Charges 85 percent higher than region: port tariffs to be reduced soon, says minister

The government of Pakistan would soon revise the tariff regime on its ports which, according to a comparative study, stands at $15,700, or 85 percent higher than other regional ports. The announcement was made by Federal Minister for Ports and Shipping, Babar Khan Ghauri, here on Tuesday while talking to media persons at Karachi Port Trust Hospital (KPTH) which, he said, would soon be given the status of a medical college.
"As ours ports are a bit more costlier than other regional ports, the government would soon revise port charges to boost trade," he said. The sky-high port and cargo handling tariffs at Karachi Port, Port Qasim and Gwadar Port have long been an ever-present setback to the country ability to make its exports competitive and trade-friendly in line with the agenda of World Trade Organisation (WTO).
According to sources, a comparative study of port tariffs in Pakistan and its regional competitors like Mumbai, Colombo and Dubai showed that a container ship, of 21,000 gross registered tonnage (GRT) carrying 400 TEUs (in and out), would have to pay 85 percent more at Karachi.
The vessel would have to pay $18,500 and $16,000 respectively at Karachi Port and Port Qasim, while charges for the same ship at Mumbai, Colombo and Dubai ports are $11,000, $6,400 and $2,800, respectively, sources said. They said that the differential, which ranges from $7500, or 41 percent, $13900, or 75 percent, $15700 or 85 percent, for Karachi Port and $5000 or 31 percent, $11400 or 71 percent and $13200 or 82.5 percent proved that the two ports are the costliest in the region.
They said that charges being collected by port operators, terminal operators and shipping lines, under various heads (sometimes fictitious) were 15 to 100 percent higher than other regional ports. The tariff difference at local and other regional ports could be estimated at a million dollars annual saving for the global recession-hit shipping lines which, the source said, were nowadays clinching weekly deals.
Now, when the government has become alive to the alarming situation, the shipping agents, wishing the government to act swiftly, expect that it would reduce the "wet charges", at least by 20 to 30 percent.
Pakistan Shipping Agents Association (PSAA) Chairman Mohammad Rajpar, welcoming Minister Ghauris announcement, said the present global recessionary situation was having a negative impact on the countrys trade. "KPT and PQA should revise their tariff downward to prevent shipping lines services from omitting Pakistan port calls in future," he said.
He said the shipping lines were thinking to cut their cost of operation, most prominently the port dues. "We suggest that this is time to take swift decision in days, as the shipping lines are revising their operation cost to Pakistan," he warned.
About the expected reduction in port charges, the PSAA chief said initially it should bring at least 30 percent relief in "wet charges" that include port dues, pilotage, tuggage, berth hire etc, and are paid by the shipping lines. In his talk with media persons Babar Ghauri said the ministry had discussed the proposal to make KPTH a medical college, while KPT would submit its suggestions after working out the modalities.
He said that the proposed college would have a "specific quota" for the children of KPT workers, while other admissions would need pure merit. He said the Prime Minister would inaugurate the long-awaited construction of Pakistan Deep Water Container Port (PDWCP) at Keamari Groyne in the third week of April. He also announced a family support package for port workers in case of death during discharge of duty. He said that the bereaved family would get one of its members employed, besides receiving financial support from the government.