By rationalising port charges and developing infrastructure, Karachi Port can become a transshipment hub - a port that connects two destinations that otherwise could not be connected directly - for Central Asian countries.
“During Covid-19, activity at our ports slowed down that has given us a chance to reconsider the long-held programme about making Karachi Port a transshipment hub,” said United Business Group (UBG) Standing Committee on Maritime Affairs, Communications and Gwadar Development Chairman Tariq Haleem while talking to The Express Tribune.
“There are 12 Central Asian Republicans (CARs) that in total have imports and exports worth $450 billion and they do not have a port - a huge opportunity for Pakistan,” he stressed.
Pakistan’s imports and exports totalled around $70 billion and its cargo volume stood at 3.3 million containers per year, Haleem added.
Although imports and exports by the Central Asian countries were worth around $450 billion, their containers were low in number at around 25 million due to the nature of goods.
The committee chairman stated, “We can divide them into five blocks of $50 billion each. And if we capture only one block of $5 billion, our ports will choke.”
“The capacity of our current ports needs to be enhanced, and it is a doable plan that can turn around the country’s economic situation,” he stressed.
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Haleem said that high demurrage charges as well as other charges such as cargo handling costs - for example stuffing or de-stuffing of a container costs around Rs12,000 at Karachi Port whereas the same operation costs around Rs6,000 outside of the port - had made ports of Pakistan (Karachi Port and Port Qasim) the most expensive in the region.
Rationalisation of port charges such as cargo handling in free days and proper utilisation of South Asia Pacific Terminal (SAPTL) at Karachi Port, which has a deep draft of 16 metres alongside the berth with option up to 20 metres, could be used most beneficially for making the port a state-of-the-art transshipment hub, he said.
With proper planning and execution, Karachi Port can also become the most convenient and cost-effective port for connecting and expanding trade volumes with the Commonwealth of Independent States (CIS) countries.
“The idea of transshipment has been proposed for a long time; this will help attract mother vessels to Pakistan,” he said.
Published in The Express Tribune, July 13th, 2021.
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