Pakistan's exports have done well in the last four years and are of course capable of significant further growth. However, recent developments on the subject matter has not only caused serious concerns in the port and shipping sector and the trade but will create impediments in achieving the export targets.
The port and shipping sector is the engine of growth of the exports and national economic revival and therefore cost effectiveness and efficiency are crucial.
The unreasonable insistence by the NLC and Pakistan containers to screen all export cargo containers by installing scanners at the two ports and container terminals implies that this will be a commercial venture for NLC to the detriment and cost of the export trade and thereby causing freight levels to rise. NLC propose to arbitrarily recover US $4/- per TEU from the export trade for the compulsory usage of the subject scanners.
The projected accruable profit in the first year is expected to be US $4 million based on the container throughput of about 1 million TEU per annum of both Karachi Port and Port Qasim.
With 11% annual growth of container volumes there will be an increase of US $0.4 million annually in the profits earned by NLC through the subject commercial venture. Needless to mention that any charge in this regard collected from lines/carriers would be reflected in the export freight rates.
The 15% CED on shipping commission of export shipments (announced in the budget of June 2004) has already hit the export freight rates, in addition to 15% CED already applicable on stevedoring services causing negative incidence on export freight level.
In order to decide the subject matter it is imperative that the following pertinent areas of concern be evaluated by all the stakeholders.
a. The scanning of containers is not a WTO regime requirement nor ISPS code obligation.
b. The Government of Pakistan is acquiring subject equipment through its resources/grants then there is no rationale for any governmental department to burden the trade and citizens for its cost price.
c. It is incomprehensible that why should a subject charge be recovered from the users when likewise no such charges are payable by the passengers and cargo at airports whilst being scanned and screened. Indiscrimination and level playing field for equal opportunities are the rights of all citizens and parties.
d. The usage time of subject scanning of container traffic will require a minimum of 15 to 20 minutes per container. The present volume of export traffic passing into the ports on a daily basis during work hours will require extremely large inventory of subject equipment per entry points/per terminal/per wharf/per port for clearance/standby purposes.
e. All such international sea ports in the region and overseas have not felt the need for the subject matter logically because they conduct complete physical customs examination as in vogue in Pakistan. Secondly the subject equipment is unable to scan/detect high risk maritime cargoes such as weapons of mass destruction (WMD) and explosives.
It is proposed that a meeting of all the port users/trade/regulatory authorities/service providers be convened by the federal government in order to enable all concerned to engage in the resolution of the fast developing controversy between the exporters and the Authorities.
(The writer is Founder Chairman, Pakistan Shipping Association)
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