The main reason of a defective Shipping Policy is attributed to massive corruption, inefficiency, mal-administration, misappropriations and embezzlements of huge funds in the shipping industry with particular reference to PNSC. Several complaints have been lodged with the Ombudsman of Pakistan, Prime Minister's Inspection Committee, Federal Ministry of Communications, Federal Anti-corruption Committee, Federal Investigation Agency, National Accountability Bureau and the entire details of our (Pakistan Merchant Navy Officers' Association-PMNOA) is presently lying with the Vigilance Directorate- set up by the President of Pakistan since the Director Economic Crime Wing-FIA has expressed his inability to finalise the Enquiry due to non-co-operative attitude of the PNSC stewardship to the people in the power corridors of Pakistan.
Hundreds of cases in connection with corruption etc, have been prepared and sent by the Vigilance Directorate to the President of Pakistan.
The PMNOA highly appreciate the excellent work of the Vigilance Directorate and wish to express our gratitude to the entire Vigilance team, notably to Brigadier Zafar Alam Malik, Director General and Colonel Javed for submission of an honest and unbiased report to the President of Pakistan but interestingly, quite recently both these officers have been retired.
We are encouraged to note that the President of Pakistan has time and again assured the nation that he believes "Pakistan First" but in the case of merchant marine it seems that the disciplined training of the Armed Forces has resulted towards inculcation of a spirit under the name and title of "Fellow Courtesy" which debars him from taking any action against the senior officers of Pakistan Navy.
Merchant Marine is a highly sophisticated technical subject. The recent changes and developments in ship design, technological advancements, cargo handling techniques and maritime legislation warrants that unless the affairs of merchant marine are entrusted to the trained, qualified, experienced, sincere and honest professionals of merchant marine it is well nigh impossible even to dream of any development and betterment at the hands of pseudo-professionals of Pakistan Navy, Pakistan Army and Police officers who are neither trained, nor qualified nor have any experience of commercial shipping.
Taking cognizance of our submissions the Governments of Pakistan had appointed local and foreign consultants; provided loan and subsidy to PNSC and had even made financial re-structuring of PNSC when the cumulative losses until December 1988 amounted to Rs 4019 Million.
The Consultants in their last report expressed categorically that the entire PNSC's fleet is aged and technically deficient.
On April 21, 2001, the present PNSC stewardship presented a summary before the Cabinet Committee on Ports and Shipping which was chaired by the then Chief Executive of Pakistan, General Pervez Musharraf. The performance of PNSC was unsatisfactory due to incorrect policies and corruption causing colossal losses.
Instead of taking corrective measures a decision was taken to award exclusive right of Affreightment of crude to refineries to PNSC-as being the only avenue left to salvage PNSC.
Consequently, the "First Right of Refusal" was given to PNSC. Later, a ten-year contract for Affreightment of crude to refineries was awarded to PNSC for the entire Affreightment of crude to refineries.
In July 2001, the Shipping Policy was announced that also awarded the "First Right of Refusal" to PNSC, alone.
Under the present Shipping Policy and Ordinance nobody considers investment in Shipping under Pakistan flag.
There has to be a level playing field and in the absence of which even if the Government of Pakistan may grant a number of so-called incentives other than providing a level playing field in its policies it is impossible to attract any investment in Shipping.
It is strongly recommended that the "First Right of Refusal" be given to all Pakistani flag vessels instead to PNSC alone either in the National Registry System or more preferably in the "Second Registry System" of Pakistan to ensure investment in shipping.
Great havocs have been played by the stewardship of PNSC. Foreign aged tankers were chartered by PNSC at exorbitant freight rates - almost over twice the then prevalent market rates. This extra burden of freight was cleverly passed on to the end users of petrol, diesel and kerosene - the price of which is seen continually increasing causing great unrest, chaos and anxiety amongst the people of Pakistan whose lives have been overburdened by enormous price hike of fuel and all other commodities of usable items.
The media is continually propagating that the price of crude has increased and is on an incline somewhere around US Dollar Fifty per barrel. The price so quoted is of WTI (West Texas Intermediate) and Brent Crude - both of this crude is "Sweet" crude oils;
Whereas none of our refineries are using these premium cost sweet crude oils, our refineries use "Arabian Heavy and Arabian Light" grades of crude which are termed as "Sour Crude" and are much cheaper than premium priced crude oils, however, high freight charged increase the C&F (cost and freight) value of crude which is the sole reason of exorbitant price of petrol, diesel and kerosene oil. The entire nation is thus continually paying money to keep PNSC afloat.
A representation was sent to the Ministry of Petroleum in this regard. The Ministry of Petroleum sent us a tardy reply wherein it expressed that as per directives of the Ministry of Communications crude freight was paid to PNSC.
Anyone can easily determine the real reason for the rise of petroleum prices.
Such a novel policy for development of shipping at the expenses of the entire nation is un-understandable.
In a meeting with the then Secretary to the Government at Islamabad; we explained to him that the PNSC stewardship had received an excess of some eighty two million US Dollars freight charges on crude alone whereas at the end of the year, PNSC had declared a marginal profit of some Rupees Forty Crores only. As to where the balance of this huge freight earned had vanished.
The Government of Pakistan took cognizance and later the President of Pakistan limited PNSC to charge AFRA+34WS (Average Freight Rate Adjustment plus some 33% more) from the refineries. In the following financial year PNSC declared a profit of over One Hundred and Seventy Crores even when lesser freight was charged. The question is as to why additional freight rate is allowed even today to PNSC.
We suggest that the "First Right of Refusal" be awarded to Pakistani flagships. A number of private entrepreneurs shall undoubtedly invest in shipping; then for national cargoes open tenders be invited. Competitive rates will be had and the lowest bidder be awarded the contract in an atmosphere of a level playing field. This will result in low freight cost; thus C&F value of crude will reduce and the end users of petroleum and its products shall be relieved of the present crushing price hike.
A brief mention of a few of the many lacunas present in the existing Merchant Marine Ordinance-2001 and Shipping Policy is enumerated as under with our recommendations to incorporate same in the amended/redrafted text in compliance with the directives of the Prime Minister of Pakistan in the larger interest of Pakistan and Merchant Marine:-
The stewards in the Ministry of Ports and Shipping have failed to frame the instruments and details of the provisions of the existing Ordinance and Policy. Removal of this lacuna without any further loss of time is imperative.
Failure to frame rules and regulations of the training, certification, appointment of officers in several merchant marine organisations and gross violation of the existing rules as notified in the Gazette of Pakistan.
Failure to include provisions for security for payment of wages, disability and death compensation and repatriation of Pakistani seafarers.
Inclusion of Section 96 reference Chapter 6 is detrimental to the interest of the professionals of merchant marine and this Section must totally be removed, however, if naval officers are desirous to join merchant marine and possess Certificate of Competency then they must undergo requisite training required prior to joining merchant marine and must complete the requisite sea service on board merchant ships in accordance with international maritime legislative provisions namely STCW 1995 which is also ratified by Pakistan.
Though it is a common practice to wield power in under developed and developing countries through back doors which is not our concern but as a professional technocrat of merchant marine we strongly protest against all such back door entries whereby pseudo-professionals may obtain Certificate of Competency as Master, Mates, Chief Engineers and Engineers.
We suggest to make necessary changes in the existing Ordinance and Policy instead of preparing a new Merchant Shipping Bill and Policy for presentation on the Floors of the National Assembly since it will cause long delays and our past national history categorically bears the testimony to the fact that as and when a Merchant Shipping Bill was prepared for presentation on the floors of National Assembly, the Assemblies were dissolved.
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