KETI BANDAR - PART OF CPEC

Prime Minister Nawaz Sharif, as per top news item in Business Recorder of 20th December, 2016, has directed the inclusion of KCR and Keti Bandar, part of CPEC KCR had been and still a most viable project as per study of JICA, to cater the needs of Karachi Suburbs. It was well utilized before its closure, so, it may be gift to Karachiites, a city of 25 million people, with no mass transit, congested roads with rickety buses. Railway must remove the encroachment first. As far as Keti Bandar is concerned, in past I, recall Mr. Gilani the Prime Minister-elect of Pakistan People Party (PPP) in his opening speech promised to give nation a new port Keti Bandar along with 100 days priority agenda, however, the government failed miserably to deliver on any agenda item.

It is a welcome sign for all Pakistanis in particular for seafaring community and maritime professionals that Prime Minister Nawaz Sharif has promised to give a kick start subject to approval of joint co-operation committee, but Chinese will insist for feasibility study.

Port Qasim was also conceived in the 70's and it is likely to turn into Industrial Hub Portby 2025. Whilst Port Qasim is helping the nation but it is seriously affected by silting due to be in the proximity of Indus Delta and South West Monsoon. The annual maintenance dredging cost runs into 1 billion rupees to maintain 12.0 meter draft. The plans are on way to deepen the port to 14 meter costing about 140 million US dollar. Present annual dredging BOQ is 5 million cubic meter and when dredged further, it is estimated that annual maintenance dredging will be around 10 million cubic meter thus costing in excess of 2-3 billions rupees to maintain the desired depth. When Port Qasim was conceived i.e. returning to old medieval site of Indus River Port Dewal, which was conquered by Mohammad in Qasim (a history of Indis by J.C. Powell, A Voyage on Indus by Alexander Burnes 1831).

The initial planners and hydrographers at the time of conceiving the Port faltered and could not rightly estimate the annual maintenance dredging quantum and cost which was far low comparing as of today's 5/USD per cubic meter Furthermore channel is 40 km with sharp bends restricting night navigation, when compared to Karachi, Pakistan Deep water container Port and Gwadar of 3.5 krn, where vessel can berth/sail 24/7/365. Time is money for ships and ship owners of today and economy of scale is the key to profitability, thus deep drafts are required. Non availability of night navigation for deep draft and long channels are considered as disadvantage in Port planning. I, sincerely hope that proper feasibility study of Keti Bandar may be carried out.

 

It is presumed that planners of Keti Bandar may study the geological history of Indus delta, coastal hydraulic survey, currents, littoral drift, hydraulic model studies, coastal geomorphology, Alexander Burnes surveys of river Indus and earthquake epic center and geologic structure of Indus Basin whilst carrying out hydrographic survey, wave patterns, forming of breakers in monsoon and the coast being low and not except at close quarters for safety of navigation.

 

Whilst referring to Indus Delta Map Keti Bandar is approachable via Hajamaro Creek, which runs beyond Ghora Bari. Since no hydrographic and other studies are available which were carried out in last decade, it could be any body's guess that how much dredging will be required to meet today's generation vessels of 14/16 meter draft and thereafter quantum of annual maintenance dredging to maintain the channel.

It is presumed that a proper feasibility by competent hydrographers and port consultants be carried out evaluating dredging and maintenance cost bearing in mind high cost at Port Qasim. The other aspect to be borne in mind is excellent hinter land connectivity before port is built. We must learn from the experience of Gwadar port, which is still handicapped due to nonexistent hinterland connectivity. It is imperative that hard core professionals having experience of port development may be engaged and this assignment of national importance may not be left at the mercy of generalist having no track of maritime faculty.

We must also learn from the experience of dredging cost at Port Qasim that of our neighbors i.e. India, Bangladesh and Thailand etc. The Hoogly River has silted Kolkatta Port thus forcing development of new port of Haldia at the mouth of Hoogly, Mumbai offshore port, Colombo south port, Chittagong offshore port at Juldia, so has been the case in Bangkok, where new port has been developed at the mouth of the river to cater deep draft vessels of 4th and fifth generation.

The next generation vessels are post Panamax needing 16/18 meter depth and futuristic vision is Suezmax, Malaca Max of 21 meter, thus in all probability  a site which is prone to heavy siltation being in Indus Delta costing billions in dredging and thereafter incurring annual maintenance dredging cost of billions, may only be considered after hydrographic surveys and financial feasibility to cater deep draft vessels of future.

We, must have more ports to develop the region and to cater our futuristic needs. Port development is a science and all issues have to be addressed professionally to cater the futuristic development in the maritime industry. India has 12 major ports and 185 small ports and they are investing 15 billion US dollar in port sector and 12 billion dollar in developing quadruple triangle i.e. logistics connecting all major cities to cater over 1 billion tons of Impo/Expo by 2020. India is improving its inland water ways and launched Sagar Mela Project.

It is a welcome announcement, however, a proper latest feasibility be carried out bearing in mind that it may take 10 years to port be operational from the drawing board, thus ships calling after a decade and their specification be bench marked to make a success story for our future generation.

Since a policy statement has been made thus same must be duly supported with credible latest studies, thus it is expected that the democratic government will make all plans public and will consider the views of local expertise available in selection of site.

Needless to mention as per historical fact the River Indus had many ports in the past i,e. Patala. Debal, Lahori Bandar, Shah Bandar, Gharo, Keti Bandar, Vikar, Daragi and Bambhore, these ports were destroyed due to the ravages of Indus river or by the change of its course, thus we must learn from the history and a very scientific and cautious approach is recommended in selecting the site of new port.

Meantime, we must concentrate to make new commercial Port Pakistan deep water container f ort and Gwadar fully operational and optimum utilization of Karachi and Port Qasim. It is equally important to do traffic fore casting and our needs for 25/50 years.

Pakistan growth is hanged on CPEC thus, we may embark on project with caution. God Bless Pakistan.

Captain Anwar Shah Interview Published in Pakistan & Gulf Economist, December 2016.

PAGE: WOULD YOU EXPLAIN THE PORT OPERATIONS AT KARACHI PORT AND HOW YOU ARE DESCRIBING IT AS THE MOST EXPENSIVE PORT IN THE REGION?

CAPT. ANWAR SHAH: Ports play an integral role in the economy of any nation. Pakistan is blessed with a coastline that stretches 1,046 Kms with the Karachi Port being the largest port in the country. Karachi Port Trust (KPT) claims to have handled a record 50.05 million tons of cargo during fiscal 2015-16 up 15.25% from 43.42 million tons in 2014-15.

With KPT handling over 70% by value and over 60% by weight of all sea-borne trade in Pakistan, shipping lines and trade bodies continue to question the efficiency and cost of this handling. At purchasing power parity, the period during 2015 and 2016 has globally witnessed some of the lowest shipment charges in history. However, cargo handling at Karachi arguably remains one of the most expensive in the South Asia region.

PAGE: DO YOU THINK THAT OUTSOURCING OF PORT AND SHIPPING SERVICES WOULD BENEFIT TO THE ECONOMY?

CAPT. ANWAR SHAH: The early 1980s witnessed a new trend in the global ports sector with major ports migrating towards the landlord port concept to improve cargo handling and rationalization of pass on costs. Over the period, major ports have either outsourced cargo handling to terminals specializing in such handling or have outright sold port infrastructure to private entrepreneurs specializing in the handling of large volumes of specific class of goods owned both by themselves and by others.

Ports authorities in Pakistan unfortunately have yet to awaken to the logic and benefit behind these concept resulting in by far some of the highest levels of inefficiency, pilferage, damage, loss of opportunity and costs in the region.

PAGE: WHAT IS YOUR VISION FOR IMPROVING PORT AND SHIPPING INDUSTRY IN PAKISTAN AND TO COPE WITH THE ISSUE OF CONGESTION AT PORTS?

CAPT. ANWAR SHAH: The Karachi Port Trust (KPT) in 2007 embarked on a venture to building the Pakistan Deep Water Container Port (PDWCP). The project was envisioned to have berths specifically designed to handle the largest container vessels afloat in the world and to have yard operations using the latest equipment, processes and technology available anywhere in the world. All of this would have been a very first in the region.

In 2007, Hong Kong based Hutchison Port Holdings (HPH) and KPT signed an agreement to construct the first phase of PDWCP at Keamari in Karachi. The terminal was to originally commence operations in 2010 after a three years construction period. Under the agreement KPT was responsible for providing the infrastructure whereas HPH as the, terminal operator would building the yard and equip the terminal with the latest technology.

This terminal was planned to relieve insistent congestion witnessed at KPT. Both container ships and their containerized cargos were suffering delays due to congestion. Vessels had to wait at the outer anchorage while berths at which they could come alongside become available. The large number of small ships calling at the port in Karachi strained its vintage infrastructure. Large ships that offer economies of scale could not call at the port due to the inherent limitations of crumbling berths, shallow rning circles, small cargo handling cranes, redundant processes and incapable port staff.

Containers once off-loaded from vessels had to sit at the port for days awaiting customs backlogs and limitations of yard space and long gate procedures. The customs clearing process, by and lage, left a lot to be desired and scrupulous officers regularly bringing a bad name to the organization. The land side handling was plagued with cargo losses due to damage and pilferage.

These and other inefficiencies result in the high cost of shipments, both imports and exports. This in turn generally increases the cost of doing business in the country thus enticing businesses, both big and small to dodge the taxation system and to compromise on quality of products and to ignore environmental considerations. Individual business and their respective trade organizations have regularly questioned why port in Pakistan continue to remain expensive while the global trend has been for reductions in cost incurred at ports.

PAGE: YOUR COMMENTS ON THE PLANNED PDWCP PORT IN THE DEEP SEA?

CAPT. ANWAR SHAH: The PDWCP, was planned to fill the gap at the port of Karachi resulting from use of old infrastructure and process. The project would have resolved the limitations issues by providing containerized vessels shortest streaming times to berths capable of handling the largest containerized vessels. The berths were planned to be equipped with the largest and most technologically advanced cranes. The yard was to have the latest systems and processes and most efficient customs procedures akin to those at global modern terminals.

Feeder vessels previously calling at the old berths at the Karachi port cold continue to do so if they wishes. Shipping lines willing to upgrade their vessel size to large panamax and port-panamax sized vessels could enjoy economies of scale offered by these large ships.

To put things into perspective, the total container handling capacity in Pakistan before the first phase of the PDWCP was about 2.5 million TEUs per annum while terminals handled in excess of 2.8 million TEUs in 2015. The handling over designed capacity have heavily constrained terminals doing more long term harm than good. Current terminals are also constrained to handle vessels over 8,000 TEUs whereas the average is in the region of vessels sized about 3,500 TEUs. The first phase of the PDWCP was designed to handle the Triple-E class of container ships, the largest afloat anywhere in the world today.

While embarking on building the first phase of the PDWCP, KPT has been wounded by numerous obstacles, most of which are said to be self-inflicted. In the view of many, KPT has been wounded by numerous obstacles, most of which are said to be self-inflicted.  In the view of many , KPT HAS BITTEN OFF WAYS MORE THAN IT CAN CHEW, PDWCP project being the largest. Persistent delays in providing the KPT’s 100 years plus history. Delays in providing infrastructure to the operator has left the terminal project in a sorry state and unable to commence operations even after almost 10 years from the signing of the agreement in 2007.

PAGE: WHY THE NEWLY CONCEIVED PORT IS GETTING DELAYED?

CAPT. ANWAR SHAH: With more than a year having passed since the terminal operator imported major equipment in 2015 the start of operations is nowhere in sight. KPT has yet to commence dredging of the navigation channel and customs have yet to notify the terminal as a landing place for loading and unloading of containers from shops at the terminal.

Sources within the shipping sector have confirmed that the operator has completed its obligations in advance of KPT’s long delayed works and awaits the notification form Customs and KPT’s dredging.

KPT has invested over $800 million into the project with HPH investing over $600 million, despite the huge investment into this project and even after a lapse of over nine years since the singing of the agreement, the local economy remains deprived of the benefit that should have started to accrue from the project that currently said to providing employment to over 350 employees and when fully operational this number is expected to increase to over 1,500 direct employees.

PAGE: WHAT IS THE CURRENT STATUS OF THE NEW PORT?

CAPT. ANWAR SHAH: The sources within the shipping sector confirm that since august this year the operator is ready to start operations of the first phase of the project and has had to cancel commencement of operations at least three times due to delays from KPT and customs.  It remains to be seen if the Ministry of Ports and Shipping is able to take stock of the situation and whether it can play a role in getting the project on track and operational.

This project was seen to be positioned to facilitate China-Pakistan economic corridor (CPEC) by way of efficiently handing the imports required by projects within CPEC. PDWCP itself not being a part of CPEC would be instrumental in the success of Gwadar during the initial years when PDWCP could act as a hub port of Gwadar and handle the feeder trade to Gwadar port.

Delays to the PDWCP project need to be investigated as these will have a follow-on effect for the Pakistani economy as a whole. The benefits from such a major project of national importance should have started to accrue to the economy way back in 2011.

It would be extremely difficult to estimate the quantum of losses inflicted to the economy by these delays however, a conservative estimate of the loss suffered by KPT alone as a result of delays to the project exceeds $150 million due to the loss of rent, royalty and port dues. Somewhere in the corridors of power, these questions need to be taken up and addressed towards attempt to set right a project of strategic national importance. Foreign and national ship owners and lines are riled over KPT increase in port tariff. It is virtually doubled after lifting cap on ships. My humble recommendation that KPT may revert to its existing tarrif, as hike has made it very expensive in the region being benchmarked to Colombo and India.

Life time achievement award was conferred by admiral Muhammad Zakaullah Chief of Naval Staff to Captain Anwar Shah on his meritorious services to Pakistan.

On the occasion of honouring Veteran Mariners / Annual Dinner 2016 of Master Mariners Society of Pakistan

Chief of Naval Staff being Chief Patron MMSP, was chief guest at Master Mariners Society of Pakistan ANNUAL DINNER 2016 and Life time achievement award to Veteran Mariners  at Maritime Museum Convention Hall Karachi on 26th April, 2016.

The President Capt. Haleem Siddiqui in his inaugural address, welcoming the Chief Guest, valued invitees and honorable members of the society, deliberated the role of eminent mariners prior inception and thereafter 1947 to-date. He lauded the role of Master Mariners, who not only contributed in the establishment of Merchant Marine in the newly conceived State of Pakistan, but were called upon by emerging countries viz Singapore, Saudi Arabia, Malaysia and Sri Lanka to build their fleet and Ports. This honour was bestowed and today the largest Shipping Line.

NOL was established by a Pakistani Master Mariner. The President touched in detail, independently the services rendered by the Master Mariners from 1947 todate highlighting all. He made it abundantly clear that merit was the only choice in those days, so professionals of repute earned recognition locally and abroad both. The President requested the Chief Guest to facilitate recognition Merchant Mariners on merits, so that Master Mariners may be able to give their professional acumen as a value added product in the growth. The president also appreciated the services of Capt. Anwar Shah  Ex-DG. Ports & Shipping / Chairman Gwader Port and lauded that he is the first Pakistani to become the governor of World Maritime University Sweden, a singular achievement. Capt. Shah’s role as share holder director of PNSC was also dilated upon. The President raised the burning issue of Maritime administration, which has become dysfunctional due to non presence of technical staff  and not complying to IMO requirement, being a serious default , thus urged the authorities to ensure filling slots in Maritime administration, port state control expeditiously.

Chief of Naval Staff conferred Life time achievement award to Capt. Anwar Shah for his meritorious services  to Maritime fraternity. It was an honour that Capt. Haleem A. Siddiqui was conferred Life time achievement award  of Lloyd’s List, a singular achievement.

The plight of PMA Cadets was also highlighted and impressed upon Government to take corrective measures.

Chief of Naval Staff  responded to the call of President to work together for betterment of Maritime Industry and Fraternity. CNS was also pleased to see harmony amongst Mariners.