40pc cut in port tariffs recommended

Saturday July 04, 2009

KARACHI: The Task Force on Maritime Industry (TFMI), constituted by federal government, has recommended to the Ministry of Ports and Shipping reduction in the wet charges at Karachi Port by around $10,200, or 40.47 percent, and $9,400, or 38.52 percent, at Port Qasim.

Moreover, the task force has supported a "maximum limit" of $15,000 on wet charges at the local ports, considered to be the most expensive in the region. The wet charges include port dues, pilotage, tuggage, berth hire, etc, and are paid by shipping lines to the port operator.

The move is part of a drive launched by the Ministry of Ports and Shipping to bring the local port charges down in a bid to achieve competitiveness in exports and economies of scale at home.

TFMI, comprising maritime experts like Naeem Sarfraz, Mohammed A Rajpar, former Justice Shaiq Usmani, Dr Zia Rizvi, Captain Changez Khan Niazi and Rear Admiral Arshad Munir, has made these recommendations on the basis of "comprehensive data" gathered from various shipping lines, including United Arab Shipping Company (UASC), Maersk Line MECL Service and CMA-CGM EPIC service which route through the ports of Arabian Gulf, Red Sea, Pakistan, India, etc.

According to TFMI's comparative study, current port charges for A-2 type vessel, of 32,534 GRT, are $24,400 at Port Qasim, and $25,200 at Karachi Port, against the $20,100 of Neva Shiva, $6,400 of Colombo Port, $5,800 of Jebel Ali, $4,400 of Khor Fakkan, and $3,000 of Sohar-Muscat.

A bigger vessel, of 50,968 GRT from Maersk Line MECL Service, carrying 5,500 TEUs directly to US from Port Qasim pays $39,506 to the port operator as per call port wet charges, the task force ascertained. It also found that per call port charges at Port Qasim for a CMA-CGM EPIC ship, of 73,157 GRT, voyaging directly to Europe, stands at $56,121.

Terming the local pilotage and tuggage charges as "lopsided", the TFMI observed that a hired tug of 65-ton BPM AZD costs the port $7,500 ($1,500 for per ship handling) during its four to five movements a day. Less number of moves would take the per act cost to around $2,000.

KPT and PQA charge around $970 per inward or outward movement, in which two tugs are used to push the vessel into or outside the port, the task force said. Placing the per act pilotage cost of a vessel at around $350 to $500, the TFMI calculated the one-way pilotage charges for CMA-CGM vessels at $9,510 each for inward and outward pilotage services. "Port dues at Port Qasim of $0.32 per GRT equates $23,410 per call for CMA-CGM vessels," the task force observed.

According to TFMI's "simple calculation", if these vessels in a single call bring and load about 1,000 TEUs to and from Pakistani ports they have to pay $56 per TEU as port call charges. "If you compare the same with Jebel Ali, then it is $6 per TEU," the task force said.

The task force has apprised the government that no shipping line ever pays these exorbitant charges out of its pocket, and certainly adds the same in the freight rates. "It is recommended that we should rationalise the port call charges (wet) and place a maximum limit on the charges," TFMI recommended.

"For example, the maximum charge of the vessel should be $15,000 per call of 24 hours," it said. According to TFMI, if implemented, the proposed port tariff regime would encourage shipping lines to bring bigger vessels in, while the reduced cost of port dues on freight would result in reduction in freight levels of Pakistan's imports and exports.

Business Recorder, however, learnt that these recommendations had come from one member of the Task Force, which was yet to develop consensus on a mutually agreed formula for rationalisation of port tariffs. With traders and port users expecting at least 30 percent decrease in port charges, the Ministry of Ports and Shipping on June 18, 2009 had given 30 days to the port and terminal operators to table their proposals on the subject.


(BRecorder)