Revival of Karachi Shipyard

In the wake of Karachi Shipyard and Engineering Works Ltd (KSEW) facing financial crisis, it is heartening to know, in a way, that a Malaysian company was interested in buying the facilities (Business Recorder, 1st October). It is only less than a year ago that the company was taken off the privatisation list in view of its national strategic importance.
It will be most unfortunate and certainly not in the greater national interest to sell off the KSEW. The world over heavy engineering industry is termed as engine for growth due to its dominating role in achieving rapid industrialisation and indigenisation, thus fulfilling the national objectives of self-reliance and employment.
Despite present recession in the shipbuilding industry, there is great potential for KSEW for securing reasonable orders from friendly countries. Though it has already made a breakthrough in the export market in the recent past, having supplied vessels to China, the company failed to get more business in subsequent years due to poor marketing. For example, in 1998, Syrian Navigation Company, an enterprise of the Ministry of Transport, Government of Syria, was willing to negotiate a contract with Karachi Shipyard for supply of two multipurpose cargo ships, each of 6,000-tdw capacity. The client considered KSEW's bid, in response to international tender, technically acceptable.
Subsequently, the Syrian government had offered to Pakistan, at the ministerial level, to place order on the company if it matched the price quoted by other competitors from Germany and China. Unfortunately, the KSEW could not respond timely, in spite of top government level support, and as a result not only it lost a contract worth D 28 million, but also the opportunity to develop bilateral co-operation with Syria in the sector. At that time, Al-Sham Shipping Company of Syria, in the private sector, also had requirement of two similar vessels.
Shipbuilding products can be effectively promoted domestically. The wide range of products cover, besides military or defence equipment, the commercial and industrial shipbuilding that includes dry cargo vessels, tankers and gas carriers, passenger/vehicle ferries, cruise ships, support vehicles like tug boats, coastal patrol boats/vessels, floating off-shore facilities and others.
Product diversification can be another solution. Basically a heavy engineering unit, KSEW has the flexibility of manufacturing various other engineering goods. In fact KSEW was the pioneering organisation to undertake indigenous production of industrial boilers, overhead cranes, machinery for sugar mill and cement plant, and it has excellent references for these products too in Pakistan. There is a need to revive its role to facilitate industrialisation in the country, and to adopt its product mix corresponding to the present demand, such as equipment for oil and petroleum industry, including oil well drilling rigs and platform.
To make Karachi Shipyard a viable and profitable organisation the government has to carry out a professional analysis of the factors responsible for the present dismal situation and the issues has then be addressed properly, devising solutions, with a view to ensure efficient use of existing facilities.
There is thus a need to draw an action plan to revitalise and restructure the organisation, introducing cost-effective systems, instead of considering outright sale.
The possibilities, however, could be explored, meanwhile, to establish joint venture with Malaysia and other friendly countries such as China, which is developing its shipbuilding industry in a big way, and Syria, which had indicated, in 1998, to consider establishing such a joint venture with Pakistan.