Govt shipping policy full of lapses, leading Maritime Expert claims

By Nasir Mahmood

The government has announced a new tax incentive policy for Pakistan-based shipping companies to lessen dependence on foreign vessels. Addition of more Pakistan-registered ships with involvement of private sector would help reduce freight cost by around $5 billion paid to the foreign shipping companies, Minister for Maritime Affairs Ali Zaidi told a press conference in Islamabad on Wednesday 18 September.

Flanked by Adviser to Prime Minister on Commerce Abdul Razak Dawood, and Secretary Rizwan Ahmed, Ali Zaidi said that new companies would be exempted from income and sales tax as well as customs duty till 2030. Pakistan flag carriers would be given berths on priority with payment of freight charges in Pakistani rupees instead of US dollars to minimise reliance on foreign vessels, he added. The minister said along with Pakistan National Shipping Corporation (PNSC), the new shipping companies would be given equal preference in lifting private sector cargo through a bidding process. Zaidi said PNSC would continue to be charged one dollar per gross register tonnage (GRT) while the new companies would have to pay $0.75.

He said the initiative would generate more employment opportunities for seafarers in the country. The minister said hydrocarbon cargoes imported by government organisations and state-controlled enterprises, including petrol, high sulphur furnace oil, low sulphur furnace oil, high-speed diesel, liquefied petroleum gas, crude oil and coal, would be imported on free-on-board (fob) basis through PNSC-owned vessels. Zaidi revealed that new government-to-government liquefied natural gas (LNG) import contracts would be negotiated on fob basis and shipments would be made through PNSC-owned or PNSC-chartered vessels.

Advisor Razzak Dawood said the shipping sector had been classified as a Strategic Industry, and the banks would assist businessmen to import ships. The shipping sector remained neglected for many decades after nationalization but under the dynamic leadership of Prime Minister Imran Khan, steps were being taken for its revival, he added.

Commenting on the above announcement of new policy, a Maritime expert, Muddassar A. Iqbal said, the Minister is absolutely correct about declaring Maritime as Strategic Industry, for which I was trying to convince PM, Imran Khan, and former Finance Minister, Asad Umar since 2013 till now. However, why did Ali Zaidi and his team missed all the below mentioned key points from a Strategic Ministry during his press conference? As they say during the trouble times, ‘Elephant in the room’, I call it “The Elephant in the Maritime Industry”, said Muddassar A. Iqbal, a Global leading Maritime Professional.

Muddassar Iqbal is having a bag full of Maritime Degrees and 06 Chartered/ Professional Licenses, like; M.Sc(UK), CEng(UK), CMarEng(UK), C.P Eng(Aust), P.Eng(Can), Mentor (APEGBC), APEC Engineer, IntPE(Aus), MIMarEST(UK), MIEAust(Aust), MAPEGBC(Can), and MPMI – Thought Leadership Inner Circle (USA). Replying to various queries Muddassar said, till today the newly introduced Maritime Policy was not available on MoMA website, for professionals to review and share their feedback to authorities.

Muddassar said; let’s get down to the points which should have been part of Maritime Policy Press Conference:

He never shared and claimed any tangible targets for Maritime Industry, as mentioned many times in the past and requested, numerously.

Ali Zaidi claimed to make Pakistan Number 01 Maritime Nation in a video released in December 2018 but without giving a time line, a plan, a pathway and moreover in the absence of policy, which surfaced now after 9-1/2 months and not available on MOMA website, as of now.

Minister claimed to eliminate corruption from Maritime Affairs and associated departments, without telling: How much corruption he figured out in past 5, 10, 15….years, from each department of his Ministry and who did it. Once again and most importantly, how Ali Zaidi is planning to do differently as compared to his predecessors and to ensure its recurrence?

Without releasing Maritime Policy to public at this moment, the Minister set up the stage for God knows which audience; who have presumably no clue about Maritime Industry like him, unfortunately. His verbally announced policy seems to be a reflection of a Bureaucratic and Businessman’s (Non Maritime) crafty work as usual. Minister did not bother to express that how his policy is different to past predecessors and what kind of economical impact it will make on the national spectrum.

The Minister is urging on businesses to register ships with Pakistani Flag State, without knowing that Pakistani Flag Administration has not updated its regulations since decades for Ship Registry and moreover, is it compliant with International Maritime Regulations and meets the required market standards? In short, there’s no plan identified within the policy to ensure that flag administration be equipped with top maritime professionals on merit. Not sure, why anyone will bother to buy the Minister’s words to set up shipping company in Pakistan?

Minister did not share any numbers for: How many ships MOMA is expecting to be registered with the announced incentives till 2030, year on year basis and how much business & revenue impact it will have in numbers, along with jobs for fresh graduates as well as experienced professionals?

Why to sustain PNSC’s first right of refusal for oil import and expect other companies will be established under this typical regressive policy? BTW, that First Right of Refusal is the main reason INDUSTRY did not grow at all and same time, it ensures PNSC remains a profitable entity without any competitor, which Mr. Minister claimed by almost beating his chest. It is exactly a reflection of pre-poll rigging within Maritime Industry, as they expressed for five long years in opposition. If, PNSC is the umbilical cord in this equation of energy supply then, why National Shipping company is on declined path since many decades and not a single Maritime Subject Matter Expert been appointed to lead since its inception, to meet national energy supply demands, saving those 4-5 billion dollars paid to foreign shipping companies on yearly basis?

Who prepared, reviewed and approved LNG Segment of Policy, is yet to be discovered? Do they have anything to do with LNG Business or have done any LNG Projects in life to understand the market trends and insights? How those 5 more LNG Terminals to be realized is yet another major segment which the Minister did not bother to shed light upon in detail. Having these 05 LNG Terminals in Port Qasim in addition to two previously functioning terminals, is more like not learning from Saudi Oil Refinery, recently was blown. This makes us vulnerable and with one blow in the shipping passage will choke the whole National Energy Requirements.

Minister forgot to add a share of National Shipping from CPEC? If, China is going to use Gawadar, what will be there for Maritime Industry? Some serious policy points with tangible numbers for Maritime Industry are expected from Ali Zaidi, unlike his previously claimed tea stalls and tire shops on a national TV program.

There was not a single comment about, how Ship Building to be Improved, what kind of technology to be introduced, which vessels to be dry docked/ serviced and how many commercial ships to be built on yearly basis.

There was no announcement made about bringing a legislative change to bridge Ship Breaking and Steel Mill. Although, PM’s special Adviser Razak Dawood was present in the Maritime Policy Announcement and part of Policy making, he is also playing a key role for revival of Steel Mill and unable to connect the dots, to make it profitable by connecting ship breaking and steel mill?

There’s no announcement about, how Fish Cage Farming in the Open Sea can add billions of US dollars in the National Earnings? No special zones defined, No Incentives for Businesses, Not a word about associated infrastructure for this segment?

Plenty of Oil Tanker Ships in the Persian Gulf suffered serious accidents (blasts) since last year, as informed to PTI leaders in the past and now, recent even of Saudi Oil Refinery blown up, making things vulnerable to global energy market. However, there are none alternate Oil and Gas Suppliers sourced out yet or in the pipeline, as claimed by Minister. MoMA seems to show no grave concerns towards this serious issue.

Which new Institution will be formed and old one to be reformed by Maritime Ministry, why and how, was left out of conference by Mr. Minister?

How will Ali Zaidi as Minister plan to increase the Employment of Seafarer (Approximately 65% Jobless/ Short Term Contracts, according to Pakistan’s First Maritime Analytics Project) to fulfill PM Khan’s dream of 10 Million jobs and mainly, what would be Ali Zaidi’s contribution towards his PTI leaders’ goals?

Minister forgot to say a word about reviewing and updating, Shipping Act, which is the backbone of Maritime Policy Making and a bottleneck in the growth of Maritime Industry?

The Minister was in tears on a National TV Program and left immediately to attend the victims at Rawalpindi, but forgot to introduce a Maritime Fire Code in his Policy Conference?

Do we have a National Regulatory Body for Maritime and Offshore Industry and why Pakistan is left out to have a Class Society? These were suggested through PM’s Citizenship Portal, earlier this year and my account was blocked after that, unfortunately.

We have ZERO Female Sailing Professionals in Maritime Industry because there is not a single Institution which can offer training to 52% population of country and Mr. Minister shared nothing about this issue? Can Ali Zaidi care to ask the question to all those who were appointed on decision making positions within MoMA and let the industry know, why we are left behind?

In the end, Muddassar challenged Ali Zaidi, as Minister of MoMA, to bring all his team (Chairmen of Institutions and his  selected Advisers, along with Board of Directors), to set up an open media debate on his Policy, at any given day and take up the questions from the Industry Experts (Stakeholders). In the absence of above strategic points, we all need to provide an anchor to drifting Ali Zaidi as MoMA flag bearer that, is he failed to prepare ‘Maritime Policy’ or prepared to fail? The Global leading Maritime Professional Muddassar A. Iqbal concluded.

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