Interview with Mr Aasim Siddiqui – Managing Director, Marine Group of Companies
Aasim Siddiqui is the Group Managing Director of Marine Group of Companies, which is the biggest and most diversified business group in the shipping, logistics and cargo handling industry in Pakistan. Aasim Siddiqui has actively developed and financed various transport and logistics projects in Pakistan in the last 20 years. He is also on the board of directors of other 14 companies of the group. The signature projects of Mr. Aasim Siddiqui include; Pakistan International Container Terminal (PICT), the only public listed container terminal of Pakistan, which is now operated as part of ICTSI terminals; Pakistan International Bulk Terminal (PIBT) the first modern coal/cement terminal also a public listed company in the Pakistan Stock Exchange and Pakistan Intermodal Ltd (PIL), Pakistan’s first private freight train operator connecting the ports with the inland container depots through rail-road linkages which is going to be commissioned in 2016. He has been actively running CSR programs of Marine Group for last five years and has established two research-oriented Think Tank organizations working on poverty alleviation and public policy under the names of Organization for Social Development Initiatives (OSDI) and Manzil Pakistan respectively. Mr. Aasim Siddiqui is also a part of the executive committee of the All Pakistan Shipping Association (APSA) and is playing a significant role in the development of shipping and logistics industry.
Aasim Siddiqui, managing Pakistan Marine Group of Companies, one of the largest business houses in Pakistan having two major terminals at Karachi Port and Port Qasim was confident about China-Pakistan Economic Corridor (CPEC) potential to bring a demographic change by generating enormous economic activity across the country yet besides economic opportunities, this project also calls for deft handling especially repayment of huge amount of dollars without affecting the balance of payment mechanism of the country, this he said in an interview.
PAGE: DO YOU THINK THERE IS ANY ELEMENT OF RISK REGARDING REPAYMENT OF INVESTMENT UNDER THE SOVEREIGN GUARANTEE?
AASIM SIDDIQUI: It should be kept in mind that most of the project coming up under CPEC are commercial by nature and in partnership with the private sector in Pakistan and the repayment of the investment would be made through the revenue generated through power consumers whosoever will consume power will pay the price. However this revenue will be generated in term of PKR while repayment of the loans would require in foreign currency especially in dollar. This is an important aspect because our foreign exchange earnings are already under pressure because of declining exports, static home remittances which I think have come to a saturation point. Under this situation and to manage balance of payment Pakistan has to increase its export volumes by producing export surplus at competitive prices to remain in the export market.
According to World Bank due to stalled industries in Faisalabad for short of energy we are losing at least two percent export earnings. If the power supplies to Faisalabad industries are restored through CPEC power projects this will immediately have a positive impact on our exports and we will be adding at least two percent increase in our export regime. However, it is a matter of concern that the balance between import and export is widening with every passing day, which calls for immediate steps to deal with the situation.
PAGE: YOUR COMMENTS ON EVER HEIGHTENING OF POLITICAL NOISE IN THE COUNTRY AND ITS POSSIBLE IMPACT ON CPEC?
AASIM SIDDIQUI: No doubt that the political noise has heightened out of proportion which may have a negative impact yet it may slowdown the process but it cannot stop this journey as this project offers a win-win situation for both Pakistan and China. However, the government should take the people into confidence by sharing its mechanism of repayment of investment and maintaining balance of payment in a proper shape. It is a valid question that how the repayment of the private investors or the loans would be repaid as there are concern that if the price of dollar jumps to Rs200 a dollar how the repayment would be managed. To answer this question the government should have worked out proper planning to answer the question of repayments and maintaining balance of payments.
PAGE: YOUR LATEST PROJECT PAKISTAN INTERNATIONAL BULK TERMINAL (PIBT)M WHICH HAS BEEN RECENTLY PUT INTO OPERATION FOR HANDING COAL AND CEMENT AT PORT QASIM, HOW THIS OFF LOADED COAL WOULD BE TRANSPORTED TO UP COUNTRY FROM PIBT WHILE THE COUNTRY HAS NOT SUFFICIENT CARGO TRANSPORTATION OF COAL TO THE UPCOUNTRY DESTINATIONS WHERE COAL POWER PLANTS ARE LOCATED?
AASIM SIDDIQUI: Actually our responsibility is to receive the coal from the vessels calling on our terminal; the transportation of coal to upcountry would be carried out by the railways who have recently acquired around 55 new state of the art locomotives having enough capacity to lift coal from terminal to upcountry destinations. These locomotives are supposed to serve coal power plants in Sahiwal and in the Northern parts of the country.
PAGE: THERE WERE REPORTS THAT UNDER THE CPEC PROJECT CHINA HAS EXPRESSED ITS WILLINGNESS TO LAY A NEW RAILWAY TRACK FROM KARACHI TO UPCOUNTRY, WHAT IS THE LATEST ON THAT PROJECT?
AASIM SIDDIQUI: In fact the government desires to expand transportation capacity of goods train from Karachi to Peshawar under CPEC. At present around 100 trains a day are operating specifically for goods train under the CPEC. The capacity would be doubled from 100 trains to 200 trains a day that would be great and facilitate good transportation from Karachi to upcountry.
PAGE: WHAT IS THE CURRENT CAPACITY OF PIBT?
AASIM SIDDIQUI: At present the terminal has a capacity to hand around 12 millions of tons of coal and it can be further expanded when need arise up to 16 million tons.
PAGE: THERE WERE REPORTS THAT K-ELECTRIC HAS ALSO ACQUIRED SPACE AT THE COAL TERMINAL, HOW MANY OTHER CLIENTS IS INTERESTED TO BOOK SPACE AT YOUR TERMINAL?
AASIM SIDDIQUI: Actually this project with K-Electric is not on so far because they are more involved in selling of K-Electric to Chinese investors, while it is heard that K-Electric is also considering shifting their fuel management on LNG for power generation, so it is pre-matured to speak on that project. Actually it is in early stage as there was a soft commissioning of the terminal and it is operating on trial basis, however, so far two vessels called on and off loaded coal at our terminal. You know there is an 8 km conveyer belt at the terminal, which also required civil and mechanical expertise to run it professionally.
PAGE: WHAT WOULD BE ECONOMIC CONTRIBUTION OF PIBT FOR PAKISTAN?
AASIM SIDDIQUI: It has great potential to serve the national economy, at present the calling vessels have to wait for many days due to lack of any dedicated berth for dirty cargo, sometimes it takes a month to clear the coal cargo, which cost massive cost for the importers.
Similarly the cement producers are also expanding their capacity by 50 percent due to ever increasing demand of cement. With the commissioning of PIBT the vessels would be free with 48 hours while with the railway services the imported coal or cement would be delivered at their destinations within a week, which you may consider the role of this terminal for the economy in the days to come. This would help cost saving to the cement and coal power stations because of reduction of cost of doing business.
PAGE: UNDER THE CPEC HOW MANY COAL-BASED POWER PROJECTS ARE IN THE PIPELINE ALONGSIDE CHINA-PAKISTAN ECONOMIC CORRIDOR?
AASIM SIDDIQUI: Exact number of power projects under CPEC is not readily available; however this forthcoming coal power plant will add at least 15,000MW to the national grid. The Pakistan International Bulk Terminal would facilitate these power plants by ensuring sustainable supply of coal. It may, however, be clarified that besides coal-based power plants coming up under CPEC more power plants based on alternative energy resources especially solar and wind power projects are also coming up under this huge economic program.
PAGE: SINCE YOU ARE CLOSE TO THIS CPEC PROJECTS WOULD YOU LIKE TO SHARE THAT BESIDES POWER PROJECTS WHICH ARE OTHER PROJECTS POTENTIALLY IMPORTANT TO HAVE A GAME CHANGER IMPACT ON PAKISTAN ECONOMY?
AASIM SIDDIQUI: Actually this is not only a road connectivity between Pakistan and China rather it is really an economic corridor that would generate economic activity alongside the corridor and provide enormous job opportunities for Pakistanis. In this respect the government has identified 9 strategic points across the country to establish Special Economic Zone where factories and manufacturing units would be established both by the local and foreign investors.
CPEC is not just rail, road and air connectivity but Chinese are developing economic zones not only in Pakistan but all over the world under their One Belt One Road vision. Under this project Chinese are development ten ports in Africa region while they have developed zones in Sri Lanka and more are coming up in that country under this vision.