Despite tax exemptions and simplifying procedures to register vessels under Pak flag, the revised shipping policy has failed to attract potential local and foreign investors who still see some provisions blocking the inflow of investment into this progressive sector.
Sources in the shipping circles told Business Recorder that instead of flying under Pakistan flag, they turned tails and drifted to other regional countries, where shipping sector is enjoying level playing field.
One of the major obstacles is lifting of freight for third country from India by Pakistan flag carriers, as both countries entered into amended shipping protocol after an interval of 30 years.
Sources told Business Recorder that the Federal Government had allowed ship owners to mortgage their ships in banks and financial institutions. Pakistani ship owners will be allowed to underwrite their ships from any local and international insurance company.
Firstly, the country has been deprived of potential foreign investment in ship owning as the prospective investors still shy over the monopoly of national flag carrier, Pakistan National Shipping Corporation (PNSC), in handling of oil cargoes in which it has a 'ten-year affreightment agreement' with three oil refineries of the country.
Under free market economy, the government could not protect any corporation and provide level playing field to everyone. Secondly, the ship owners also have reservations on the role of seafarers association in the country, which some time had placed demands that they did not deserve.
The World Bank has strongly recommended that the federal government should privatise the national flag carrier, as the role of Pakistani-owned vessels is strictly limited due to PNSC which enjoys a privileged and profitable position through its monopoly over the import of bulk petroleum oils.
The privatisation of PNSC, removal of cargo reservation and the maintenance of the existing tax incentives might encourage increased participation of Pakistan-owned vessels.
Presently, due to shortage of efficient cargo vessel fleet the national exchequer is paying an amount of over $2 billion as freight bill to foreign shipping lines. The annual national carriage reached the mark of 55 million tonnes amid growth in exports and imports in recent past.
Source said, only one container vessel Mega-I, in private sector registered after a gap of nine years, which at present is waiting for scrap. The ministry was hoping that four and five ships would be registered in the country under the revised shipping policy, but no other vessel arrived for further registration.
With more than 95 percent of the country's trade through sea, the availability of suitable number of ships in national flag carriers is inevitable as the existing fleet is unable to cater for the growing demands of national trade.
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