The inability of the
Pakistani shipping to perform is taking a heavy toll on the national
economy in more ways than one. It has made the country threateningly
dependent of foreign shipping companies to cater to its sea-borne trade
which is costing it a massive two billion dollars a year. It has also
contributed in pushing prices of petroleum and products to unaffordable
levels for the chagrin of industry, trade and people alike.
Is there a link between
shipping and petroleum prices? The General Secretary of Pakistan
Merchant Navy Officers' Association, Sheikh Muhammad Iqbal, claims that
yes there as far as Pakistan is concerned. "In 1970 the national
merchant marine fleet comprised 71 large ocean-going vessels.
Thirty-three years later the sole state-owned flag carrier, the Pakistan
National Shipping Corporation (PNSC), has a total of 13 vessels the
majority of whom have long past their economic lives. PNSC's fleet today
includes 10 combi vessels, 2 container vessels and a dilapidated crude
tanker, M.T. Jauhar. The sole tanker is lying idle for last three months
or so; 2 months in Dubai, one month in Karachi and is presently
dry-docking in China for repair.
the restrictions to lift crude oil cargoes the PNSC was granted
exclusive transportation contracts of crude oil for refineries in the
country on prevailing market rates, the AFRA rates either on M.T. Jauhar
or on charter. The PNSC is transporting crude oil at around $ 7 per
metric ton which is more than twice the AFRA rates which fluctuates
between $ 2.5-3 per metric ton. This has been going for last couple of
years thus pushing the landed cost of the crude the ultimate price of
which is paid by the consumers. A little before the October elections
last year the Economic Coordination Committee of the cabinet took notice
of this overcharging by the PNSC and allowed PNSC to transport crude oil
at 34 WS (World Scale) over and above the AFRA or market rates. The
measure was meant to allow the financially strapped organization to keep
charging a reduced 33 per cent premium over and above the AFRA rates
instead of charging more than double the market rates. However, the PNSC
flaunted the order and instead increased an already high prices of crude
transportation by an another 33 per cent. The additional burden of
transportation of crude is borne by the exchequers and the consumers
have to borne the increased cost of petroleum products and fuel."
Sheikh said that the sole
crude tanker Jauhar is in a dilapidated state and at presently can carry
a maximum of 65,000 metric tones of the crude instead of 70,000 metric
tonnes previously. As the PNSC is able to lift only around 2-2.5 million
tonnes of the total 6 million tonnes of the crude required annually. The
rest of the crude requirement of around 4.5 million is carried by
tankers chartered by the PNSC. It is not hard to imagine the price the
industry, trade and common people are paying for bailing out the PNSC
despite being unable to perform."
Failure to develop the
shipping sector also has immense human dimensions and human costs.
Pakistan houses a sizeable population of bonafide merchant navy officers
as well as seafarers. Thirty-three years ago there were around 2,000
bonafide officers and national marine fleet comprised of 71 vessels.
Back then the Pakistani merchant marine officers were not only able to
find off-shore as well as shore-based management jobs within the country
but also in many other countries including Sri Lanka, Singapore, the
Gulf, UK, Australia, etc. The population of merchant navy officers in
Pakistan today stands over 12,500 but the off-shore and shore-based jobs
for them in the country has been drastically reduced as national fleet
today comprises of just 13 vessels. After 9/11 the situation has
worsened due to stricter visa restrictions in many parts of the world.
The PNSC can hardly absorb 300 seafarers, both officers and crew.
"There was a time
when over 2,500 officers were able to find gainful employment of foreign
shipping lines. Even prior to 9/11 over 1,600 officers were working
abroad but today just about 500 officers are working on flag of
convenience ships outside the country. In addition, the shore-based jobs
in many countries including the US, Singapore, Italy, etc., have been
dried up almost totally."
Despite many heavy
subsidies, financial restructuring, and privileges including the right
of first refusal and exclusive rights of lifting cargoes, such a crude,
the 13-vessel PNSC fleet is feared to shrink even further in the next
few years, particularly once the stricter maritime security laws come in
force. Failure to induct new tonnage would deliver a severe blow to an
already ailing shipping in Pakistan.
It is also imperative to
find out why the Pakistan Merchant Marine Policy-2001 has failed to
attract private investment in shipping particularly as it deregulated
the shipping sector to provide level playing field to both the private
and the public. In addition, the matter of closing up of the employment
opportunities for the Pakistani officers and crew overseas should also
be taken up by the government in the larger interest of the country and