Importers decry ‘high’ terminal handling charges

The collection of handling charges in excess of those approved for the Pakistan International Bulk Terminal (PIBT), which handles imported coal at Port Qasim, has triggered an increase in the production cost of coal-fired power plants and industries, say importers.

According to them, the terminal operator is charging much more than the specified tariff. PIBT is the only terminal which handles imported coal.

In a letter written to the National Electric Power Regulatory Authority (Nepra), Ministry of Maritime Affairs, Ministry of Energy, special assistant to prime minister on petroleum and commerce adviser, the importers demanded that the authorities take immediate notice of the issue.

The letter, written by Lucky Commodities Coal Division Chief Executive Tahir Ahmed, stated that PIBT was taking benefit of its monopoly and was collecting arbitrary coal handling charges, which ran into millions of dollars.

At the time of approval of the port’s tender, the company was allowed to collect a tariff of $5-5.49 per ton but the terminal administration was demanding $6-6.5 per ton in handling charges besides $1.01 per ton in ancillary fee, he said. “An additional Rs131 per ton is being collected on account of trucking fee. Similarly, the facility of free storage has been slashed from 20 days to just five days,” he said. “After reducing the free storage period, the company imposes storage charges on the importers.”

The letter added that in India, coal handling charges were fixed at $2.5-3.5 per ton while free storage period of 45 to 60 days was provided.

The letter pointed out that in its inquiry the Competition Commission of Pakistan had declared the collection of ancillary charges by the company as unfair. The Port Qasim Authority (PQA) has also told the terminal operator to abolish the ancillary charges but the company continued to collect them.

According to Lucky Commodities, the excessive charges are costing $150 million to the power plants. In its comments, PIBT denied the allegation of overcharging, insisting that the terminal fully complied with the law.

“There are only three coal-fired power projects in Pakistan and they handle almost 12 million tons of coal at their own jetties,” said a PIBT spokesman. “They rarely use PIBT’s facilities, hence, the claim that the terminal charged an extra $150 million from power plants is ridiculous.”

The spokesman added that PIBT charged a tariff of $5.49 per ton, which also included royalty payment of $2.27 per ton. “Under the implementation agreement, PIBT is well within its rights to charge for additional or ancillary services that include but are not limited to storage charges, customer service charges, yard facilities’ charges, weighing charges and labour charges,” he said.

Published in The Express Tribune, October 11^th, 2020.

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