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Bleak Forecast Container Trade / Terminals

 
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.



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MMSP ELECTION - 2015

Dear Members
kindly note that submission of Nomination form has been extended till 9 May 2015, due to annual dinner event. Ensure that the Nomination form should reach MMSP office on or 9 May 2015.

Regards
Capt. Khawaja Wasiuddin Siddiqi Dupty Election Commissioner

MMSP IS HOLDING ITS ANNUAL DINNER- 2015

To honour
Chief Patron of MMSP and Chief of Naval Staff Who has kindly consented to be the Chief Guest on this Occasion at Convention Hall, Pakistan Maritime Museum Near Karsaz, Karachi,
on Friday, the 24 April 2015

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PAKISTAN MARINE ACADEMY IN DOLDRUM

If, we go into time Tunnel, the era from 2003-2007, efforts were made to convert Pakistan Marine Academy to Pakistan Maritime University, so that different faculties of Maritime education may be established locally.

 

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May 14, 2015

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.

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