Upgrade-shy PQA sinking potential revenues by giving wide berth to night ships

LAHORE: Port Qasim Authority’s (PQA) inefficient vessel handling-led congestion in the navigation channel is causing significant financial losses to the national economy every day, sources privy to matters claimed on Tuesday.

The port that has turned into a coastal energy hub has seen a considerable increase in the volume of traffic during recent years. Since 2013, to be precise, the marine traffic at Port Qasim jumped by more than 25 percent but authorities made no tangible efforts to improve their infrastructure to ensure smooth sailing of port affairs round the clock.

Official sources said owing to inefficient management, the PQA had been unsuccessful in coping with increasing vessel movement, especially larger ones, resulting in unwarranted congestion and demurrages. Most worryingly, the night operation seems to have virtually come to a standstill for the same reasons. Port Qasim is one of the key ports of the country, handling more than 40 percent of seaborne import and export. More significantly, it has truly become an energy central of the country with the induction of handling facilities for liquefied petroleum gas (LPG), liquefied natural gas (LNG), coal and oil.

There is no dearth of funds for improving infrastructure of port as the PQA’s earning are healthy by any standard. The port handling charges are comparably on the higher side, sources claimed.

Establishment of new energy terminals particularly has increased revenue earning for the authority. Especially, LNG imports have led to a major jump in the earning of the PQA in recent years, making it financially strong. In 2018, approximately 88 LNG vessels arrived in PQA which is roughly 5.5 percent of the PQA channel traffic but earned the authority significant revenues.

Sources informed that one of the reasons for port congestion is almost negligible port operation at night. Although the navigational channel of Port Qasim is equipped with a traditional Light House, channel markers and shore beacons, there the authority is not employing these latest tools, especially for night operations.

Night operation is considered an important aspect of any efficiently-run port. Ports never sleep in today’s world, the sources observed. However, the PQA has done little for night navigation or installation of navigation aids such as Vessel Traffic Management System (VTMS).

If the port enhances the night operation this would immediately reduce congestion issues at Port Qasim, sources said and added the irony was that it did not even require any significant investment.

Since the advent of LNG consignments at the PQA from early 2015, according to an estimate, the PQA has collected almost $145 million as total port charges on LNG carriers. So, availability of funds is really not an issue, if the PQA wants to improve port infrastructure to run it efficiently.

Interestingly, the PQA has one of the highest port charges for LNG handling in the world, particularly if compared with Chinese, Egyptian, and Malaysian ports.

The revenue generation from LNG carriers does not end here. The PQA is also charging $100,000 on each LNG carrier handled at the port since March 1, 2016 as channel development cess over and above the port dues specifically for the development of passing bays in the navigation channel.

As far as income from channel cess development is concerned, since March 1, 2016, 130 LNG carriers have been handled at the PQA, which means authorities are collected almost $13 million for this account explicitly.

All these charges are loaded onto the RLNG price notified by the Oil and Gas Regulatory Authority (OGRA) and paid by Pakistani consumers.

Despite making such a huge sum of money for last over three years, no substantial work has been carried out to systematically improve port functioning.

Unfortunately, on the development side, the PQA management has done little and many of its own plans are still in the planning stage, sources said. They added that deepening of navigation channel, development of passing bays in navigational channel, acquisition and operation of new tugs were yet to materialise.

To sum it up, it is a port that virtually only operates in day time and accommodates smaller vessels, depriving benefits of economy of scale.

Sources emphasised that 24-hourly operations at the port would significantly smooth the handling and lessen the cost of doing business, creating a win-win situation for all stakeholders.