PAKISTAN: Private money pours into containers

22 August 1997
SPECIAL REPORT SHIPPING

ON 10 August the container ship Sea Pearl sailed into Qasim International Container Terminal (QICT). Operated by Maersk and Sealand, the Sea Pearl was the first ship to dock at Pakistan's only dedicated container terminal. It's a distinction that Port Qasim will not retain for long as a new container at Karachi is due to begin operations in mid-1998. Together, the two new terminals will open a new chapter for Pakistan's ports.

'We want to prepare for times to come,' says Port Qasim Authority (PQA) chairman Muhammad Kaleem. 'Especially for transhipment for Central Asia.' Geographically, Pakistan is well-placed to become a gateway to the land- locked countries of central Asia. But if the two ports are to take advantage of their location they need to be able to handle larger, more modern ships with much faster turnaround times.

The port authorities have enlisted the help of the private sector to make this possible and private investors are playing a pivotal role in the upgrading of port facilities. QICT and Karachi International Container Terminal (KICT) are both privately-financed, built and operated.

'Investors are aware that Pakistan has a strategic position for Asia,' says KICT's chief financial officer, Khurram Abbas. 'The decision to come into Karachi is both a short-term and a long-term one.'

For the moment Port Qasim has a distinct advantage over Karachi, simply by having its container terminal already in operation. QICT, a joint venture of the P&O Group, the Commonwealth Development Corporation and Pakistan Kuwait Investments, has invested $80 million in a terminal capable of handling 200,000 20-foot equivalent units (TEUs) a year. Ship-to-shore gantry cranes can handle ships of up to 3,200 TEUs.

Ships calling at Karachi at the moment need to have their own cargo lifting capacity or else rely on older mobile cranes on the quayside for loading and unloading. When KICT becomes operational it will have three gantry cranes, to be supplied by Noell Preussag and an annual capacity of 300,000 TEUs in its initial phase.

Port Qasim also has the advantage of a huge wharfage area of 240,000 square metres. This means that there is no shortage of space in the immediate vicinity of the port for the storage of containers. Container movements within the new terminal are fully computerised. Karachi, by contrast, is already finding that its storage areas are filled to capacity.

One proposal for remedying Karachi's space problem is to build a remote container freight station connected to the main port by rail. Karachi's Port Trust (KPT) says that this will free up more space in the immediate port area, and ultimately speed up operations. It is expected that the project will be offered to the private sector, with bids for prequalification to be invited before the end of the year.

Automated systems will also boost efficiency at KICT. 'New technology will track containers, minimising the need for lifts and moves and reducing time,' says Abbas.

For the shipping lines, time is the crucial factor and Port Qasim's new terminal can offer a much faster service. 'We can turn around a 2,800- TEU ship in 48 hours,' says Captain Muzaffar, marketing manager at QICT. Until KICT starts operations a similar size ship would expect to be in Karachi for four-five days.

The Europe Pakistan India Consortium has been quick to take advantage of Qasim's new capabilities, announcing in July that it would switch its Karachi services to QICT. The consortium includes P&O Nedlloyd, CMBT and Contship and recently signed up Andrew Weir and CMA as new members. This has led to the introduction of 2,900-TEU ships without on-board gear, offering a more frequent service.

'We now have bigger ships on a tighter schedule,' says P&O Nedlloyd general manager for the region, David Charlesworth. 'We need to turn around faster and we need a guarantee that there will be no congestion.'

The potential for traffic growth at Pakistan's ports means that the two terminals are unlikely to be in direct competition. As more of Pakistan's cargo is containerised, there is room for both ports and QICT and KICT already have plans for future expansion. QICT intends to install a further two cranes by the end of 1998 raising capacity to 350,000 TEUs. KICT will wait until it is running at its full capacity of 300,000 TEUs before adding a fourth crane.

Private investors are to be given further opportunities at Pakistan's ports as KPT plans a third container terminal. The authority has already appointed Turkey's STFA to carry out reconstruction work on berths 3-10 and the quay wall. Later KPT will offer berths 6-9 to the private sector to develop a new terminal.

At 13.5 metres, the berths will be deeper than the existing ones in the port and be able to take ships of up to 2,800 TEUs. A private developer will install Panamax gantry cranes, paving, offices and other facilities. The port authority will receive money for the lease of the land and a royalty on the containers handled. It is expected that developers will be invited to prequalify for the project before the end of the year.

Port Qasim Authority is focusing its efforts on dedicated industrial terminals. It has invited the private sector to develop cement, liquid cargo, liquefied petroleum gas and grain and fertiliser projects. Both ports are placing a high priority on development, and in Pakistan's current financial condition this means that attracting the private sector is the only way forward.

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