Monday January 30, 2023

Businesses hail govt for waiving port charges, ask to do more

By Our Correspondent
January 25, 2023

KARACHI: Businesspersons on Tuesday hailed the government’s decision to waive off the demurrage and port charges on all stranded containers at the country’s ports.

However, Karachi Chamber of Commerce and Industry (KCCI) President Mohammed Tariq Yousuf said that shipping companies, freight forwarders and port handlers should also waive off their charges as only a waiver for demurrage and port charges would not make much difference.

Yousaf said that banks were even delaying the release of documents where sight LC and/or formality for financial instrument (FI) has already been completed. This too was resulting in unnecessary demurrage and detention charges in addition to jeopardising bilateral trade relations.

“The State Bank has approved import funding from outside Pakistan to all those businesses who can avail such facilities whether through sister concerns or through those suppliers who can manage long-term credit, but the businesses need firm assurance that the government will not file any contravention against them at a later stage,” he added.

KCCI president further suggested that for all cargoes stuck at the ports and their documents in banks, whether on 60- or 180-day payment period, the payment maturity needs to be from the bill of lading date, not from the date of release of cargo.

“We need a clear directive for incoming shipments that they will also be timely released otherwise all the current stocks will be hoarded by local businesses to attain maximum profits, which would further aggravate inflation,” he stressed.

Banks should be bound to process all cases of Section 84 and 85 approved by the SBP before January 5, 2023 as

soon as possible, whereas all credit letters should be entertained without

prejudice and delays as they were already opened with the central bank’s approval.

“Immediate exemption is required for anaesthesia, all lifesaving drugs and medical devices so that the private and government hospitals across Pakistan can operate normally without any interruption,” he added.

Yousuf urged the government to let the import of raw materials and essentials run smoothly so there were no supply chain disruptions in the industrial processes.

Korangi Association of Trade and Industry (KATI) President Faraz-ur-Rehman welcomed the announcement by Federal Minister for Maritime Affairs Faisal Sabzwari and Minister for Commerce Naveed Qamar to waive demurrage fines on goods stuck at ports.

“By waiving the fines on goods stuck at the ports, millions of dollars of foreign exchange will be saved and the problems of the importers will end,” he said. The central bank has also ended the months-long crisis by allowing 180 days late payment and removing the condition of prior authorisation, he added.

On the other hand, he expressed concern over the increase in the SBP interest rate to 17 percent. He said the rich could earn profits by keeping money in the bank, but how would the poor with no savings survive?

KATI president demanded that the interest rate should be reduced immediately to save the industries from closing down, otherwise the economic crisis would likely become more serious.