REVITALIZING SHIPPING SECTOR
PNSC IS ADDING NEW SHIPS BUT WITHOUT ACTIVE PARTICIPATION OF THE PRIVATE SECTOR, THE COUNTRY WILL REMAIN DEPENDENT ON FOREIGN LINES.
SHABBIR H. KAZMI
Mar 7 - 13, 2011
There is no denying the fact that despite addition of new ships by the national carrier the country remains heavily dependent on foreign lines. The government has chalked out an elaborate plan to revamp Pakistan's port and shipping but availability of funds remains the key constraint. It is understood that unless private sector is involved in a big way the country will remain dependent of the national carrier.
The recent initiative taken by the national carrier Pakistan National Shipping Corporation (PNSC) must be appreciated. PNSC is expanding its fleet at a time when many lines are shrinking.
The size of a fleet is determined by its tonnage and not by the number of vessels it has. In the past, PNSC had 14 vessels but these averaged about 250,000 dwt (deadweight tonnage). According to the latest annual report as on June 30, 2011 PNSC had 10 vessels with aggregate tonnage of 633,273 dwt.
During 2009-10, PNSC and its vessel-owning subsidiary companies together performed a total of 538 voyages (inclusive of foreign chartered vessels and slot chartered vessels) and lifted 7.921 million freight tons of cargo as compared to 637 voyages and 8.684 million freight tons cargo during the previous year. A comparison of handling of cargo presents a disappointing picture because the quantum of cargo is on constant decline.
PNSC had carried 9.451 million tons in 2007-08, which declined to 8.684 million tons in 2008-09 and further reduced to 7.921 million tons in 2009-10. Handling of liquid cargo remains the key business. PNSC handled 7.227 million tons liquid cargo in 2009-10 as against 7.665 million tons in 2008-09.
PSNC is in the process of replacing its old vantage vessels with under ten years old secondhand Japanese vessels in Phase-I and then shall embark upon ordering new build/buying resale vessels in Phase-II for its development/expansion program. The five-year plan envisages induction of two to three modern bulk carriers preferably by March 2011. Induction of a Product Tanker and an LNG carrier was also part of the fleet development plan, which would serve the energy sector of the country. Inductions of bulk carriers, product tanker, and an LNG carrier would provide PNSC with diversified business opportunities and enhance shipping tonnage to the targeted one million tons. This would place Pakistan and PNSC in a prestigious position within shipping circles of the world at large and a lead contributor in the development of national economy, the statement said.
The finance ministry has also appreciated recommendations forwarded by the federal ministry of ports and shipping for considering PNSC as the official shipping company for all public sector organizations. While talking about future role of PNSC in rapidly expanding international trade, it is heartening to note that the corporations in the first phase of expanding its fleet plan to invest over U$270 million to include eight new ships. PNSC is making rapid progress despite international recession. However, it remains to be seen that keeping its efficiency, expertise, and experience in mind how the foreign investors respond to its interest in forming joint ventures and seeking direct investment in the corporation.
United Arab Shipping Company has expressed interest in joint ventures in transporting goods to Gulf States. Kuwait Petroleum, which supplies oil to Pakistan State Oil (PSO), has also expressed interest in joint ventures. At present, PNSC carries oil to India, Bangladesh, Sri Lanka, and African countries.
A long-term agreement is expected with Bangladesh while Shell has already secured PNSC services for Singapore. It is necessary to mention about one of the latest inductions in PNSC fleet. MV Malakand was taken over physically at outer anchorage of the Port of Dalian China on December 27, 2010. It has 76,830 metric tons deadweight with a gross tonnage of 40,040 having length 225 meters and breadth 32.20 meters. This Panamax bulk carrier was built in 2004 by Sasebo Heavy Industries of Japan.
Acquisition of the ships is part of PNSC's fleet revamping/expansion plan, whereas a sum of approximately Rs70 million was paid through commercial loan which PNSC contracted with a consortium of commercial banks without government guarantee. The planned acquisition of ships in the five-year (2010 ñ2015) is based on modern and competitive tonnage with a view to serve Pakistan's seaborne trade as well as providing competitive shipping services for the world trade.
The five-year plan caters for induction of 2-3 modern handy size/supramax bulk carriers, preferably during 2011. Induction of a Product Tanker and an LNG carrier is also part of the fleet development plan, which will serve the energy sector of the country.
Keeping in view the fact that PNSC is still not fully ready to handle Pakistan's international trade, active involvement of the private sector is a must. However, without offering incentives convincing the private sector to play any role is hoping against hopes. Pakistan should benefit from Bangladesh experience. Since independence, it has completely turned around its shipping.
Since more than 95 per cent of the total trade of Pakistan is seaborne, the Ministry of Ports and Shipping must focus on modernization and corporatization of ports and shipping with a view to introducing landlord concept in ports, rationalizing ports tariffs in order to be competitive in the region, introducing modern technology and data base in line with the present day trends, reviving ship-owning in the private sector by removing the impediments, and enhancing tonnage and profitability of PNSC.