High port charges make goods expensive
December 27, 2006
KARACHI: The massive capacity expansion and entrance of more private, local and international players into Pakistan’s port industry is not expected to bring any relief to the import and export sectors of the country because of unlikelihood of competition between them.
Currently, there are three private parties in the country’s port industry, which are Qasim International Container Terminal, Karachi International Container Terminal and Pakistan International Container Terminal. But their presence for the last many years has not resulted in reduction in port charges because of unwillingness of the port authorities.
A leading industrialist and exporter said that Pakistan was failing to realise its potential of up to $17-18 billion exports because of high port charges. He said Pakistan could export many products at rates cheaper than India’s, if port charges were reduced.
“Our products are cheaper than Indian products, but high port charges here make us unable to compete with them,” he said and added, “on the other hand, they increase the prices of imported goods, to the detriment of common Pakistani consumer.”
He lamented that ports increased their charges following the entrance of private sector into the business. The port charges continued to be very high despite the phenomenal growth in trade volume, which had reduced the cost, he said.
He said it was very disappointing that port authorities were earning profits in billions at the expense of the country’s economic growth. “They have got huge surplus in banks, on which they are earning interest. They do not invest in right places even if they spend that money. They build useless fountains, underpasses and make donations, but don’t do what they should. They give little care to the maintenance of berths.”
“When the government officials discuss port charges in their meetings they compare the tariffs of our ports with those of the expensive Indian and Iranian ports and not the cheaper ones,” he said.
Port authorities charge the importers and exporters in dollars, so their profits rise with the increase in the value of the greenback and their expenditure is in rupees. Both wharfage and pilotage charges are very high for the traders of the country.
Their profits are very high in proportion to their investments, he added.
Yasir Syed, an analyst at Aqeel Karim Dhedhi Securities, said the construction of more terminals at both Karachi Port and Port Qasim was not going to threaten the business of existing port operators. “Robust container throughput growth will allow high capacity utilisation levels for the existing port operators,” he said.
On the other hand, Gwadar Port was expected to be mainly a transshipment port and would cater to the needs of Central Asian Republics and China, he said. Hence it should not be a threat to KICT, PICT and QICT, he added.
Currently, there are three private parties in the country’s port industry, which are Qasim International Container Terminal, Karachi International Container Terminal and Pakistan International Container Terminal. But their presence for the last many years has not resulted in reduction in port charges because of unwillingness of the port authorities.
A leading industrialist and exporter said that Pakistan was failing to realise its potential of up to $17-18 billion exports because of high port charges. He said Pakistan could export many products at rates cheaper than India’s, if port charges were reduced.
“Our products are cheaper than Indian products, but high port charges here make us unable to compete with them,” he said and added, “on the other hand, they increase the prices of imported goods, to the detriment of common Pakistani consumer.”
He lamented that ports increased their charges following the entrance of private sector into the business. The port charges continued to be very high despite the phenomenal growth in trade volume, which had reduced the cost, he said.
He said it was very disappointing that port authorities were earning profits in billions at the expense of the country’s economic growth. “They have got huge surplus in banks, on which they are earning interest. They do not invest in right places even if they spend that money. They build useless fountains, underpasses and make donations, but don’t do what they should. They give little care to the maintenance of berths.”
“When the government officials discuss port charges in their meetings they compare the tariffs of our ports with those of the expensive Indian and Iranian ports and not the cheaper ones,” he said.
Port authorities charge the importers and exporters in dollars, so their profits rise with the increase in the value of the greenback and their expenditure is in rupees. Both wharfage and pilotage charges are very high for the traders of the country.
Their profits are very high in proportion to their investments, he added.
Yasir Syed, an analyst at Aqeel Karim Dhedhi Securities, said the construction of more terminals at both Karachi Port and Port Qasim was not going to threaten the business of existing port operators. “Robust container throughput growth will allow high capacity utilisation levels for the existing port operators,” he said.
On the other hand, Gwadar Port was expected to be mainly a transshipment port and would cater to the needs of Central Asian Republics and China, he said. Hence it should not be a threat to KICT, PICT and QICT, he added.
