ISLAMABAD: The inordinate delay in clearance of coal vessels by the private handling terminals is inflicting financial loss of $25,000 per vessel per day.
In letters written to Maritime Affairs Minister Ali Zaidi, it has been revealed that current coal vessel lineup is estimated to be around $47,000,000 as demurrage to importers.
Coal is an essential raw material for several industries including cement and its high cost in the global market in addition to already high vessel hire charter rate presents a huge challenge for industries to overcome.
Currently, the single berth of only coal handling terminal with its limited capacity is unable to timely manage the discharge of coal vessels, which is not only causing congestion and delay of up to 20 days but unjustifiably increasing the cost of doing business for industries as they have to pay hundreds of thousands of dollars as demurrage.
According to the letters attached, vessel lineup and estimated demurrage being paid by the industries due to the inefficiency and monopoly of the private and only coal terminal, is further adding pressure on industries and hindering the industrial momentum of the country.
Considering the grave impact of prevalent situation, APCMA, being a leading tax contributor of the country has sought intervention of Minister for Maritime Affairs.
According to the documents received coal importers are facing delays of up to 10 to 20 days in discharging of their vessels. This delay is causing estimated demurrage of $25,000 per day for each vessel waiting to discharge.
The minister has been requested to extend support to curtail the damage being incurred by the industries due to the inefficiency of the private and only coal terminal.
The minister has been informed that price of coal and vessel hire charter rate are already high in the global market and due to the current coal handling situation cement makers/ coal importers have to pay a very high amount in dollars.
According to the data received from another source, the demurrage paid only from July 2020 to May 2021 stands at $7,470,000 dollars.
The minister has been requested to take measures for availability of multiple berths for coal handling and by ensuring accessibility at KPT for coal handling (subject to cabinet’s approval) after taking required environment precautions and fulfilling regulations, in order to provide relief to industries and control inflation in the country.
Copyright Business Recorder, 2021