Lack of shipping industry in Pakistan: Foreign shipping firms handle 95% of trade
By Irfan Aligi
KARACHI: Despite having a full-fledged Ministry for Ports and Shipping, with a minister and a secretary, the government has not yet declared shipping business as an industry, a leading shipping agent told Daily Times on Friday.
A leader of Pakistan Shipping Agents Association (PSAA), who is also a life member of FPCCI and SAARC Chambers, who requested not to be named, told this scribe that Pakistans current trade volume was about $50 billion per annum with imports worth $30billion and exports around $18 billion.
Only five percent of the trade volume was being handled by domestic shipping businessmen while the remaining 95 percent was being handled by foreign enterprises, he said. The annual approximate freight charges are of about $12.5 billion.
Foreign shipping companies have 95 percent of the market share while the Pakistan National Shipping Corporation (PNSC) gets just five percent, he said, adding that this is because PNSC has got only 12 to 15 cargo ships, which all are outdated and have reached their scrapping time.
PNSC chiefs, he said, were nominated from Islamabad and mainly hailed from the armed forces were incompetent as they lacked the technical knowledge involved in the shipping business.
He said during 1970s, there were some 70 to 80-cargo ships with PNSC and private businessmen but after being nationalised, the private sector is reluctant to remain involved in the shipping business.
Detailing the deteriorating conditions of the shipping sector, he said the shipping sector is not considered for bank credit like other businesses in Pakistan. A cargo ship normally costs up to $30 or $40 million. Oil business forms a large part of the chartering business but the government had given the PNSC with the first right of refusal.
The PNSC could not take up the entire load of the business therefore foreign chartering services take up oil shipments. The government should allow level-playing field to all hands in shipping business but unfortunately the case is quite opposite to the needs of domestic businessmen.
The Karachi Shipyard and Engineering Works (KSEW) has not manufactured more than eight ships since 1960, when it was set-up. Like other institutions related to the shipping business, KSEW too was headed by people not competent to supervise its functioning.
He said government should privatise the PNSC but the process of privatisation must be neat and clean and it should not be given to hands of folklores. It is the need of the hour that the government should invest at least one billion dollars and give the shipping business the status of industry.
Coming to the Karachi Port Trust (KPT), he pointed out that the KPT Chairman, Vice Admiral (Retd), Ahmed Hayat has been incumbent for the last seven years although the official tenure for a single chairman was limited to three years.
A few of KPT berths had collapsed in early of August this year due to lack of proper care. Unfortunately, the KPT is engaged in developmental works outside the port area, making roads and under passes to please others. The KPT needs to be modernised, as it is the backbone of economy, he felt.
It is worth mentioning here that the shipping business was limited to only a few players and the Parsi community was mainly engaged in the business with just two or three ships in 1947. The PNSC was established in 1960s. The number of ships in both PNSC and private sector were around 90. In 1972, the government nationalised all private ships. At present, some 60 businessmen are in shipping business directly while it becomes about 100 when those who are indirectly linked to shipping business, are counted. The business employs about 5,000 people directly while 10,000 people serve as its indirect manpower. Major foreign ship chartering companies in Pakistan include MAERSK-SEALAND (Europe), HANJIN SHIPPING (Japan), MALAYSIAN SHIPPING (Malaysia), WOCL (Singapore) and AMERICAN PRESIDENT LINE (USA).
Daily Times - Leading News Resource of Pakistan
By Irfan Aligi
KARACHI: Despite having a full-fledged Ministry for Ports and Shipping, with a minister and a secretary, the government has not yet declared shipping business as an industry, a leading shipping agent told Daily Times on Friday.
A leader of Pakistan Shipping Agents Association (PSAA), who is also a life member of FPCCI and SAARC Chambers, who requested not to be named, told this scribe that Pakistans current trade volume was about $50 billion per annum with imports worth $30billion and exports around $18 billion.
Only five percent of the trade volume was being handled by domestic shipping businessmen while the remaining 95 percent was being handled by foreign enterprises, he said. The annual approximate freight charges are of about $12.5 billion.
Foreign shipping companies have 95 percent of the market share while the Pakistan National Shipping Corporation (PNSC) gets just five percent, he said, adding that this is because PNSC has got only 12 to 15 cargo ships, which all are outdated and have reached their scrapping time.
PNSC chiefs, he said, were nominated from Islamabad and mainly hailed from the armed forces were incompetent as they lacked the technical knowledge involved in the shipping business.
He said during 1970s, there were some 70 to 80-cargo ships with PNSC and private businessmen but after being nationalised, the private sector is reluctant to remain involved in the shipping business.
Detailing the deteriorating conditions of the shipping sector, he said the shipping sector is not considered for bank credit like other businesses in Pakistan. A cargo ship normally costs up to $30 or $40 million. Oil business forms a large part of the chartering business but the government had given the PNSC with the first right of refusal.
The PNSC could not take up the entire load of the business therefore foreign chartering services take up oil shipments. The government should allow level-playing field to all hands in shipping business but unfortunately the case is quite opposite to the needs of domestic businessmen.
The Karachi Shipyard and Engineering Works (KSEW) has not manufactured more than eight ships since 1960, when it was set-up. Like other institutions related to the shipping business, KSEW too was headed by people not competent to supervise its functioning.
He said government should privatise the PNSC but the process of privatisation must be neat and clean and it should not be given to hands of folklores. It is the need of the hour that the government should invest at least one billion dollars and give the shipping business the status of industry.
Coming to the Karachi Port Trust (KPT), he pointed out that the KPT Chairman, Vice Admiral (Retd), Ahmed Hayat has been incumbent for the last seven years although the official tenure for a single chairman was limited to three years.
A few of KPT berths had collapsed in early of August this year due to lack of proper care. Unfortunately, the KPT is engaged in developmental works outside the port area, making roads and under passes to please others. The KPT needs to be modernised, as it is the backbone of economy, he felt.
It is worth mentioning here that the shipping business was limited to only a few players and the Parsi community was mainly engaged in the business with just two or three ships in 1947. The PNSC was established in 1960s. The number of ships in both PNSC and private sector were around 90. In 1972, the government nationalised all private ships. At present, some 60 businessmen are in shipping business directly while it becomes about 100 when those who are indirectly linked to shipping business, are counted. The business employs about 5,000 people directly while 10,000 people serve as its indirect manpower. Major foreign ship chartering companies in Pakistan include MAERSK-SEALAND (Europe), HANJIN SHIPPING (Japan), MALAYSIAN SHIPPING (Malaysia), WOCL (Singapore) and AMERICAN PRESIDENT LINE (USA).
Daily Times - Leading News Resource of Pakistan
