Experts urge reforms in ports and shipping policies

Highlight steep increases in costs that have severely impacted country's blue economy

KARACHI:

Experts in Pakistan's blue economy believe that revitalising the maritime sector and adopting business-friendly policies could be a game-changer for the nation's economy. With 70% of global trade managed by ships, Pakistan's three major ports have the potential to transform the country's economic fate—provided that mismanagement, poor governance, and high port dues are addressed.

Muhammad Najib Balagamwala, Chairman of Seatrade Group of Companies, highlighted how irrational and steep increases in port and shipping costs have severely impacted the country's blue economy, affecting industries across the board, from the shipping sector to importers and exporters. These rising costs are contributing to higher expenses for all business sectors, yet complaints from business leaders and their respective chambers and associations often go ignored.

Balagamwala expressed surprise that port and shipping ministers have not intervened to stop these surges, nor have they played any role in addressing the issue. "On July 1, 2023, the Karachi Port Trust (KPT) increased port dues by 41%, which means a ship loading clinker for export now pays between Rs15 million and Rs30 million per voyage," he explained. Port dues include various charges for a ship's stay at the port, such as berthage, pilotage, and docking fees. He added that freight rates from Dubai and Saudi Arabia to Bangladesh are now cheaper than from Pakistan, causing the country to lose export business.

He also criticised both the Karachi Port Trust (KPT) and Port Qasim Authority (PQA) for overstaffing. "No minister or top management has addressed the massive increase in hiring. The port staff should be reduced to curb unnecessary expenses," he 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), emphasised the untapped potential of the blue economy in Pakistan. He explained that the blue economy encompasses all economic activities related to oceans, seas, coasts, and marine resources, from fisheries and aquaculture to marine biotechnology, renewable energy, and maritime transport. The core idea is to harness the ocean's potential sustainably to drive economic growth, improve livelihoods, and maintain healthy ocean ecosystems.

Janmohammed pointed out that Pakistan, with its strategic location along the Arabian Sea, is well-positioned to capitalise on its maritime resources. The country's coastline stretches over 1,050kms, offering an abundance of marine resources and strategic maritime routes. He stressed that the blue economy is vital to Pakistan's trade, with 95% of its trade volume transported via sea routes.

Key components of the blue economy in Pakistan include fisheries, tourism, and marine renewable energy:

1. Fisheries and Aquaculture: Fisheries are crucial to food security and the livelihoods of coastal communities. However, the sector remains underutilised. Sustainable fisheries and aquaculture practices hold significant growth potential.

2. Coastal Tourism: Pakistan's scenic coastlines and rich biodiversity present opportunities for coastal tourism development. Sustainable tourism can boost local economies while preserving marine ecosystems.

3. Marine Renewable Energy: Emerging technologies in marine renewable energy, such as wind and tidal energy, offer sustainable solutions to Pakistan's energy needs, reducing reliance on fossil fuels.

Janmohammed also stressed the importance of maritime transport and shipping, which are crucial for Pakistan's economy. Major ports like KPT and PQA are vital trade hubs. Port Qasim, in particular, has pioneered industrial port development in Pakistan by introducing Build-Operate-Transfer (BOT) projects and adopting the landlord port model. This approach has stimulated significant maritime activities, with dedicated terminals for handling grains, liquefied natural gas (LNG), containers, edible oil, chemicals, and coal.

Additionally, the development of the Gwadar Port Authority (GPA) under the China-Pakistan Economic Corridor (CPEC) aims to enhance Pakistan's role in regional trade, providing access to Central Asia and beyond.

Currently, KPT and PQA handle 55% and 45% of the national cargo, respectively, with approximately 1,700 cargo ships visiting Karachi annually. These statistics underscore the importance of maritime trade for Pakistan's economic future.