Reopening Nato supply: Govt justifies $5,000 fee for shipping containers
As Pakistan and the United States make some headway in bilateral talks, Islamabad’s demand for $5,000 per container for transporting goods to Afghanistan through its territory remains the biggest stumbling block.
US Defence Secretary Leon Panetta has ruled out paying Pakistan this amount, but officials familiar with the talks say Islamabad’s demand is “neither irrational nor out of the blue.”
The supplies made to Isaf and Nato forces stationed in Afghanistan have ruined Pakistan’s road infrastructure over the last nine years of cooperation, they added.
The infrastructure was used for eight years without paying any charges. In the ninth year, the US started paying a nominal handling fee of $220 per container to National Logistic Cell – the army’s logistics arm, officials said. Terming Pakistan’s demand as “extortion,” Senator John McCain, a former Republican presidential aspirant, had claimed that the US was paying $250 per container to Pakistan.
Why $5,000?
Roads in Pakistan are designed to have a life of ten years but have depreciated significantly since the damage caused by a single container is equivalent to 1,500 to 2,000 cars.
Officials said the National Highway Authority needs $1.6 billion to rebuild the damaged infrastructure and, for this purpose alone, it has proposed a charge of $1,000 per container.
The additional $4,000 includes charges for scanning, inspection and examination of the supplies, charges on account of road safety, environmental impact and port services, they added.
For the last eight-and-a-half years, Pakistan allowed Nato and Isaf containers to leave the ports without scanning them. The Federal Board of Revenue, however, claims it had started scanning the containers but refused to speak on record. Officials said Pakistan will not provide security to the containers.
Comparing with NDN
Even after paying $5,000 per container to Pakistan, the cost of shipping supplies through Pakistani territory will be less than that incurred using the Northern Distribution Network (NDN) – and will take less time.
Each container coming through the NDN to Afghanistan costs $14,000. About 40 to 45% of the NDN comprises sea routes, while the rest is covered through rail and road networks.
The Pakistani route, on the contrary, costs $7,000, since 80 to 85% of the distance is via sea while the rest is through road, officials said.
However, officials say, the US insists the $5,000 per container fee to Pakistan will surge the cost of the route and make it comparable to the NDN. The US has threatened Pakistan that sticking to the demand may put its ties with Nato countries at risk, officials added.
CSF payments
During the recently-concluded technical-level talks, both sides have resolved certain outstanding issues vis-à-vis reimbursements under the Coalition Support Fund (CSF). Both sides, however, were reluctant to share details due to the ‘hostile’ US Congress. Officials said the US was ready to pay CSF payments for the period between May and November 2011.
Published in The Express Tribune, May 27th, 2012.
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Northern route is longer than the pakistani route and so if they start paying the corresponding amount as demanded by Pakistan to northern route also -it will be very high price for US to pay..
@Ansari Mullah policy of confrontation with America has resulted in complete disaster in Afghanistan and Pakistan....and has led to isolation in their own region.
I remember those days when LIBERAL EXTREMISTS used to shout at the top of their lungs that Pakistan had no choice but to submit to USA, as US have all other routes available for transportation if Pakistan refuses. Now, see, what's the reality. Liberal extremists, with all the support of media, had a lot of propaganda to support coalitition of Pakistan with US on shallow basis, this is yet another example of their intellectual bankruptcy.
@Abdul Jabbar: Ok mr intelligent, tell me who killed all the talibans that waged holy war on palistan?
You have obviously no clue as to what has happened in the country. If pakistan keeps it this way then it will find itself out of the end game andhence more likely to suffer of the aftermath consequences like civil war in Afghanistan... Which will bring chaos to PAK.
I think $5000 is a reasonable price and keeps every one happy. Politicians will make about $1000.Khakis will get $3000 as usual because as per custom khakis get the highest percentage of revenue coming from any source to the national treasure chest! $500 for the transporters, $ 300 for the bribes to the various officials on the route from karachi to the afghanistan border and $200 for the infrastructure repair. Out of $200 infrastructure repair, $ 100 will be used as bribes and padding the expense by the contractors, the rest $100 will be actually used for infrastructure repair! US/NATO will get supply for the troops at cheaper rates than it pays for using the NDN routes. See? Win WIn for all! Except, as it is customary fo foreign received aid/revenues , nothing for the awam!
@Babloo: Babloo, my dear friend I have to put your figures right. According to the Data compiled by Wren Elhai of the Center Of Global Development, Washington and also maintained by the British news paper The Guardian, Pakistan from 1948 to 2010 has received a total of $ 61.7 billion ( $40.4 billion for economic development and $ 21.3 in military assistance. Major portion of Aid was received during Afghan Jehad from 1982 to 1991 ( $ 20.5 billion) and after 9/11 from 2002 to 2010 ($ 19 billion ) both times when we had fought for the US in Afghanistan. Otherwise from1971 to 1979 and from 1991 to 2001 we had not received any aid from US. A sizable portion of this aid was the reimbursement of actual expenditures incurred by Pakistan on the employment of troops in support of US military operations. Another sizable portion of the aid has gone back to in the form pay of their trainers, consultancy fees, auditors fee and travel and hotel expenditures of US aid officials. During 2010 the US had paid 1.8 billion which comes to about $ 10 per person per year. Do you think Pakistan is surviving on these $ 10 per person per year given to us by US. On the other hand during the last 10 years on account of US war on terror, Pakistan's economy has suffered a loss of over $ 70 billions, quantitatively much more than what the US had given to us in 64 years. As a matter of fact it will be good for our sovereignty, national pride and also for our economy if we refuse to receive the US aid. Today our main source of foreign exchange is our expatriates who are remitting over $ 1 billion per month to their home land. My request to all my brothers will be to please help the country by getting rid of US aid. We can easily meet this negligible shortfall by forcing our Govt. to exercise strict economy, by checking corruption and by paying our taxes honestly.
Negotiation Skills 101 : "The guy who quotes a price FIRST always loses."
The US called Pakistan's bluff. Pakistan tried to push the price up too high and is now stuck because it doesn't want to back down. The US supply network from the North may cost more than $5,000 per container but the US realizes that the true cost of going through Pakistan is much higher.
The US knows the $5,000 per container spent in Pakistan will end up in the hands of corrupt politicians and likely somehow end up back in the hands of the very terrorists Afghanistan and NATO forces are fighting. Pakistan does have a lovely history of backstabbing just about everyone (including its dear friend China who isn't too happy about Islamic terrorists on its soil trained in Pakistan).
Pakistan's bid for USD 5000 per container is just another way of saying "No" to NATO without saying any negatives. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Interesting thing is to see what Nato's response will be. Could cost Pakistan a lot!
Reading all these comments on this international forum. Best thing for pakistan is to lease Northern area to China for 100 years. nothing wrong with this China did this with Hong Kong leased to Britain for 100 years. let them make roads and take care of India. Once India is off your back you do not need 5Th largest army in the world. New packet with Kabul. abolish old Durand line, They are our brothers give them FATA free and erect boarder wall no more TTP ,kidnapping and car Jacking. About Baluchistan any war lord does not want to stay in Pakistan ,lease that area to Iran if they do not want to pay, give them free. they are also our Brothers. Now we will have money to provide infrastructure for Pakistan, toll free roads,electricity 24 hrs. Clean drinking water for every one, Turn Pakistan into Haven on earth. I almost forgot suba for Karachi Wallas. British India was divided for area where majority is Muslim will be Pakistan. There was no migration clause for economic purposes. But some how you have come here. you have to become local intermarriages and adopt local language. no problem you are also our brothers. Please do not take advantage of big hart. let us live in happy and prosper Pakistan..
Unless the roads are never used whatsoever except for the trucks, there's no way the full cost being charged will fly. Part. maybe. All? No. Not to mention all roads eventually come to need repairs. It's not all caused by the supply trucks. Attacks also damage them which is Pakistan's responsibility to prevent if no permission has been given, or offered, to NATO to be able to fill that role. If the offer was made and rejected, that would justify that expense. But, it wasn't. There's one thing they also keep forgetting in terms of cost. There were other things being given due to that route being open as well. Indirect compensation is still compensation. In fact, seeing the current stances and responses to the clash, much of the unrelated assistance was due to Pakistan actually helping with that route. If they didn't choose for it to go towards the roads, that's their own fault. Pakistan has not done anything out of the kindness of their own heart. There was some trade off occurring regardless of the public not being made aware of it. That's not to say cost can't be raised some. But, $5000 will end in failure. It seems Pakistan doesn't know how negotiations work. Even if it can be afforded it won't be accepted on principle. Nobody in their right mind wouldn't recognize the extortion attempt. If it's not hidden, the other side is quite likely to only respond in a way that points out that they aren't stupid. Though, I suppose with all things considered, $5000 might be technically ok. If the other assistance isn't recognized in the equation, they can easily just cut those things off and just pay the new fees as they are.
@Raja: They want to check&scan containers plus all duties, taxes, once the goods unloaded from the shipyard till cross the borders of Pakistan they are demanding, even Pakis few arm forces are engaged helping NATO forces, it seems Pakis are not representing their correct demands like their soldiers lost their lives they do not get compensation from NATO as well as from USA, if analyze properly one could say that Pakis demands are reasonable, here using roads is not a single issue.
@Cautious: and Dear who told you national and international rates conside with each other!!!! smallest example just try applying for a foreign university and you would know better !!!! the tertiary sector is where the services are and Americans Rape you when they provide you any services .... this is the very reasons the whole world has shifted towards china because they provide consultancy services at quite rational rates... and u still defend those americans who should be paying for what they do
@Cautious: hahahha its rather Pakistanis Have found their unfound love for America or Its American Hackers creating dummy accounts to post here :P sounds so funny doesnt look like Pakistanis commenting here !!!
@Babloo: hahhahahah Oh did u see that in Avenger or Spirder man!!! oh sorry u might have peaked through the next transformer!!! America giving Pakistan AId without any leverage !!!!
I feel Pak. is playing its cards nicely so far.
Now Afghanistan also charge $5000 for every Pakistani truck plying on their roads. India and Bangladesh also charge the same rates for all Pakistan trucks if they transport goods to Burma via these countries. Flood season is fast approaching, Pakistan will not get a single dollar for relief works. Pakistan government should not yield to the shouting mobs on the streets while formulating foreign policies.
They should pay at least what they are paying through the land route in Russia and Central Asian States. A fair rate should be charged and NATO should pay to redo all the roads and infrastructure that has been damaged- otherwise they will continue to pay 5 times more for land routes through central asia and Russia. Pakistan needs to be an ally on fair terms but the ISAF forces need to be fair.
In 2008 15% of NATO freight going through Pakistan was either stolen or destroyed. Expect that has only gotten worse since then. There is not the same problem with the Northern Route.
Charge all trucks the same rate based on weight delivered per tire - a typical solution for most countries. Also, the US/NATO negotiators are requiring with these fees that the cargo be protected from looting and attack. Seems a very reasonable request at the fees being considered. Pakistan is declining to provide this guarantee. Of the $5000 per truck only $1000 is actually headed to road maintenance. Doesn't this strike anyone else as odd? If the issue is road damage, then by the fee breakdown, the cost per truck should be only $1000. The description of how the other $4000 will be used is very suspect .One final thought, being this is Pakistan, how much of that $1000 (let alone the $5000) will actually go to road construction/maintenance?
This is right we used to take $250 dollars. the minium rate for these containers shipment is $1000. this is damaging our roads and highways i think we should take $5000 and use this money to improve our roads.
TAX THE CONTAINERS AND WE CAN MAKE MANY MANY MILLION DOLLARS BY TAXING THEM !
It's a truck and just because it's carrying cargo for NATO doesn't mean it does anymore damage than any other truck - so the real question is what do you charge your other trucks to drive the roads of Pakistan? I suspect the Pakistani truckers don't pay anything near as high as $220 per container and it that assumption is correct then you should be refunding money to the USA rather than trying to rationalize your extortion.
@ Abdul Jabbar.. well said. Take it or leave it, these are Pakistan's charges. If a half liter water bottle in USA can cost one dollar, why can't Pakistan charge US$ 5000.00 per container ? If a doctor in USA can charge a patient US$ 200.00 consultation fee, why can't Pakistan charge them accordingly. Let the costs be calculated by keeping the American services cost as bench mark. Do American engineers charge Pakistani salary when they come and work in Pakistan?
PAY TAX n Duties on your Goods...and get a way,,,Still say thanks to Pakistan that Pakistan is not asking for last 9 years TAX n Duties.
When this route was given at $250 per container and used for a decade or more, was it done due to our love of the Americans and where has the difference of $4,750 gone.
Do you want US to add up all the aid money, military supplies, pardoned loans that it has given Pakistan since 1947 and add them up ? It would be more than 100 billion dollars. You can deduct the container fee from it and return the rest to USA ?
@Mahakaalchakra: Your pack of lies and cooked up stories have no value. Pakistan had provided the supply route to US for over ten years almost for free. That was Pakistan's decision and now we will charge $5000 per container, once again this is our decision.
@Nikarish: What has that got to do with NAto supply. Stop being an advocate for ur American masters
@Ismail Khan: Yes, it is.....so....its our roads, our lands and our infrastructure; we will charge what we want.
@Mahakaalchakra: Would you care to share some evidence? Otherwise typical Indian web b/s!!
The real culprit is the commando who extended 'unstinted support' to the US war on terror. He was so terrified at the time that he demanded very little remuneration for such help and support. He hid the servile support under the term 'logistic support!' So one is not surprised if the Americans call a proper payment 'extortion.' They are even aware of the term bhatta because our leaders and some political parties have become experts at this game!
Beggars have no choice....
One can justify and demand whatever they want but the buyer desired to pay or not. It is not going to happen especially considering the fact that Pakistan needs the money for its National Budget since the payments are already included as receipts and has been spent.
"Govt justifies $5,000 fee for shipping containers" +++++++++++++++++++++++++++++++++++++++ It seems that the "Govt" is very shy when making this justification.
The FM who referred to the Chicago visit as "very very" successful has suddenly gone quiet and left it to unanmed " officials" to make this justification.
The PM and the Defence Minister are like wise silent.
I think the statement would have had desired impact if the Interior Minister Mr Malik would have made it. In any case he handles most Foreign Affairs any way.
@Mahakaalchakra: Chinese Paki friendship is higher than the himalayas and deeper than the oceans....but the US-Paki friendship is the reverse: deeper than the himalayas and higher than the oceans.
Therefore rates are different.
@Feroz: "lets find out how horrible a neighbor India is." ++++++++++++++++++++++++++++++++++++++++++++
Oh so you still have doubts about how horrible a neighbor india is?
Government had laid down the nation so much in front these super powers by taking loans and support to run non-administrative government that even can't resist and can raise voice to the world by totally banned the route......as the major beneficial are these politicians getting for current and future support to run government...what about soldiers who got martyr in that attack and what about their families
In which world are you living. Where in the part of world moving one container from one place to another another costs 1000$
@Freedom Seeker: National interest when your goons are attacking innocent civilians in pakistani metropolitian cities.
O you rich people of U.S Pay 5,000$ per container otherwise u can use alternative route Thank you Very Much..!! :)
Pakistanis should stick to their demands which are fair enough. We don't need any aid better to charge them each and every thing as per market price. We shouldn't take any pressure or bullying and fear. National interest is higher to any other stake.
I suppose that Nato were paying Pakistani truck owners earlier and the truck owners were paying road tax or whatever? It is not as if NATO trucks were plying free. Road maintenance is done out of such taxes all over the world if the GoP wants 'import duties' for the containers, that is at least understandable, but if the excuse is road maintenance, that is clearly irrational.
Extortion will not be forgotten.
Whether Pakistan charge the same amount if local transporters use this route for private material. Nowhere in the world, such charges are levied. This is nothing but blackmailing since other route is more expensive to the NATO goods.
Boarders must cut out all the frivolous drivel and look at examples. How much are landlocked countries paying their coastal neighbors for allowing them to transport their containers using their road network. These details not emotion will tell us whether the demands are genuine or extortionist. At today's freight rates shipping one container from one corner of the globe to the other should not cost more than $ 1000. To move it inland definitely cannot be a multiple of that. Any idea how much India charges Nepal for allowing their container to transit - lets find out how horrible a neighbor India is.
Pakistan's demand is fairly reasonable. If US/NATO paying $14,000 on NDN and they are reluctant to pay $5,000 to Pakistan. Actually, US/ NATO takes Pakistan for granted.
is it all about money?? what about our soldiers??
Chinese transport and ship ore with copper, Gold and many kind of highly valuable rare earths (not disclosed to Pakistanis), in bulk from Pakistan to China via sea ports.
Any idea how much fee per container/truck is charged to China, the all-feather friends who is sucking all rare minerals and ores from every possible corner of the world. Rather than extracting copper or gold right here in Pakistan, China takes away the ore to China to extract hidden rare earths and metals such as platinum that are much more costly than gold almost at lowest possible cost.