Urgent maritime reforms sought

Veteran industrialists call for policy overhaul, reduced port charges

KARACHI:

Veteran industrialists have called on the government to prioritise the development of Pakistan's blue economy by implementing effective measures to control and reduce port charges and by establishing a comprehensive policy framework that emphasises capacity building and good governance at the nation's two main ports. With the maritime sector holding vast potential, these steps are seen as critical to fostering sustainable growth.

The industrialists highlighted that exorbitantly high port charges, along with other factors, are stifling the growth of the blue economy. Addressing these challenges, they stressed, requires a coordinated approach involving both the public and private sectors. This includes developing policies that promote sustainable practices and investing in marine infrastructure. Additionally, they stressed the need for enhancing institutional capacity and raising public awareness about the blue economy to foster innovation and sustainable practices in marine resource management.

"The success of a blue economy is crucial for the country's overall development, yet very little has been done so far," said Muhammad Najib Balagamwala, Chairman of Sea-trade Group of Companies. He pointed out that port charges have skyrocketed due to various factors, including the implementation of the Axle Load Regime (ALR), which has increased truck transport costs by 60%. Additionally, dock laborers now earn monthly wages ranging from Rs200,000 to Rs300,000.

"There is no distinction between the handling of imports and exports, and unions at the ports are wreaking havoc by disrupting vessel loading and unloading operations. These issues are taking a heavy toll on the blue economy," Balagamwala added.

Abdul Rasheed Janmohammed, President of the Bin Qasim Association of Trade and Industry (BQATI) and Chairman of the Pakistan Shippers Council (PSC) at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), highlighted the weak institutional framework as a major obstacle. He noted that the fragmentation of roles and responsibilities among federal, provincial, and local governments has hindered effective policy implementation and investment in maritime infrastructure.

"The main challenge is timely decision-making, which has prevented us from investing adequately in the infrastructure required at ports. There has been no expansion in the construction of new jetties, as we fail to properly forecast our foreign trade needs," Janmohammed said. He also lamented the discontinuation of regular meetings at the Ministry of Planning to develop five-year plans aimed at improving port infrastructure. Previously, these meetings played a key role in addressing infrastructure needs, but this practice is no longer being followed.

Speaking about trade facilitation, Janmohammed recalled that the PSC, in collaboration with the World Bank, initiated the National Trade & Transport Facilitation Committee (NTTFC) in 2001. The NTTFC was instrumental in introducing the Goods Declaration (GD) system, which simplified the payment of customs duties and expedited clearance processes. The committee also worked with foreign consultants and UNCTAD (United Nations Conference on Trade and Development) to update outdated regulations. Former Karachi Chamber of Commerce and Industry (KCCI) President Majyd Aziz noted that Pakistan's share in global blue economy exports is a mere 0.25%, one of the lowest in the world. He called for the urgent revamping and modernisation of the fishery sector through the adoption of the latest technologies, equipment, and processes.

"The country can also promote renewable energy, maritime transport, and tourism under the blue economy," Aziz suggested. He urged the Special Investment Facilitation Council (SIFC) to prioritise the blue economy alongside sectors like agriculture, mining, and information technology.

Aziz also proposed that port charges be divided into local costs—such as salaries, maintenance, and repairs—and foreign outlays, which require foreign exchange. This would save billions in handling costs for exporters, importers, and the government.

He further urged Federal Minister for Maritime Affairs Qaiser Ahmed Shaikh to ensure that the majority of the boards of trustees at Karachi Port Trust (KPT) and Port Qasim Authority (PQA) be nominated by port users, rather than by appointing irrelevant or politically connected individuals. Moreover, he advocated for the appointment of private sector professionals as chairmen of both boards.

Meanwhile, the blue economy, which encompasses all economic activities related to oceans, seas, coasts, and marine resources, remains crucial for Pakistan's economy. Major ports like KPT and PQA handle about 55% and 45% of national cargo, respectively, with approximately 1,700 cargo ships visiting Karachi annually, underscoring the importance of maritime trade.