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.

PORT STATE CONTROL AND MEMORANDUM OF UNDERSTANDING CAPT. ANWAR SHAH

Shipping is the most international business in the world. It cannot operate globally under any unitary regulatory control of an individual state. It has to comply with common standards developed at international forum; and that forum is now IMO – International Maritime Organization, a specialized agency of the United Nations.

However, IMO is not an international government. It cannot enforce any compliance. That has to be done by the Member States. Once the common standards are adopted on the floor of IMO in the shape of an international convention, it is now for the Member States to accept those conventions by becoming parties to the conventions. It then becomes the legal and moral obligation of the relevant state to transpose the provisions of such conventions into national legislation - that is to give force of law within its jurisdiction. The Member State will then enforce it within their jurisdiction as part of their national law.

Every sea-going ship has to be registered in a country to fly its flag. Through the process of registration it gains its identity. The certificate of registry will have its name, port of registry, flag, IMO number, call sign, MMSI number, dimension and tonnage, name of the owners etc. In old days it was customary to have the name of the master endorsed on Certificate of Registry but it is not necessary now. It is also not necessary to show financial status with respect to any mortgage because the transcript of the ship (obtainable from the registrar) will clearly show this information.

A ship registered in Pakistan will be referred to as a Pakistani ship and shall fly its flag. This ship will comply with Pakistan rules and regulations for maritime and shipping, no matter where the ship is. In addition, when in a foreign port, the ship shall also comply with the requirements of the host state. This is why the ship flies a courtesy flag of the port state. Hopefully the statutory requirements will be similar as both flag state and the port state will have their requirements derived from common IMO conventions.

By now it is clear that every state will have two different modes of control and enforcement - one as Flag State on its own ships and the other as Port State on visiting foreign ships. Together they create a safety net that rogue ship-owners and sub-standard ships cannot dodge. The port state control (PSC) must be exercised as a hand of cooperation to the flag state. Supposing we board a German ship in Pakistan to exercise Port State Control the underlying message to German Administration will be “Don’t worry, we will ensure safety compliance on your behalf. Your lives are equally important as ours. We will do everything that you would have done”. It is very important to impose equal standards (to own ships as well as foreign ships) so that none can blame you for double standards.

There is another big question. Can a flag state think that it need not comply with the requirements of a particular convention because the state is not a party to the said convention? No, because its ships will be subjected to those requirements when it enters the jurisdiction of a port state that is a party to that convention. This is because the convention requires every party state to enforce the requirements without any favorable treatment to a ship from a non-party state. If a ship is to trade freely around the world it has to comply with the requirements of all conventions in force. It is better to be an active player than sitting on the sidelines – I mean it is better to become a party to the convention if, in any case, I have to meet the requirements. There is no way to operate a sub-standard ship on the plea of not being a party to the convention.

During the Port State Control the inspector should explain all deficiencies in a manner that ship can get them rectified. In case of serious deficiency, conditions should be attached for their rectification within a given period. The authorities at next port of call may be alerted where necessary. Ship may be detained only – “when allowing the ship to proceed to sea may mean serious threat to life, property or environment”. Such ships must remove all defects and deficiencies before being allowed to proceed to sea.  

Port State Control inspectors should always remember to make correct reference to each and every deficiency. Such references may normally relate to international conventions for common understanding of all concerned. However, in respect of detention, it is very important to make reference to provisions of national law. This is because if the ship-owner wants to challenge the detention (through local agents) the court shall go by the law of the land.

Another thing must be clearly understood. Detention is not arrest. A ship may be arrested against claims only on the order of a court. It got nothing to do with the safety standard of the ship. Detention is an administrative/ executive function of the Administration and cannot be linked with any commercial outcome. That is why port authority cannot conduct Port State Control (because the port authority collects charges for extra stay, even if it is due to detention). It is done by the Administration of the State to which the port belongs.

Now we shall focus on Memorandum of understanding which stands for Memorandum of Understanding. There is no reference to any Memorandum of understanding in any of the international conventions. Such Memorandum of standings are normally signed by a group of countries in an area/ region. It is to coordinate Port State Control inspections in a rational way so that unnecessary repetitions can be avoided. It also keeps Member States informed of status of ships visiting the area so that more specific actions can be taken against rogue ship-owners and sub-standard ships. Paris Memorandum of standing puts together a large number of European States and this has made life difficult for substandard ships to operate in Europe. Similarly Tokyo Memorandum of standing together a number of states in the Far-East. It is not a must for states to join some Memorandum of standing. Every sovereign state can exercise its inherent right independently. However, Memorandum of understanding allows regional countries to share each other’s experience to work together for common goals. Memorandum of understandings utilise common forms and coding system. It is interesting to note that United

States has not joined any Memorandum of understanding. They conduct Port State Control on foreign ships through their Coastguard. Canada is a member of both Paris and Tokyo Memorandum of understandings (Paris Memorandum of understanding for Atlantic coast and Tokyo Memorandum of understanding for Pacific coast).

Finally we shall talk about Classification Societies/ Recognized Organizations. They are like independent standard institutes. A ship remains classed with a Society so long it meets the laid down standards. In the charter market it matters a lot if the ship is classed with a reputable society. Because these societies are fair and independent, many flag states delegate lot of statutory survey, audit and certification with them. It must be clearly understood that only functions can be delegated and not the responsibility. It is for this reason that flag state must retain a supervisory role to ensure proper compliance of statutory functions. Because Classification Societies would not like to displease their clients, Port State Control cannot be exercised by Class Societies.

Classification was never a compulsory requirement. Now it has become. Though SOLAS, LL and MARPOL give lot of requirements yet, it does not provide a complete code for construction of ships. Classification Societies also have requirements relating to inspection of every part, component and equipment at least once every five years. IMO has finally done something sensible by introducing in SOLAS-74 Part-A1 Reg. 3-1 that a ship to which the Convention applies shall be designed, built and maintained, including its mechanical and electrical components, in compliance with the requirements of a recognized organization.   

In Pakistan, Director General of Ports & Shipping is the focal point of U.N. International Maritime Organization, thus incumbent on them to participate in Maritime Safety Committee meetings twice a year and Assembly too, enable remain aware of new convention of IMO and ratify them through MOFA note of verbally. Pakistan has yet to ratify many IMO conventions.

The Book Beyond The Horizon: Maritime Perspective has been published

EMERGING ASIAN ECONOMY – "MARITIME PERSPECTIVE"

Dalian, in China is blessed with reputable Maritime University affiliated with World Maritime University Malmo, Sweden. The product of Dalian University is compatible to world standard, so is the ship building industry has grown to the extent that newly built ships are competing with South Korea and Japan. The stringent quality standard of international classification societies are complied to deliver a product inferior to none.

I, was also amazed to see the Shenzhen Port, a marshy land, transformed into Container port handling 10 million TEU, with only 3.7 square Kilometer of land. The Port has 22 meter draft and handled largest Container ship of China Shipping of 19100 TEU.  The technology is the most up-to-date as sitting in Yantin International Container Terminal (YICT) play with koy sticks to control the handling containers with no gantry’s operators. The in-house built software is used, instead of branded ones, promising efficiency. The maximum time of a trailer in port is restricted to 30 minutes, whilst train logistic is connected to port as well.

It, was interesting to see the YICT at Shenzhen Port auto gate project, built on the electronic data inter change platform and the optical character recognition portal, the innovative 70 automatic in gates and out gate lanes enable precise transmission of information and rapid direction to yards, thus improving the terminals operational efficiency, ensuring timely departure of ships, within 8 hours. The port has Shenzhen –Yantian is an integrated bonded area, with off dock ware houses too. YICT cranes are equipped with high pressure sodium lamps, which consume less electricity than conventional lamps. The latest LED lamps are using 75% less electricity. The Shenzhen Port has 16 deep water container berths, 74 gantry cranes, 200 yard gantry cranes, with total berth length of 7885 meters. The world mega box ships are calling to this port which caters mainly to export from China.

 My study tour of Maritime University, yards and ports are manifestation of the fact that in past three decades, the structure of global economy has undergone substantial changes in favour of emerging economies, with China topping the list. China is leading from the front by announcing setting up of Asian Infrastructure Investment Bank, along with other 20 Asian countries to help build trade related infra-structure.

The (NDB) new development Bank of BRICS and the AIIB, will provide fresh source of funding for developing economics, without depending on Bretton woods institution World Bank, which puts rigid conditions. AIIB may be seen as rival to Asian development Bank, dominated by developed world.

During my visit, I was briefed that China and Australia has signed Free trade Agreement (FTA) and Yuan Clearing Bank is to be opened in Sydney. China has also achieved first man made river from South to North at the cost of 81 Bill USD, to feed the water starved region

I, wondered as how China transformed so rapidly, but seeing is believing, as I found Shanghai Pudong financial District which was a farm land in 1980 as I, recall vividly has turned equally

as attractive as Manhattan and so in the bund area. Nanjing road can be bench marked to Time Square and Oxford Street.

Having, seen the transformation that too rapid, I, recalled comments of economic Nobel Laureate Joseph Stigletz in Vanity Fair magazine who says China enters to the top position in 2015 and will produce 17.6 Trillion GDP this year thus a new global political and economic order is emerging and the comments of Martin Jacques, a British journalist a well known pundit on Chinese issue, since publication of his 2009 book “China rules the world.” In a recent article published in Financial Times of Martin, he argued western view on China Governance as flawed. China’s governance system has been successful for more than three decades for transformation with remarkable achievements in all faculties, be it maritime, town planning, Electronics etc etc. He compliments achievement and praise the core of much wider change in Chinese society. I found Chinese attired in branded clothes and hard to see any traditional mind set in urban centre, thanks to the reforms of Deng Xiao Peng. The economy does not exist in isolation from society, it is not some thing one may change and everything else remains same.

The Chinese Governance system as I observed, may be complimented for absorbing 30 percent rural population in urban centers, creating modern education, health care, housing to  re-engineer and re purpose the state. My study reveals that there exists an extra ordinary relation-ship between State and Society, extremely long period of time say 2000 years. What I learnt from Chinese, that State is fundamental expression of what China is and what Chinese means, unlike west or other Asian countries governed by west minister sham democracy.

We, in Pakistan may learn from them, but I doubt it can be transplanted here, as the history and circumstances are different. The Chinese State is pretty unique institution, they only countries close to Chinese Governance system are other Confucian based societies. In the Sub-Continent Senskar/Parempara and religion plays a vital role thus hard to transplant Chinese Governance.

I, may mention U.S. political scientist Francis Fukuyama as he writes in his book “ POLITICAL ORDER AND POLITICAL DECAY” he believes that three  building blocks are imperative for well ordered society, a strong state, rule of law and democratic accountability, which we sadly miss all three in our land of pure. There is a growing recognition of serious governance problem in west, no solution is in sight nor west can escape stagnation. West continues to decline in global position, the ruling elite is unable to resolve as the case with us, whilst U.S. being more successful with shale revolution, but still do have problems. China is equally facing challenges now, due to transition from very labour intensive period of growth, to less rapid growth with technology based and consumer based economy, it may be difficult transition too. Hope Chinese Government strikes right balance. I found my study tour from universities to urban centre very educational in November 2014.

I, was fortunate enough to tour India in December 2014, also an emerging country like China being engine of worlds’ growth for past couple of decades. Indian economy has grown from 46 bill USD import/export in 91/92 to 756 Bill USD Import/Export in 2014, however 91/92 had

trade deficit of 6 Bill USD, where as today it has swelled to 136 Bill USD . The Metro at Calcutta and Delhi are operational and well maintained, but slow in speed when bench marked to Hong Kong and Shanghai. Shanghai caters to 30 mill people, however the Metro is managed by a Hong Kong Company. Shanghai has magnetic levitation train speeding to 413 km from Pudong airport to Shanghai city about 30 miles away, time to travel is only 7 minutes.  I, learnt from consultants in India that Government has given consultancy to Chinese for Bullet trains to improve logistics in India. India have 133000 miles of Railway track of colonial days catering to 23 million passengers and only 2.6 million tons freight. Indian Railway needs renovation/investment as 93% of income is spent on operations only. India is seeking 93 bill USD in their 5 year plan to replace 25% century old bridges and track, thus looking to Chinese assistance to transform

Indians are building highways too, but way behind China, as they lack quality and international standards. Indian’s budget 2014 announced by Finance Minister Arun Jaittey gave a booster dose to maritime sector too.

The Ports and Shipping policy has set ambitions plans but sad to note that 12 major Indian Ports along-with 85 other ports handle total 7 million TEUS, whilst only Shenzhen in China handles 10 mill TEUS, whilst Shanghai is the leading container handling port leaving Hong Kong and Singapore way behind. Despite, dedicated efforts Indian Ports can’t handle E, EEE class container vessels, thus Colombo South port on the main East and West route is benefitted, handling Indian import/export, as regional hub . India has miserably failed to make any of its Port as regional hub, as like Karachi Port Qasim, all Indian Ports are feedering, the reason being no deep draft ports to cater new generation vessel exceeding 10000 TEUS    

Indian Government is committed to bring down its logistic cost, thus developing more inland water ways the cheapest mode of transformation. The blue print of Ganges project of 4200 crore rupees is so impressive to cover 1620 kms from Allahabad the confluence of Ganga / Jamna to Haldia port near Calcutta. The Government of India plans to make it navigable and restrict 50 major cities to drain 2.7 billion liters of solid waste into Ganges, by constructing concrete walls on both banks of Ganges. India is developing Metro in other cities, which may be completed in 5 years. If Chinese built the bullet trains ,  India’s logistic will be considerably improved. Whilst summing up at Delhi, I concluded that China’s neighbors are at least one century behind, because China has strong government, whilst we follow defective sham west minister democracy, which is not working even well for Britain. Indians are trying hard by allocating 5000 crore rupees to develop scientific ware housing infrastructure to improve the shelf life of agriculture, enable improve farmer’s revenue.

Having worked for the Government, I, presume in developing countries, most of which were under colonial rule for long period of time, the relation between Government / Ministers and Civil servants is not well defined or understood. Lack of documented procedures and Government guidelines are to blame. If a minister is corrupt, he tries to involve civil servants without written orders, and poor civil servants submit due to fear of loosing jobs. This is how

state machinery are used for party political gains, the situation in sub continent is same, thus unless we get out of quagmire the progress will never be rapid as China.

I, feel that Karachi deep water port convieved in 2006 to be completed in 2009 is still in limbo due to lack luster attitude of Karachi Port Trust, with serious impediment of dredging and logistic access to the newly built port. The rail connectivity seems to be only viable solution as KPT has scrapped its original  plan of bridge connecting to Manora and western break water cargo village connecting to Northern bye pass. Even Liayari Express way remains in doldrums due to connectivity on its north/south route of 5/6 milometer. Our new Port can be replicated like  Shenzhen if we take it seriously.

Let us ponder, as to how achieve transformation of our country by studying Chinese model and replicating development plans, instead of relying on the “MOU signed” mentality. Let us be pragmatic to transform our country by replicating the Chinese model of transformation. We must learn from all to keep improving.

This article was also published by PAKISTAN & GULF ECONOMIST  on 26-Jan-2015.
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Captain Anwar Shah
Maritime Adviser to President
Karachi Chamber of Commerce and Industry.
captshah1@hotmail.com

Happy monsoon

Meteorological reports and data confirms that due to El-Nino effect in the Pacific and the Bay of Bengal, India and Pakistan may have 40% drier monsoon, thus a likelihood of a drought, even Australia will be affected thus they have lowered their wheat production by 15%, so are Indians equally worried tightening their belts and taking preventive measures. Hope it is not the same drought of 2009, as we and India had suffered. 

Monsoon period in subcontinent is officially declared from 15th May to 15th September, thus warning finishing boats and small crafts to venture in Arabian sea and Western Ghats of India ie Kerala, Mumbai gets extensive showers and sea swell increases at Karachi and Mumbai. In case of Karachi, the rainfall record is minimal and it rains due to low pressure being formed in Rajhistan, as Karachi has neither mountains nor vegetation/forest. 

Monsoon is said to be friendly to Congress/Ghandhis and PPP/Bhuttos, however, it appears that Modi and Nawaz Sharif may find it unfriendly this year due to weather phenomena. India has coastline of 7500 kilometres and also has more than 5000 kilometres inland waterways, with headquarters at Noda, Delhi. For some reason the just short insinuating that monsoons in India by habit are pro-Congress, anti Hinduvta in lighter vein. If India gets a drought it is historic that peasants attack grain traders for practicing witchcraft. I refer to David Hardiman's book on 1832 food scarcity in India in his famous book "History of the subordinated". Modi has increased diesel prices and his budget could not be free of his bete noires prescription. The spin doctors in India and Pakistan give our PM credit for launching metro, bullet trains etc, robbing their predecessors share of brownie points. Modi and Nawaz will have to tackle daylight robberies, if hit by drought. Premier Indian historians "D.D. Kasambi" recorded that since last 2000 years peasants in India suffered misery due to usury. I, sincerely hope that our government has contingency plans to deal with drought in Pakistan, if the predictions of meteorologist come true. 

Modi was visiting Brazil and he did manage to form BRICS Bank headquartered at Shanghai China, at their 2010 world expo in Pudong development zone whilst ensuring the first President to be Indian and Brazilian Chairman. China has agreed to pay 41 billion USD whilst others will pay 18 billion USD, raising capital to 100 billion USD. Putin/Chinese/Indians/Brazilians have set the ball rolling finding a substitute to Breton Woods, World Bank and IMF, thus forging ahead for multipolar world from unipolar, as Putin fears sanctions from west due to Ukraine crises. Chinese feel that BRICS Bank will reduce western dominance of Global financial system and West-dominated multilateral agencies. 

The countries around the world may find new refuge for borrowing in case of poor economy, without dictations of the West. It is a good omen for underdeveloped world to set itself free from clutches of the World Bank/IMF. BRICS nations are 41.6% of world population and 25% of the world territory, contributing 19.8% to world's GDP. It consists of Brazil, Russia, China, India and South Africa but seems Indonesia too. China has consolidated its 7% GDP growth, whilst Indians are trying to manage around 5% GDP if monsoons fail, they may reel around 4%. Indians are fearing inflation to rise from 5.4 to 8.5% as that of Pakistan if monsoon is dry, we may hope for the best. 

It was shocking in my study tour of Europe recently to see growing of opium in fields from Vienna to Budapest, but Austrians claim that they use it in their sweet dish only and being fully aware that it can be misused, thus they keep a strict eye, however, opium fields in Fata/Afghanistan and South America were burned due to pressure from West, which can't control its populace from producing marijuana. Surprisingly our anti narcotic force reported in Senate Standing Committee recently that since last few years west has encouraged poppy cultivation in Afghanistan on area of 6500 hectares and proceeds are used for war on terror and funding of TTP. What a double standard of West. Hope BRICS may give some relief to poor countries from dictations of West and its double-standard 

India being part of BRICS and Modi elected as leader by referendum has set itself on growth trajectory inducing FDI and facilitating local and foreign entrepreneurs to invest in Indian economy. India inherited 50,000 miles of Rail Roads from their colonial Masters in 1947 against our 5000 mils, but as of today Indians have 133000 miles of track, lifting 2.6 million tons freight and 23 millions passengers. Indian Railway is said to be doing well, but need renovation/investment as 93% of Railway income is spent on operation, thus leaving minimal for development. India is seeking 93 billion USD in their five-year plan to replace 25% century-old bridges, signalling system and cater to freight lifting from Ports to remove congestion at their major Ports. The logistic cost in India and Thailand is 16% and in our case it is 29%, however when bench marked to US/Japan/UK/Europe where logistic cost is only 6% compared to 29% in Pakistan (source World Bank). We inherited 5000 miles of rail track but reduced rail road to 2000 miles. So sad! 

India's budget 2014 announced by Finance Minister Arun Jatley gave a booster dose to maritime sector, whereas in Pakistan Budget 2014 concessions allowed in Shipping Policy 2001 stands withdrawn and 10% withholding tax is imposed, what a contrast in mindset. Needless to mention that Shipping Policy 2001 and Merchant Shipping Ordnance 2001 was gift of Nawaz Sharif Government to Maritime Sector, as I was nominated as member of five-man task force in 1996 and chaired again in 2006 to amend the policy to induce entrepreneurs. Indians are now allowed to register their ships in tax-free overseas jurisdiction without opening subsidiaries there in a bid to increase national tonnage. This scheme will allow ship owners sitting in India to register their ships abroad, to be known as Indian controlled fleet. Indian ship owners may raise cheap funds from International lenders; however, there shall be stipulation to hire certain percentage of Indians on ships to improve employment. Indians are worried with high logistic cost thus out to use the cheapest mode of Inland water transportation, a project of national water ways - one on Ganges will be developed from Allahabad to Haldia, a distance of 1620 km enabling coasters of 1500 DWT tonnage to navigate commercially. The project may take 5 years at the cost of Rs 4200 crores. The searching question is, can Modi clean the Ganges, India's biggest sewerage line snaking around northern India from Himalayas to Bay of Bengal about 2500 miles. 400 million people live near it in 50 towns, pumping untreated sewerage hazardous chemical 2.7 billion liters, whereas treatment facility is only 1.2 billion liters. Swiss may help as their all lakes are 99% potable water. We are no different as all our rivers are polluted and Karachi harbour receives 472 MGD untreated waste water depriving naval commercial ships of 30% of their life, causing erosion and blocking sea water suction, based on report to Senate standing committee in 2006. The sewerage is pumped through three nalas. KWSB has treatment capacity of only 151 mgd but treats only 55 mgd. PSDP has no allocation for water and sewerage plants at Karachi. Indians will also be unfolding ship building policies soon. Indians will use Gujarat temp plate of Modi for PNT development. It is planned to set up 16 new port projects providing rail infrastructure to connect hinterland, thus decongesting their ports. Indian customs will clear goods 24x7. Indian finance minister has allocated Rs 5000 crore to make available scientific warehousing infrastructure in the country, to improve the shelf life of Agriculture produce thus improving the revenue to the farmers. (Source International Shipping News - 11.07.2014) 

It really saddens me to hear that our conceived projects like Nandipur have been made prematurely operational thus giving a worldwide shame on our planning and project management. No headway at Gwadar, except MoUs. My searching query is why can't we learn from our neighbours and our leaders should serve rather trying to become Kings or Caliphs. 

Feudalism is Pakistan's serious problem, French and Indians have resolved it, but no route map for us. French gave up on August 4, 1789, whilst Indians in Nehru's land reforms of 1952. Feudalism in Europe originated after fall of Roman Empire, it was divided into three estates, nobility or feudal lords being first, clergy the second, followed by the rest of people, a true replica of today's Pakistan. Although feudalism in Pakistan has changed its character, it is still politically, socially and culturally dominant in Parliament and Governance. Feudalism remains unchanged in Sindh and Southern Punjab, with Sardars and Maliks in KPK/Balochistan. Sindh and south of Punjab feudal lords claiming to be descendents of the Sufi Saints, have said to be inherited spiritual power, which is great hindrance in the development of society. If a Mughal Rip Wan Wickle wake up in Pakistan, he would not be out of place in Pakistan. There is no hope that these feudal lords will realise the changing situation globally, which has no space for the redundant institution of feudalism and feudal mindset. It has become outdated and lost its utility as same was sponsored by Mughals and Britishers. When feudalism is abolished in Pakistan, then only talented people will emerge and contribute to the development of society. If it is not done voluntarily, perhaps violence may come in the end to eliminate it. Louis XIV, the most powerful French ruler weakened the feudal and clergy both by asking them to live at the court of Versailles and spend lot of money to maintain their standards. This is most respectable solution for our feudal even today, as they will not be hurt. 

I, as a common and patriotic Pakistani have no ambition, but do look for change, so that posterity may get out of the clutches of feudalism and Pakistan may have a route map at least to grow as India, China and Korea or say Malaysia in the region. Let us ponder as to how find a solution to our misery only think tank of academics may put us on right course, before obituary is written. I have noted with heavy heart that attitude at top is "who cares" what you may say or write for the good of the country. It is incumbent to appoint right people for the right job. Let us learn from India and at least copy and paste their reforms or that of Malaysia, China or Korea. 

I conclude to say that we are at point of no return, thus all may club to take country towards progress by neutralising the feudal and clergy both. Pakistan is calling its sons/daughters to contribute. I, compliment government for setting land port authority establishing dry ports at Chaman, Torkham and Wagah, to be completed in 36 months, for promotion of trade through our 3 corridors, as advised by World Bank years back.