Country hasn’t registered any private ship, shipping firm since 2001: PNSC chief

ISLAMABAD: Owing to a non-favourable shipping policy for the investors, Pakistan has failed to register any new ship and shipping company from the private sector since 2001.

This was revealed by the Pakistan National Shipping Cooperation (PNSC) Chairman, Rizwan Ahmed, while briefing the Senate Standing Committee on Maritime Affairs which met under the chairpersonship of Senator Rubina Khalid.

The agenda of the meeting was to discuss the Pakistan Merchant Marine Policy, 2001, and the amendments made therein in 2019, and to review the budgetary allocation and its utilisation by the Ministry of Maritime Affairs and its attached departments, during the Financial Year 2021-22.

The committee members expressed grave concern on the non-registration of new ships or companies during the past 21 years.

Briefing the panel, the PNSC chairman said that no company or ship has been registered in Pakistan except Pakistan National Shipping Cooperation (PNSC) ships because of the wavering policies.

“Due to changes and inconsistency in policies in terms of tax exemptions, incentives and tax regimes the investor has lost its confidence” the PNSC chairman added.

The committee examined a detailed comparison of the global practices in terms of preferences and incentives. The PNSC chairman opined had the policies became constant and competitive like in other parts of the world it would have encouraged the investors to invest in Pakistan’s maritime market.

The Maritime Affairs Secretary, Mathar Niaz Rana, said that to resolve the issue of inconsistency in policy and compatibility to that of the global market a revised policy may be devised in relation to the current incentives and feasibility in terms of the country’s capacity. The committee sought a brief on the revised policy within a fortnight.

While reviewing the budgetary allocation and expenditure for the Financial Year 2021-22 and its utilisation by the Ministry of Maritime Affairs, the committee sought details on the expenditure made and revenue generated by the departments. The committee also demanded details of the developing budget on Port Qasim and Karachi Port Trust (KPT) and other departments.

The committee also sought details on the procurement policy of PNSC. The PNSC chairman informed the committee that on the procurement of new ship a wait-and-see policy is being applied globally since IMO ship regime will change in 2025 and again by 2030.

The committee raised question as to why an old ship is being purchased in comparison to a new one. The ministry informed that there is a financial dynamic behind procuring an old ship instead of a new one and proposed to present a brief on it in the next meeting. The chairman PSNC also informed the committee that the cost of an old ship is US 21 million dollars and of a new one is around U 55 to 60 million dollars.

While briefing the committee on the Merchant Marine Policy, 2001 the committee was informed that the target of the policy was to expand and update Pakistan Flag merchant marine fleet from five percent to 40 percent.

The committee was informed that no preference will be given to the PNSC in private sector cargoes. The committee was also informed that an amendment in the policy 2019 also includes that no federal direct and indirect taxes shall be levied to the detriment of Pakistan resident ship owing companies during the exemption period and the Pakistan flag vessels to be provided priority berthing at all Pakistan ports.

The committee expressed its satisfaction on the budget utilisation by the Ministry of Maritime Affairs and asked for further details to be discussed in future meetings.

Copyright Business Recorder, 2022