Minister agrees to waive demurrage charges

FPCCI stresses need for new laws that have been stuck in parliament for 15 years

Our Correspondent May 13, 2021


Federal Minister for Maritime Affairs Ali Haider Zaidi has agreed that the demurrage/detention charges incurred during the extended Eid holidays or a lockdown will be waived.

During a meeting with the minister, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Nasser Hyatt Maggo highlighted that shipping companies only allowed limited days of free storage from the date of arrival of cargo, due to banks being closed, because of which documents were not cleared within the stipulated time period, which exposed the cargo to hefty demurrage/ detention charges.

The FPCCI chief added that the Carriage of Goods by Sea Act and the Bill of Lading Act had been languishing in parliament for over 15 years, and the government must make sure that these Acts were passed without further delay.

“Resultantly, various charges, including shipping company charges, can be streamlined once and for all,” he emphasised.

Maggo stated that at present the sector was being governed by a law which was hundreds of years old, whereby steamships and containers were still referred to as sailing ships and crates.

He praised the maritime affairs ministry for formulating new shipping policies related to transshipment and deep-sea fishing, which once promulgated would make Pakistan an attractive transshipment market, aid in export of value-added seafood and bring foreign exchange to the country.

READ FPCCI official calls for exploring new markets

The FPCCI president also highlighted the non-inclusion of an FPCCI nominee in the Karachi Port Trust (KPT) board. Responding to that, the minister assured Maggo that a nominee of the apex representative business, industry and trade body of Pakistan would be inducted into the KPT board. Speaking on the occasion, Pakistan Foreign Investors Forum Founder President Khurram Tariq Sayeed raised the issue of high energy cost and drew the attention of the minister, who was also a member of the Cabinet Committee on Energy (CCOE).

He pointed out that on the one hand the federal government was not letting wind and solar projects of 617 megawatts, which were awarded the lowest tariff of an average of 3.64 US cents per kilowatt-hour (kWh) (Rs5.9/kWh), move forward.

However, on the other hand, it was signing a new project of 1,263MW on imported RLNG, which would produce much expensive energy in the range of 6 to 11 US cents per kWh (Rs9.7/kWh to Rs17.8/kWh) and would also add to the already rising circular debt and import bill, he said.

The federal minister assured the businessmen delegation that he would take up the matter with the relevant authorities.

Earlier in March, the cabinet had formed a committee to rationalise port charges in order to reduce the cost of doing business and increase the country’s competitiveness in regional and international trade through a better price and quality services.

The cost of doing business has gone up following an increase in power tariff. Now, the government has started the process of cutting port charges to bring down the cost of imports and exports and to increase its footprints in regional and international trade via sea.

The decision on waiving demurrage/detention charges was in line with the government’s objective to ensure ease of doing business.

Published in The Express Tribune, May 13th, 2021.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations