Abstract
Syed Naveed Qamar, Pakistan' s Federal Minister of Ports and Shipping, stated
in October 2008 that the
problem of congestion at the country' s ports,
which was hampering their operations and causing delays
for the shipping
and the import and export communities, would be resolved by November. The
main
reason for this would be the utilisation of Gwadar Port to take some
of the strain. The News International,
Pakistan' s English language
newspaper, reported that 17 ships were waiting to enter the Port of Qasim
and that vessels were also queuing to get into Karachi Port on October 17
2008. The newspaper reported
that at least six of these vessels would have
to pay demurrages (when the charter remains in possession of
a ship after
it should have been returned to the ship-owner) as they had been forced to
wait outside the
ports. BMI feared that the congestion could damage the
reputation of Pakistan' s ports in the eyes of the
shipping community, but
we were encouraged to hear that the government had a strategy to solve the
problem. The Daily Times Pakistan quoted Qamar as stating that the congestion
was due to a shortage of
berths at ports to unload general cargo. This had
been caused by increases in the import of wheat - the
Pakistani government
was to import 2.5mn tonnes of the crop in 2008, fertiliser, of which Pakistan
was
experiencing a shortage, and cement. On top of this, Pakistan had a
huge crop of rice that needed to be
exported, which had served to
exacerbate the problems for the nation' s ports. To solve the problem
Pakistan planned to use the country' s newest port. Gwadar Port came into
operation in 2008, and was
developed to be a major delivery point for the
country' s grain. It was already operational, having received
its first
grain shipment, from Canada, earlier in 2008. To avoid congestion in future,
Qamar announced
plans to divert future consignments of wheat to Gwadar.
BMI believes that Gwadar Port will play a vital
role in Pakistan' s
maritime sector and has come online at a vital point as the country' s maritime
transport
figures were increasing. In our newly-released Pakistan Freight
Transport Report 2009, BMI concludes
that with greater capacity somewhat
offset by the developing downturn in the global shipping cycle,
Pakistani
shipping freight carried will grow by an annual average of 4.3% over the next
five years.
The interplay of various factors, both positive and negative,
underpin this forecast. Among the positives
are Pakistan’s expected
rate of GDP expansion (an annual average of 4.7% is predicted for
2009-2013)
and rising energy needs, particularly for gas. Also important
are the country’s strategic location (between
China and the energy
sources of Iran and the Middle East), and the fact that important new
projects, such
as the US$7bn Iran-Pakistan-India (IPI) gas pipeline, are
in a relatively advanced state of planning.
Among the negatives are the
global economic downturn, domestic political unrest and uncertainty,
freight
congestion, under-investment and a poor operating environment.
Opposition from the US, tensions with
India and disagreements with Iran
over gas prices could hold up the IPI project.
Looking at the freight
industry across all modes, our forecast assumes that the country’s ports
–
susceptible to bottlenecks and infrastructural delays – will
be able to cope with increased demand after
the breather that the global
slowdown is providing. On the land transport side, we expect that the
market
share attributed to the railways is likely to diminish, as there is
no evidence of major investment in
Pakistan Railway (such as network
extensions). If it is to regain a share of around 4% of the overall
transport sector, the rail network will need to be rehabilitated and
maintained at a higher level than at
present. Despite a general government
pledge to look at privatisation of the rail sector, BMI does not
foresee
significant progress along this route in the early part of the forecast
period. Road transport will
remain the largest sector, accounting for
approximately 85% of all freight movements by the end of the
forecast
period. Taking all these factors into account, our forecast for growth in
freight carried across all
modes, in million tonne-kilometres (mntkm),
stands at an annual average of 5.7% during the 2009-2013
period.
Pakistan’s business environment reflects an economy that has been
expanding strongly, developing closer
ties with neighbouring India and
opening up additional routes for the flow of people and goods, and a
global economy, which had been experiencing a prolonged upswing. At the same
time, Pakistan is a highrisk
environment, with weak transport
infrastructure attempting to support the requirements of a
population that
is still largely rural. Previous lack of investment in the transport system
has left much
infrastructure in need of repair and accidents are
relatively common. Pakistan scores below average for
the Asia and Pacific
region. It scores well in terms of broad economic factors, its actual and
forecast
growth rate for foreign trade and its forecast growth in freight
transport through to 2013. According to our
latest estimates, the total
value of transport and communications will rise to US$40.7bn in nominal
terms
by 2013, representing 13.2% of Pakistan’s GDP.
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