An interview with Arshad Munir
Ahmad, MD, KSEW
By Syed M. Aslam
May 08 - 21, 2000
Pakistan's ports and shipping infrastructure primarily comprise two
seaports, a single shipping company, the state-owned Pakistan National Shipping
Corporation (PNSC) having a fleet of 15 vessels long past their economic lives, and a
work-starved shipyard which in its better days have built over 440 vessels including ships
and an array of port utility vessels including tugs, barges, port survey vessels and also
fishing vessels. It has not only built ocean-going ships for PNSC but also utility vessels
for Karachi Port Trust, Maritime Surveillance Agency, Pakistan Navy. Cargo vessels for
Iran, Saudi Arabia, China, UAE, etc. , were also built.
The lack of work at the KSEW today is really an extension of an overall
deterioration in the ports and shipping sector. Of the two operational ports, Port Qasim
still primarily remains a day-time port after almost two decades of operation. The average
age of twelve break-bulk carriers and the three used container vessels acquired by the
PNSC is 18 years and 13 years respectively. The aged fleet poses an immense financial
challenge for the PNSC which is once again heading in red for the year ended June 30 this
year as it requires frequent repair, maintenance and dry-docking works but also makes it
inescapable for it to replace the fleet in the near future. This has become all the more
important as the much stricter security code by the International Maritime Organisation
which was extended for the relief of many developing countries like Pakistan will be
effectively enforced in the near future.
PAGE talked to the Managing Director of the KSEW, Arshad Munir
Ahmad, a serving Rear Admiral of the Pakistan Navy, to highlight the problems of the KSEW,
which in turn highlight the overall stagnation of the ports and shipping infrastructure.
He also suggested measures for the revamping of the sector, particularly the PNSC, which
today lifts just a fraction of the national cargoes and whose failure to replace its
outdated fleet could mean the end of shipping in Pakistan.
As mentioned earlier, the lack of work has turned KSEW which used to be
the hub of ship-building activities in the region in the late 50s and early 80s into a
work-starved organisation. Today, it is unable to pay the salaries to its workers and
staff for the last two months. There is just enough work for the KPT today, not only in
its core activity, the ship building, but also ship repairing. The years of neglect and
the lack of local support have taken a heavy toll on the KSEW.
At present, KSEW has a limited number of small ship-building and
maintenance works. The ship-building works in process include 3 tugs and two pusher tugs
from the Pakistan Navy, the body work on the Agosta B submarine for the Pakistan Navy in
collaboration with the Naval Dockyard. The maintenance works include maintenance and
repair work of PNSC vessel Islamabad, KPT tugs and vessels of Maritime Surveillance Agency
(MSA). KSEW is still awaiting the release of Rs 20 million from the PNSC for the repair
works on m.v Sarghoda recently.
Rear Admiral Arshad Munir Ahmad told PAGE that KSEW needs Rs 700
million annually just to breakeven but is falling short of 25 per cent of this bare
minimum revenue just to keep afloat. The absence of any ship-building orders over the
years and the lack of support by the PNSC which did not provide a single ship repair and
maintenance work during the last decade has taken a heavy toll on the
The KSEW Managing Director stressed the need for the restoration of 30
per cent subsidy which was withdrawn by the government of the local ship-building orders
some two years ago. He informed PAGE that it is traditional for the governments
around the world to subsidise the ship-building orders by as much as 50 per cent to
protect the interests of their shipyards in this era of cut-throat competition. Citing the
example of the EU he said that the European Union has plans to approach the WTO against
Korea which offers 40 per cent subsidy on ship-building orders.
He said that KSEW has tried to win the ship dry-docking, maintenance
and repair orders from the PNSC which preferred to have its vessels service outside the
country due to longer times taken by the KSEW. The ship repair work from PNSC has also
started coming to the KSEW as we have assured it our commitment for on-time finishing of a
work. We have already convinced the PNSC with the timely repair of m.v. Sarghoda recently
and same will be the case with m.v. Islamabad the ongoing works on which will be completed
at least 3-4 days early. We have got the firm commitment from the PNSC to send its ships
for repairs to the KSEW for next six months, he added.
He said that the KSEW has initiated an aggressive marketing strategy,
particularly aimed at securing ship-building orders, as it offers the lowest ship-building
rates in the region and is fully equipped to build ocean-going vessels upto 26,000 DWT.
KSEW has also approached PNSC to submit its plans for next 10 years including the
replacement of its existing fleet which is inescapable in next five years. The same is the
case with the fleet of Pakistan Navy.
He stressed that the government should allow same protection to the
sole national ship-building shipyard, the KSEW which it allows to the local auto industry.
If the local auto industry can be given protection against the foreign imports through
high discouraging tariff why not the government discourage the import of ships which can
be built in the country, he asked.