SHIPPING SECTOR

Going Forward

MUHAMMAD AQEEL KHAN, Research Associate
May 28 - Jun 03, 2007

Ports and shipping sector enjoys key importance in economic uplift of the country. Every possible step will be taken to modernize the port and shipping sector. With no sufficient amount of capital invested into the shipping sector, the entire fleet of the nation is left to only 24 ships, 15 of which are held by Pakistan National Shipping Corporation. The rest are owned by Tri-Star Shipping Corporation and a few other shipping lines.

PRIVATE SECTOR PARTICIPATION

Foreign shipping lines dominate the Pakistan shipping industry. Due to small size and inadequate capacity, the national fleet is presently shipping approximately 10 percent of the regular cargo and 25 percent of the liquid build cargo consequently a healthy competition in shipping between public and private sector ended. The traditional ship owners disappeared from the scene. Now the Government has introduced a Policy to boost private investment in the shipping sector by giving a host of incentives. Existing vessels, grossly insufficient to cater trade requirements of Pakistan, for that has to rely heavily on private international shipping companies which presently are handling 95 per cent of Pakistanís sea borne trade. The Government has issued 35 licenses to private sector companies, but so far only two companies have started up - the Tri-Star Shipping Company with one tanker, and the Millwalla Shipping Company with only one small vessel. Although there are only two companies under the Pakistan national flag in the private sector, a number of companies are operating under flags of their own convenience.

 

TOTAL PORTS TRAFFIC FORECAST

CARGO

UNIT

2004-05

FORECAST (2009-10)

ACGR. PER CENT

General Cargo

M. Tons

11.55

17.54

8.70

Dry Cargo

M. Tons

5.81

10.24

12.0

Liquid Bulk

M. Tons

19.58

28.00

7.40

Iron Ore and Coal

M. Tons

3.46

8.31

19.2

Containers (Nos.)

Nos. (000)

1340

2361

12.0

The country has two major seaports viz. Karachi and Bin Qasim. Besides, Gwadar Fish Harbour cum Mini Port has been substantially completed. Feasibility Study to develop Keti Bunder as a Fish Harbour cum Mini Port is currently under process. All the ports and the shipping lines are not sufficient to meet the growing demands of Pakistan and other countries and regions that these countries cater to regions include Kashmir, Western China, Afghanistan and Central Asian Republics.

POLICY AND STRATEGY

The new shipping policy was announced by the Government in June 2006 which would permit the banks and other financial institutes to mortgage ships. The Government has also exempted the ship owning under Pakistani flag from capital gains tax till 2020. The shipping industry in Pakistan has seen many ups and downs. In 1947, Pakistan had only two ships with a total deadweight tonnage of about 9,600 tons and a blush oil tanker was operating in the private sector. The number increased to 30 ships by the end of 1960 and further rose to 74 in 1974. During these years the government gave full support to the private sector to develop the merchant fleet.

CONCLUSION

Ports and shipping of Pakistan are to play a vital role in regional trade activity in the future, close coordination among various departments of ports and shipping is being established so that their performance could be improved. Port and shipping can prove a source of foreign exchange through international trade activity.