INTERVIEW: VICE ADMIRAL M ASAD QURESHI HI (M)
Chairman Port Qasim Authority
June 25 - July 01, 2007
Q: Since you have taken over the charge of Chairman, what improvement and developments have been instituted at the Port ?
Ans: To quantify improvement and development is a difficult task. There are a number of visible and invisible effects associated with improvement and development. On top of the list of invisible effects is to infuse a sense of responsibility and create an atmosphere where each individual working for the port feels himself devoted for the cause of betterment and promotion of Port Qasim. Being a commercial institution, the focal point is to create awareness towards customer orientation. Port attendance and discipline have been improved considerably. There is a visible cultural change amongst officers and staff. Previously various offices were located at scattered places with minimal communication. Port users and port personnel faced difficulties for day to day affairs. Offices have been reallocated for effective working and better communications. Port users now have not to go to various scattered places for petty issues. Efforts are on way to provide facilities under one window. Training needs are being strengthened to enhance port efficiency and communication skills. Officers and staff have been educated regarding working culture, effective file movement, disciplinary procedures, dress code etc. Efforts have been made for transparent contracts/agreements to obviate malpractice. PQA has signed an MoU with Transparency International to ensure visibility and precision.
When I took over, I observed that Port enjoyed no projection in the media and business circles. I invited electronic media and enlightened them the progress made in shipping industry and more particularly the development taking place at the port in terms of berths, deepening of channel and provision of infrastructure facilities being provided in PQA industrial estate. I gave a vision to the Port which states:
'To be the Port of first choice for customers and stakeholders providing time-efficient and cost-effective port services and facilitating Industrialization thereby making tangible contribution to economic development of Pakistan'
The policy shift has started yielding results and I feel proud to proclaim that PQA's performance has tremendously improved. During current financial year a cargo volume of more than 26 million tonnes is expected to be handled at the port.
Q2: What are the existing facilities available at PQA?
Ans: PQA offers a variety of facilities which are considered viable to potential customers. PQA's 45 km long navigation channel is capable to accommodate vessels up to 75,000 DWT (Dead Weight Tonnage). With regards to berths and terminals, a dedicated Iron Ore & Coal Berth is operative for raw material imports of Pakistan Steel Mills for 50,000 DWT vessels since 1980. Specialized eco-friendly Oil Terminal with designed capacity of 9 million tonnes per annum can accommodate ships of up to 75,000 dwt. For general, bulk and break-bulk cargo Marginal Wharf comprising four multi-purpose berths for vessels upto 40,000 dwt is available with all backup facilities. A state-of-the-art liquid chemical terminal Engro Vopak Terminal caters for all types of chemical imports of the country. To handle box trade , a dual-berth Container Terminal to cater for 45,000 dwt vessels is functional along with an LPG terminal with handling capacity of 2 million tonnes per annum. PQA has its own fleet of tugs, pilot boats for berthing of deep draft vessels. PQA also provides night pilotage facilities to vessels up to 210 meters length. The port is also endowed with 12,000 acres of land for development of port-based industrial and commercial projects.
Q3: What is the handling capacity of PQA and its share in country's import and export?
Ans: Handling capacity of the port is a relative term which changes with technological advances, innovative handling procedures and sophisticated cargo handling equipment. However the current annual handling capacity of different berths & terminals can be described as:
5 to 6 million tonnes
FOTCO Oil Terminal
9.0 million tonnes
Iron Ore & Coal berth
3.0 million tonnes
Engro Vopak Terminal
4.0 million tonnes
PROGAS LPG Terminal
2 million tonnes
0.5 million TEUs
PQA is currently operating on around 60% berth utilization factor which calls for development of new berths/terminals for capacity building. Recently, construction work of Liquid Cargo Terminal was formally inaugurated by President of Pakistan. The Liquid Cargo Terminal will be able to handle 4 million tonnes of oil per annum.
Establishment of Port Qasim was visualized towards attaining an efficient communication network for distribution of goods across the seafronts. Currently PQA handles more than 40 % of the total sea borne trade of Pakistan. During the current financial year 2006-07, a cargo volume of more than 26 million tonnes is expected to be handled at PQA depicting a growth rate of 15% over corresponding period.
Q: What are the port charges being realized by PQA and what reductions have been made in order to make Port more competitive.
Ans: Two types of port charges are levied on ships and cargo. Wet Charges leviable on ships i.e.
While dry charges are leviable on cargo mainly comprise
It may, however, be observed that PQA has recently rationalized port charges whereby a number of charges been reduced, procedures have been simplified and streamlined. There has generally been a false impression that Pakistani ports are most expensive in the region. In fact the purview is generally limited to wet charges whereby Pakistani ports appear expensive when compared to tariffs of ports like Singapore, Dubai and Sri Lanka which primarily are transshipment ports having lower wet charges to induce trade. It is the Port call cost i.e. wet and dry charges, that really determine the expensiveness of a port. A comparative study of Port call costs reveals that Port Qasim is the most competitive port when compared with tariffs of the ports of Karachi, Sri Lanka, Dubai, Mumbai and Singapore, but this is not the end. PQA is focused on cost recovery rather than profit maximization. All future infrastructure developments are to be accelerated based on current savings, operational surpluses and development of port real estate.
Q: Mr. Chairman, how do you evaluate Port Qasim Industrial Estate
Ans: Port Qasim is unique in character by having 12000 acres of land above high water mark for development of industries / commercial complexes. Out of 12000 acres of land 3519 have been reserved for utilities leaving a balance area of 8701 acres for allotment. Almost all area has been allotted to potential entrepreneurs. Currently 117 industrial cum commercial complexes have been established and 96 units are in construction phase. With this pace of development, it is expected that in the next couple of years around 35-40 new industries, ware houses and commercial set-ups shall be established at Port Qasim changing geo-economic profile of areas surrounding the port. Moreover, to enhance production and export of value added textile products, the Government of Pakistan has decided to set up a 'Textile City' over an area of 1250 acres in Eastern Zone of Port Qasim. PQA has already handed over possession of 750 acres to Pakistan Textile city. The Textile City will be first of its kind and provide all infrastructure facilities to boost potential and earn foreign exchange. Establishment of Textile City shall also result emergence of downstream and support industries during construction and operation phases creating immense employment opportunities. It is estimated that with the establishment of Textile City, around 80,000 job opportunities shall be generated providing employment opportunities to masses reducing unemploy ment and poverty alleviation.
Q: How does Port Qasim Authority envisage future challenges to facilitate trade, enhance port efficiencies and reduce cost of doing business.
A: Ports play a vital role in the economic development of country. Ports today are not merely the interface between land and sea but distribution centers for movements of goods within and across the borders. To facilitate the trade, PQA is pursuing a three-pronged strategy i.e.
*expansion in port facilities/infrastructure
*provision of services at minimal cost
*enhance port efficiencies
PQA has embarked on an ambitious development plans to expand port facilities and facilitate trade. Some of them are as follows:
*Deepening and Widening of Navigational Channel
*Liquid Cargo Terminal
*2nd Container Terminal
*Floating LNG Terminal
*Grain & Fertilizer Terminal
*Coal, Cement/Clinker Terminal
*2nd Oil jetty
*Establishment of Desalination Plants
The project 'Deepening & Widening of Navigational Channel' is of vital importance to PQA since on the one hand it will allow berthing of deeper draught vessels and enhance port capabilities and entail economies of scale and on the other hand it will change geo-economic status of the region by changing the status of the port from a regional hub to international main stream port. Further with the completion of these projects port handling capacity will additionally be increased to 44 million tonnes by 2010. PQA is also actively pursuing reduction in dwell time of cargo at the Port which not only increase port efficiencies but increase turn over at the Port.
As a vital linkage in transport logistics, PQA has set a new policy matrix which manifests its approach towards achieving its targets, increase port efficiencies and reduce cost of doing business as emphasized by Prime Minister of Pakistan on various occasions.
*Reduce cost of doing business by improving trade logistics to International Standards
*Focus on cost recovery rather than profit maximization.
*Reduce dwell time to be reduced to facilitate speedy dispatches.
*Enhance Port efficiencies to international standards.
*Procedural improvements through cutting administrative red-tape.
*Accommodate larger ships to benefit from economies of scale resulting major shipping lines calling at the Port.
*Time-efficient and cost effective maintenance dredging
*Promote investments through institutional reforms.
*Make port throughput more time efficient and cost effective.
Q: What is the significance of Port Qasim in the region and what are the prospects of attracting more foreign investment.
PQA lies at the strategic location at the mouth of Gulf of Oman and the trade route of Gulf extending to Far East which has emerged as the most powerful trade region. Port Qasim offer immense scope for transshipment facilities to landlocked Central Asian Republics (CAR). Additionally Port Qasim has been endowed with a vast expanse of 12000 acres of land for developing of port based industrial and commercial enterprises. The Industrial estate of Port Qasim comprises 12000 acres of land divided into three zones namely North Western Zone encompassing over an area of 2700 acres of land, Eastern Zone over an area of 8300 acres of land and South Western Zone having an area of 1000 acres of land. So far 117 units are already operational at the Port while 96 units are in construction phase
Traditionally waterfronts are instrumental in attracting foreign investment. Container terminal and Chemical terminals at Port Qasim are good examples of attracting foreign investments. Port Qasim has also been able to attract Foreign Direct Investment (FDI) in its industrial estate. According to a conservative estimates, PQA has so far been able to attract foreign investment to the tune of US$ 1.5 billion both in port infrastructure and its industrial estate. 2nd Container Terminal, Liquid Cargo Terminal, Development of waterfronts are some of the prominent examples of foreign investments.
Q: What is the contribution of PQA in the national economy and future projects?
Pakistan's GDP growth over last couple of years has been more than 6% per annum. For 2007-08 it has been estimated at more than 7% per annum. For a sustainable growth Ports has to be ahead of GDP targets. During 2006-07 annual growth in cargo handling and shipping at PQA has been more than 13% which helps spur economic growth in the country. PQA is currently operating nearly full capacity utilization. The situation calls for development of new terminals for capacity building and enhance port capabilities in terms of improved parameters.
The development projects of PQA play an important role in providing employment opportunities to masses thus reducing unemployment and poverty alleviation in the country. Investment in the form of development projects not only change geo-economic profile of the area providing job opportunities to thousands and raise their standards of living. Investment also increases productivity in various economic sectors. Only Textile city to be developed at Port Qasim is envisaged to provide 80,000 job opportunities. In the wake of poverty alleviation and upgrading standard of living, new needs have emerged and even traditional needs alter which in turn change social structures as well.
Besides catering for port facilities, PQA is also contributing sizeable share in the revenue receipts of Pakistan. As one of the largest revenue generation source, the Collectorate of Customs collected more than 71 billion rupees during financial year 2005-06 in the form of duties and taxes.
PORT QASIM ON A PROGRESSIVE PATH
Port Qasim is one of the largest contributors to national economy of Pakistan. It has an impressive growth in all facets of port operation. PQA is currently pursuing a large number of projects for capacity enhancement and industrialization attracting Foreign Direct Investment (FDI) and simultaneously undertaking major infrastructure development to enhance efficiency.
Summary of the Development Status, Performance and Framework for Future Growth is given in ensuing paragraphs.
PORT DEVELOPMENT OPERATIONAL COMPLEX
Existing port complex has six terminals with ten berths as under:
*Iron Ore & Coal Berth
*Marginal Wharf comprising four berths
*FOTCO Oil terminal
*QICT Container Terminal having two berths
*EVTL Liquid Chemical Terminal
*PROGAS LPG Terminal
Handling capacity of above nine berths is 31 million tonnes per annum. As per future development plan, number of terminals / berths shall further be increased by nine with additional handling capacity of 50 million tonnes per annum as detailed below:
*2nd Container Terminal
*2nd Iron Ore & Coal Berth
*Grain and Fertilizer Terminal
*Coal & Clinker/Cement Terminal
*Two LNG Floating Terminals
*2nd Oil Terminal
*Liquid Cargo Terminal
With the completion of these terminals by 2010, increase in berths shall be 100% while annual handling capacity shall be increased by 161 %.
PORT DEVELOPMENT INDUSTRIAL COMPLEX
PQA owns a total of 12250 acres of land, out of which 3691 acres have been reserved for operations and utilities leaving a balance area of 8559 acres for allotment. PQA land is divided into three zones namely: North Western Zone, Eastern Zone and South Western Zone. PQA has been pursuing Fast Track Policy for early development of zones. Currently 117 industrial cum commercial complexes have been established and 96 are under construction. PQA is undertaking complete infrastructure development of industrial sector through its own resources costing over Rupees 7 billion.
OPERATIONAL AND FINANCIAL PERFORMANCE
Growth in ship & cargo handling during 1983-2003 has been 10 % and 8 % respectively. However a marked improvement is witnessed in growth pattern during the last three years which is 14% for ship handling and 23% for cargo handling. The revenue generation achieved over the last 5 years has increased from Rs 1.98 billion to Rs 3.35 billion.
Following are the major projects (planned 2006-2010) which will contribute significantly to the national economy :
*Diamond Bar Island City (M/s EMAAR)
*Textile City (M/s PTCL)
*World Trade Centre (M/s Expo City Limited)
*Desalination Plant (Two), M/s California Enviro-Management Inc. USA
*Downstream Steel Units (M/s South Asia Steel Works)
*Oil Refinery (M/s Noor Financial Investment Co., Kuwait)
*Coal Power Project (M/s Metal Investment Holding Corporation)
VISION ACHIEVEMENT UNDER NTC OBJECTIVES
Port Qasim continues to pursue its Vision under the National Trade Corridor (NTC) objectives to be the Port of first choice for customers and stakeholders providing time-efficient and cost-effective Port services and facilitating Industrialization and making tangible contribution to economic development of Pakistan. In this respect following achievements are worth mentioning:
*Deepening of Channel to all weather 14 meter draught and installation of night beacons by 2010
*Capacity increase 161 % by 2010
*'Free Period' reduced from 7 to 5 days
*Pakistan Customs Computerized System being implemented
*Reduced Port charges by 15 % during 2005
*Focus on cost recovery rather than profit maximization
*Reviewing further decrease in tariffs to reduce cost of doing business
*Fast Track and transparent Land Allotment Policy
*Development of Infrastructure (Projects valued Rs. 13.5 billion by 2010)
*Biometrics & photography being adopted (as in DHA)
*Desalination and Power Plants by 2010
CONTRIBUTION TO ECONOMIC DEVELOPMENT
* FDI - US$ 1.5 billion
- US$ 4.5 billion + US$ 43 billion in pipeline
* Rs. 71 billion - Customs Duties & Taxes during 2005-2006