ISLAMABAD: Local coal importers have appreciated the decision of the Cabinet Committee on Transportation and Logistics (CCoTL) regarding reduction in wet and dry port charges by 50 per cent.
According to coal importers, current coal vessel line-up indicates that reliance on the only exclusive terminal with just one berth for imported coal handling is insufficient to meet the current coal demand for industries.
According to an estimate, coal importers have paid $150 million as demurrage in the last six months due to the inefficiency and limited capacity to handle imported coal by the Pakistan International Bulk Terminal (PIBTL).
According to a series of letters sent by the All Pakistan Cement Manufacturers Association (APCMA) o the Ministry of Maritime Affairs and the Ministry of Industries and Production, the price of coal and vessel hire charter rates are already high in the global market and due to the current coal handling situation cement makers’ and coal importers have to pay an unjustified amount in dollars, which is not only affecting their business but also putting pressure on the national reservoir.
Currently, the single berth of only coal handling terminal with its limited capacity is unable to timely manage the discharge of coal vessels, which is not only causing congestion and delay of up to 15 days, ut also unjustifiably increasing the cost of doing business for industries as they have to pay hundreds of thousands of dollars as demurrage.
On average coal importers are paying $35,000 to $40,000 per vessel per day as ship demurrage and around eight to 10 coal vessels line up can be observed in waiting at the port for discharge.
The letters also suggested that through the availability of multiple berths, for coal handling and by ensuring accessibility at the KPT for coal handling (subject to the cabinet’s approval) after taking required environmental precautions and fulfilling regulations, the current imported coal handling mechanism can be enhanced.
Importers are of the view that by doing so industries can operate with minimal operational expense effectively to continue contributing to the current economic uplift.
The manufacturing industry of Pakistan has contributed enormously in strengthening the national exchequer of Pakistan through exports.
In this regard, the cement sector has been at the forefront not only through record exports this year but also through contributions in key construction activities mainly the Naya Pakistan Housing Scheme (NPHS) and vital government initiatives including hydropower projects, and Special Economic Zones for the CPEC.
Considering this scenario, the demand for cement has increased manifold, for which cement manufacturers are not only operating at optimal capacity but also expanding to facilitate the government for development projects and generation of foreign exchange through exports.
Copyright Business Recorder, 2021
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