Pakistan should develop seaports for economic growth

According to a World Bank report of 2017, “Improving the competitiveness of South Asia’s container ports located in Bangladesh, India, Pakistan and Sri Lanka is critical to maintaining the trade growth in the region and fostering its fast economic growth.”

The most prominent, but the underutilised port in Pakistan, the Karachi Port handles only 1,600 ships during the whole year with 33 berths for dry and liquid cargo.

A detailed analysis of Logistics Performance Indicators (LPI) reveals that in comparison to other nations, the performance of Pakistan is quite depressing.

This is especially in the areas of

  • customs clearance
  • tracking and tracing of shipments
  • timeliness
  • infrastructure
  • ease of getting efficient international shipments and logistics competence in terms of ease of getting third party logistics (3PLs) services

Similarly, the overall LPI places the performance of Pakistan even lower than that of Bangladesh and Sri Lanka.

Pakistan’s major deep seaports such as Karachi Port, which accounts for around 60% of its marine shipments, Port Qasim 35% and Gwadar Port, which is currently being developed, can play an important role in reducing the country’s trade deficit if upgraded and secured.

The Gwadar Port offers the shortest route to warm waters from Central Asia, and is a gateway to the Persian Gulf at the Strait of Hormuz.

It also has tremendous potential to become a major transit port to facilitate global shipments of dry goods and the movement of oil and gas among regional areas including the Middle East, South Asia and Central Asia.

The maritime silk route initiative and China-Pakistan Economic Corridor (CPEC) also offer prospective economic uplift for Pakistan if Gwadar Port is utilised with its full potential.

Furthermore, in Gwadar, Pakistan with Chinese collaboration is developing a vocational centre, a 300-megawatt power plant, an international airport, and an expressway to link Gwadar Port with the rest of the country and its neighbours.

Recently, the Ministry of Maritime Affairs Pakistan announced that a German firm had expressed interest in investing US$40 million in Bin Qasim’s upgrade and the Economic Coordination Committee permitted the construction of LNG terminals at Port Qasim.

However, by only developing the long-awaited fundamental infrastructure is not enough.

In comparison to Singapore Port, Jebel Ali Port in Dubai, Salalah Port in Oman, the World Bank report indicates, the operational costs including tariffs and terminal handling charges at most big South Asian container ports are lower.

Yet, their indirect costs associated with delays and uncertainty had an immense effect on customer choices.

Therefore, the government of Pakistan needs to focus on providing smart solutions to all its seaports in terms of

  • improving and monitoring port infrastructure
  • optimising cargo handling
  • automating customs clearance
  • encouraging intermodal transportation services
  • improving port and cargo safety
  • adopting eco-friendly initiatives to reduce the use of energy and avoid costly oil spills

Credit: The Express Tribune

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