The global trends in the shipping industry have drastically changed with containerized cargo shipments taking over the bulk cargos. From cost effectiveness of shipment to increased convenience coupled with the high level of security, the growth in containerized cargo at the Karachi Port has been substantial from 1,590,000 TEUs in the fiscal year 2013-14 to 1,720,000 TEUS in 2014-15. This is an 8.4 percent growth compared to bulk cargo that experienced 5 percent growth from 41,350,000 tons during 2013-14 to 43,420,000 tons in 2014-15.
This consistent growth in containerized cargo is evident across the globe, depicting the need for increasing containerization in Pakistan. Not only this, new and more advanced mother vessels have been in place, which can greatly be associated with economies of scale, given the conditions for the vessels to be entertained on the ports of Pakistan.
Currently, the 3 container port capacities of the country are accommodative of Post Panamax and Post Panamax Plus vessels (capacity of 4,000 to 8,000TEUs of containerized cargo). Larger vessels cannotbe handled at the current terminals due to limitations of available infrastructure and depth. This is the very reason for increased time and costs of transportation for the traders since the cargo from the larger vessels is unloaded, and reloaded to Post Panamax vessels at nearby ports before arriving in Pakistan(also known as transshipment). It is obvious that containerization is the future of sea trade which leaves the need for Pakistan to adapt to the growing needs of containerized ships to be able to benefit from advancement and cost effectiveness. Larger container ships berthing at Pakistani ports could result in lower costs to the end users resulting in economic and handling efficiencies to trade in Pakistan.
The idea is not so far-fetched with the developmental plans of container ports underway. The first Deep Sea Container Terminal, also known as South Asia Pakistan Terminals(SAPT) is a public private partnership between Hong Kong based Hutchison Port Holdings and Karachi Port Trust. The new terminal will definitely prove to be a game changer for containerized cargo trade, with the ability to accommodate the largest vessels afloat today, the New Panamax Plus and Post New Panamax (Triple E) vessels with a capacity of 15,000 to 19,000TEUs of containerized cargo. This will be made possible due to a depth of 16.5 meters alongside, together with the ideal location for berthing mother vessels.
Sources in KPT have said that the currently operating container terminals in Pakistan, namely KICT, PICT and QICT, have inherent limitations due to which they are not suited to handle container vessels of sized exceeding 10,000 TEUs. The cost of removing the said limitations would be significantly higher than the expected benefits. Therefore, it was deemed necessary by the Government of Pakistan to invest in an all new terminal at SAPT that is a Greenfield project designed to handle the largest container vessels afloat today. This is KPT’s premier project and is expected to be inaugurated before the end of 2016.
Karachi Port has invested over US$350 million for creating land area for the terminal while SAPTshall be investing US$600 million in the technology and development of the container terminal. The terminal is equipped with the latest technology from Hybrid RTGCs and Remote Controlled Cranes (RCCs) to examination facility equipped with automated gates with identity cards, CCTV systems, proper illumination and fully automated operations unlike never before in Pakistan. The Operations Control Centre is equipped with the latest nGen TOS System, EDI exchange with shipping lines, EDI exchange with Customs (Weboc) and Electronic Delivery Order allowing shipping lines to pass consignment release info directly.
The port will not only be fruitful in terms of operations, but also convenient for traders with a web based payment system that will not only ensure security but also ensure that traders’ physical presence is not necessary for payments to be made. This can also facilitate importers and exporters of the Central Asian landlocked countries to use the Deep Water Container Terminal which will prove immensely beneficial for the economy.
The SAPT terminal is said to have been designed to be environmentally friendly with a low carbon footprint matching some of the advanced terminals globally due to the increased awareness of this issue amongst shipping lines. From generating their own electricity through solar power and captive power plant to sustainable production technology such as hybrid cranes will ensure effective fossil fuel consumption with minimal opportunity cost. Furthermore, a reverse osmosis filtration system will ensure in house supply of portable water. All of the above will be complemented by a Regenerative Power Absorption System increasing electrical power utilization.
The terminal was previously expected to be ready for operations and inauguration by June 2016. However, the inauguration could not take place due to a number of pending issues. This include availability of access road and rail links from the container terminal to the upcountry for the cargo to be transported to and from the terminal. Sources within KPT have confirmed that dredging of access channel could also not be completed within time and KPT is in the process of awarding a new dredging contract to a foreign firm.These sources have also indicated that the Karachi Dock Labor Board is demanding a share in the revenues of the SAPT terminal and that this matter is complex and could go to court resulting in further delays.
The impediments mentioned above have put a question mark on the million dollar investment project. Such delays and impediments have become characteristics of several major projects in Pakistan and it concerns still remain to see remains to be seen if KPT and the Ministry of Ports and Shipping will be able to remove the concerns of the foreign investors to ensure the success of this project.