PICT, KICT AND QICT - IN LINE OF COMPARISON

MARIAM NASIR, Research Manager
May 28 - Jun 03, 2007

Container Terminal business in the past was a domestic industry fore most of the countries including Pakistan. Drastically the trend changed with the emergence of international Intermxxmlxm;Anknxk terminal operators. In 2005, terminals fully or partly owned by these companies accounted for over 58% of the container port capacity and 67% of global through put of 399mn TEUs.

Global port operators are showing keen interest in Pakistan with Dubai Ports World and Hutchison Ports already operating QICT and KICT respectively. Of the nine bidders to construct container terminal at the Keamari Groyne, four operators who have prequalified, namely Hutch is on Port Holdings (HPH), Dubai Port World, PSA International Singapore and Maersk-APM Denmark, are all global terminal operators.

Government of Pakistan has started to revitalize port and shipping sector of Pakistan expectedly this would escalate the deepening and widening of navigation channels of Karachi Port and Port Qasim to provide 24 hour navigation.

TRAFFIC FORECASTS AT KPT AND PQA

 

KPT

PQA

M. tones

2004-05A

2009-10F

ACGR

2004-05A

2009-10F

ACGR

General Cargo

10.74

15.48

7.60

0.82

20.0

20.0

Dry Cargo

4.07

5.17

4.90

1.74

24.0

24.0

Liquid Bulk

14.82

20.0

6.20

4.60

11.0

11.0

Iron ore and Coal Berth

-

-

-

3.46

19.2

19.2

Containers (Nos. 000)

894

1340

8.40

446

18.0

18.0

*Annual Compound Growth Rate

CONTAINER TERMINAL OPERATORS IN PAKISTAN

Since mid 90s, three specialized container terminals have started operations in Pakistan namely QICT, KICT and PICT. However, growing containerized trade demands addition of more container handling facilities. Consequently, two new container terminals, one at Port Qasim and the other at Keamari Groyne, have been planned to fulfill capacity needs. Addition of two new operators and capacity expansion by existing operators will increase the ports annual container handling capacity from little over 2mn TEUs in FY06 to 5mn TEUs by FY12.

The Karachi Port Trust (KPT) is the premier shipping port of Pakistan handling over 60% of the international trade cargo of the country. The Karachi port registered an overall growth of 13 percent cargo during 2005-06. It is a deep water port with 11km long approach channel providing safe navigation for up to 75,000 DWT tankers, modern container vessels, bulk carriers and general cargo ships. The Port has 30 dry cargo berths including two specialized container terminals, namely, Karachi Int'l Container Terminal (KICT) and Pakistan International Container Terminal (PICT) operating on a total of 9 berths. Major proportion of Karachi's external trade is handled by KPT. More than 90% of Pakistan's international trade is transported by the sea route. Cargo handling at KPT increased at CAGR of 13% in FY06.

QASIM INTERNATIONAL CONTAINER TERMINAL (QICT)

KPT long monopoly as a lone international port of Pakistan has been broken 1973 when Port Qasim was set up at a distance of about 45 km south-east of Karachi. Functioned primarily to smooth the progress of and to hasten the raw material imports of Pakistan Steel Mills. However, now it faces stiff competition from Port Qasim. In 1997, Port Qasim started with specialized container terminal operations through contract of QICT awarded on a BOO (Build Own Operate) basis to a consortium of P&O Ports (acquired by DP World in 2006). Since the start of its operations, Port Qasim has expanded its facilities to ten cargo handling berths, three of which are used by Qasim International Container Terminal (QICT). QICT has three berths with annual handling capacity of 0.6mn TEUs.

In mid-August 2006 between Port Qasim and Dubai Port World (DPW) for DPW to construct a second container Terminal at Port Qasim (QICT-2) on Built Operate Transfer basis it will be constructed in three phases. Once completed it will enhance the overall capacity of PQA to 1.75 million TEUs whose first phase with annual handling capacity of 300k-TEUs. The first container terminal has also been converted from BOO to BOT and the royalty has been increased from $4 to $9.2 per move. The new terminal will be built at a cost of US$ 240 million and will be ready in 2009. Sixty percent of the total containers from Pakistan were exported via QICT, whilst about the same percentage of all vehicles imported into Pakistan were via QICT.

There is only one floating LNG terminal in the world at the moment, which is in Teesside, UK, the terminal at Port Qasim would be the second. In this regard PQA has been signed an between Port Qasim Authority and Pakistan Gas Port Ltd for setting up of a floating Liquid Natural Gas terminal. The terminal will be established on Build, Operate and Transfer (BOT) basis and will take 30 months to construct. Once completed, it will handle 3 million tons of LNG per year and will be able to accommodate tankers of 75,000 tonnes dead weight. The only ship registered under Pakistani flag, following the recent rule change on registration of vessels in Pakistan, has decided to discontinue the service and also there are currently only three vessels in the world which transport LNG and all three are owned by US.

The Fauji Oil Terminal Company (Fotco) is constructing a new oil jetty at Port Qasim which will be completed in late 2008. Fotoco has recently signed a Memorandum of Understanding (MoU) with Indus Oil Refinery for handling and pumping of crude oil at the new jetty for the Indus Oil Refinery. Indus Oil Refinery intend re-locate and reconstruct to increase its capacity to become the sixth petroleum refinery in the country. A consortium of Single Buoy Moorings, Dana Gas of UAE and Granada Group of USA has signed an agreement to establish a Liquefied Natural Gas (LNG) terminal at Port Qasim, Karachi, at a cost of $200 million. The terminal would have a capacity to handle 3.5 million tons of LNG per year.

PAKISTAN INTERNATIONAL CONTAINER TERMINAL (PICT)

The company was founded in 2002 and is headquartered in Karachi, Pakistan. PICT commenced commercial operations in August 2002 within six weeks of taking over possession of the container terminal area from KPT with the existing container handling equipment of Premier Mercantile Services (PMS); henceforth, the company started generating business and paying Royalty and Land Rental to KPT within six weeks of taking the possession of the area. PICT is sponsored by the Premier Mercantile Services Group (PMS Group) that was established in 1964 with its core activities relating to the shipping industry, including stevedoring, terminal operations and shipping agencies. PICT has 4 Ship-to-Shore (STS) Quay Cranes, 2 Mobile Harbour Cranes, 10 Rubber Tyred Gantry (RTG) Cranes and other ancillary equipment. The dedicated area for the Terminal is 220,000 square meters. The Quay Wall length is 600 meters. Amongst the present container terminals in Pakistan, PICT has the deepest designed berths, with a planned alongside depth of 13.5 meters and a current alongside depth of 12.2 meters. An entire Power Generation Plant of 7.4 Mega Watt capacity is installed with Cummins (UK) generators. PICT is enhancing the capacity of the Power Plant to 10 Mega Watt. PICT is the only Container Terminal in Pakistan Sponsored and owned by Pakistanis. PICT has received the best container terminal operator award, in the Middle East and India sub-continent, for the outstanding performance. The award is given by the Daily Lloyds list of United Kingdom. The other two contenders for the award were: Aqaba Container Terminal and Dubai Port World.

KARACHI INTERNATIONAL CONTAINER TERMINAL LIMITED (KICT)

KICT, the first container terminal at the Port of Karachi, is Pakistan's leading container terminal operator. In the context of the international trade environment. KICTL plays a pivotal role in facilitating sea trade of the country. KICTL is the first container terminal operator in Pakistan to be ISPS compliant and is ISO 9001:2000 certified. It is a subsidiary of the internationally known Hutchison Port Holdings (HPH) Group and provides its clients with the benefits of expertise. With 32% of the market share, KICT has annual handling capacity of 0.5mn TEU at 3 dedicated berths (berth number 28 - 30). In 2005, it renegotiated its previous 20 year BOT contract (effective from 1998 to 2018) with KPT to acquire two additional berths (26 and 27 of KPT) and to increase the concession period till 2025. Upon completion of the third phase of its expansion in FY08, KICT will have the handling capacity of 1mn TEUs, twice the size of PICT.

KICTL provides fast, reliable and consistent 'one-window' service with state-of-the-art systems & equipment to its customers. Its high service standards, integrity and extensive use of best practices considerably ease the pressure for the customers in today's fast moving and demanding logistics business. Its strategic location within the Port of Karachi, gives it the most comparative advantage above its competitors. As a result, shipping lines always prefer to shift from conventional berths to KICTL to avail its reliable and faster services.