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May 13, 2021

Demurrage, detention charges waived as lockdown support

 
May 13, 2021

KARACHI: The government will waive demurrage/detention charges on trade containers over the extended Eid holidays and lockdown, minister for maritime affairs said on Wednesday.

Minister for Maritime Affairs Ali Haider committed the waiver during a meeting with a delegation of businessmen.

The government announced extended Eid holidays and economic shutdown with exemption to certain industries amid the coronavirus outbreak. Karachi Port Trust last year granted importers free access to its storage spaces for two weeks.

On the issue of non-inclusion of FPCCI nominee on the KPT board, the minister said one nominee of the apex representative business, industry, and trade body of Pakistan would be inducted on the KPT board.

Nasser Hyatt, president of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said the shipping companies allow limited days of free storage from the date of arrival of the cargo. As banks are also closed the documents would not be cleared within stipulated period and that would expose the cargo to hefty demurrage/detention charges, Hyatt said. FPCCI president said the Carriage of Goods by Sea Act and Bill of Lading Act have been languishing in the parliament for over 15 years now. These laws need to be ratified without further delay to streamline various charges, including shipping company charges once and for all. “Presently the sector is being governed by hundreds of years old law, whereby steam ships and containers are still referred to as sailing ships and crates.”

Hyatt said new shipping policies related to transshipment and deep-sea fishing would make Pakistan a very attractive transshipment market, boost export of value-added seafoods and generate foreign exchange inflows.

The meeting was apprised of the issue of high energy cost in Pakistan. The federal government is not allowing wind and solar projects of 617 megawatts, which were awarded lowest tariffs in country’s history at an average of US cents 3.64 per kilowatt-hour or Rs5.9, to enter into execution stage. The government is signing a new project of 1,263MW on imported re-gasified liquified natural gas that will produce much expensive energy between US cents 6 to 11 per kilowatt-hour and will also add to circular debt and import bill in foreign exchange.

Karachi port, which handles 76 percent of cargoes, had seen containers pile up with the traders not furnishing essential documents to get their consignments cleared due to lack of goods transportation amid coronavirus-led lockdown last year.

The government couldn’t then convince private terminal operators or shipping lines to waive demurrage and detention charges. Around 80 percent of the imports land at private terminals.