading 15,000 tons of rice of PNSC and there
is no rice loader at Karachi. It is feared that if this
dispute is not resolved, Pakistan will not be able to
match last year's export of rice of 2.0 billion USD,
whereas commodity prices continue to fall as
well.
Indians are already now in rice market to
offer tough competition to Pakistan. We missed an
opportunity to export rice worth 300 mill US dollar as
it could not participate in three different tenders of
0.750 mill tons. The usual blame game is on between
government and private exporters. Port of Singapore
authority, handled 29m TEU last year and its global
terminals handled 34.2 mill TEU. However the annualised
growth figures do not reflect the full story of how
dramatically volumes slumped in the later part of the
year.
Fearing recession PSAI has pulled out
itself from Mundra container terminal of Gujarat East
Coast India on flimsy grounds. PSA Chief Executive Eddie
Thieh warns of tough times ahead for PSA and the
industry in 2009, unless global economics are able to
recover in the course of 2009 with the help of huge
amounts of proposed spending by Governments around the
world. The container industry is likely to experience an
extremely difficult year.
PSAI is also a
concessionaire for Gwadar port, but has miserably failed
to honour the business plan and rumours are afoot that
after India, they may pull out from Gwadar, where they
have made no investment other than installing 2
refurbished gantries of 22 year old. Pakistan government
has activated the port by directing government cargo of
urea being imported and PSAI or Gwadar port has played
no role in inducing any regular line.
It appears
that Government will continue to subsidise the logistics
by paying Rs 2250 in a big way to keep our third
commercial port operational by forcing Government
controlled cargo only, as no private importers, be it
cement or rice, are willing to use the port unless
subsidised on logistics as there is only one
connectivity of Makran Coastal highway and no other
hinterland connectivity. Even if we have to subsidise,
we must keep the port operational and revoke the
contract with PSAI due to their failure to honour the
business plan.
Shanghai and Shenzhen ports of
China are witnessing record throughput falls conditions,
as manufacturing contracts are cancelled. Container
shipping volumes at the mainland's two largest ports
fell by the sharpest on record last month with
throughput in Shanghai dropping 6 percent and in
Shenzhen by 15.7 percent and the situation is expected
to deteriorate.
Whilst checking the statistics of
December 2008 of Shenzen Port, outward bound laden
containers fell 23% and inward by 27%, so is the slump
in US ports of Los Angles and Savanah and Long Beach due
to reduced Asian imports. The condition is quite
alarming and all terminal operators, including Cosco,
have ceased expansions. We must also be ready that QICT
due to financial turmoil in Dubai, DP world may also
delay building of extension at QICT and HPH may also go
slow on Keamari Groyne deep water port.
In view
of world-wide recession, it appears that Port Qasim, has
rightly decided to defer capital dredging costing 150
Mill USD, as DP world/QICT may not fulfil their
commitment as per the new contract to build and make
QICT extension berth operational in time. If
recessionary trends prevail, Pakistani ports who managed
to touch 1.9 mill TEUS, the figure may drop to 1.5 mill
TEUS and terminals will be left with surplus capacity,
thus no new investment is foreseeable.
We need
highly skilled experts in Ministry and Ports etc to stem
the problem skilfully and convert the crisis into
opportunity. It is feared that about 5000 people may
become redundant, if terminal operations brace lean
periods in 2009. Unlike Pakistan, Indian Government has
India tariff authority which regulates tariff of 12
major ports, the authority had fixed in 2006 fixed rates
at the private terminals and have recently declined APM
Nehru gate terminals for increasing handling
rates.
There is no regulatory regime for private
terminals in Pakistan and it is virtually free for all
and rates vary at three private terminals which is
seriously contested by Karachi Chamber of Commerce and
Industry. We can copy the blue print of Indian Tariff
authority and regulate all the private terminal charges
for the benefit of trade, whilst ensuring that terminal
operators may also make reasonable profit on their
investment.
Executive Committee Meeting of
Master Mariner Society of
Pakistan will be held at 17.30
Hrs. at Room No 18, Old Ralli
Brothers Building, Talpur Road,
Karachi.
Annual
Dinner
2010:
Master Mariners society of
Pakistan is holding it's Annual
Dinner 2011
TO HONOUROUR SENIOR
Members in recognition of their valuable
services to Pakistan Merchant Navy and to
promote professional competence to Maritime
Fraternity.
