KARACHI: South Asia Pakistan Terminals Limited (SAPT), a joint public-private investment project worth $1.3 billion, has been delayed almost two years as the Karachi Port Trust (KPT) failed to invest its $800 million portion to connect this Port with Gulbai Bridge through Road and deepening of this port.
SAPT, which is a subsidiary of Hutchinson Port Holdings Limited (HPH), Hong Kong, has completed its work at port and imported five latest sophisticated Cranes to handle big containers. The SAPT is also working, along with Pakistan Customs, to improve systems and procedures to enable easier and faster cargo clearance thus benefiting the end users.
This Terminal could more than double the country’s entire handling capacity, the source said. The KPT signed this agreement with SAPT in 2010 but could not initiate projects of road construction and deepening the sea. However, on the pressure of the higher authorities, the KPT has started dredging of the sea and completed only 55 per cent but the road construction work of 1.4 kilometers could not be started till now.
Heavy vehicles laden with tonnes of cargo will start moving in and out of the terminal, thus increasing the area’s traffic burden manifold. The dilapidated road is not the only problem facing this multi-million dollar project, the dredging of the water channel (waterway) that ships follow en-route to the port has yet to be completed.
Dredging is the process of removing sediments and debris from the bottom of sea to avoid risk of grounding for big ships that need a minimum depth of 15 meters to stay afloat.
The incomplete road and sea infrastructure has been a cause of great concern for the investors who don’t want further delays to the project, which was supposed to be operational in 2010, industry sources say.
“The company has paid $100 million in advance rent and Rs 2 billion Customs duties alone for five ship-to-shore (STS) cranes, which haven’t earned them a penny yet,” an official said expressing his frustration over the delay.
Spread over 85 hectares, the terminal is designed to accommodate Super Post Panamax ships, large vessels having a capacity of up to 20,000 Twenty-Foot Equivalent Units (TEUs), an industry standard to measure a ship’s cargo carrying capacity. Placed on the mouth of Karachi Harbor, it has a depth of 16 meters and provides the most convenient access to mother ships entering Karachi.
KPT officials claimed that the delay was due to some technical approvals that had to be sought from various government departments. “KPT has to follow all government rules and regulations.”
South Asia Pakistan Terminals Limited is the country’s first deepwater container terminal situated at the Keamari Groyne basin providing the most convenient access to mother ships entering Karachi. It has a total quay length of 1,500 meters divided into 4 berths of 375 meters each, a total yard area of approximately 85 hectares, and a depth of 16 meters to meet the growing shipping needs of Pakistan. Based upon commercial requirements, there is a provision of further deepening the channel to 18 meters in future.
The addition of this facility at the Karachi Port will place Pakistan amongst the few countries having a deepwater container port. The new facility is scheduled to commence commercial operational in 2016 and will employ some of the latest technologies available in the world today.
With the addition of this terminal, Pakistan will be able to accommodate deep draft container ships which previously could not operate at this port. These benefits include reduced costs to the country’s importers and exporters, reduction in transit time for shipments leading to efficiencies in supply chains and the creation of direct and indirect employment opportunities. The taxation benefits to the local economy have already started to accrue and are envisioned to grow as the traffic for the terminal grows swiftly in the next couple of years.
As of December 2015, SAPT has already received delivery of 4 Ship to Shore (STS) Cranes and 6 hybrid Rubber Tire Gantry Cranes (hRTGCs). In January 2016 a further delivery is expected of 1 STS and 9 hRTGC cranes. After this second consignment SAPT will have total of 5 STS cranes and 15 RTGCs with more equipment to be added in the course of time. The major equipment committed for the first two phases includes 8 STS cranes, 33 RTGCs and an array of terminal tractors, trailers, reach stackers, fork lifters, etc.
Significant investment is also being made in information technology related hardware and software akin to that being used at some of the most productive terminals globally. The investments array is woven together with SAPT’s human capital development initiative which is focused on furthering the knowledge base and operational skills of locally available resources.
According to industry sources, SAPT has a lot of significance when it comes to meeting the growing shipping needs of Pakistan. This can be an early harvest project from China Pakistan Economic Corridor (CPEC) point of view because Gawadar Port, which lacks supporting infrastructure – power, storage, roads, railways etc – will take a while to fully develop, they say.
Explaining, the official said the royalty from other terminals is $13 per TEU but the starting royalty for this project is $28 per TEU. Secondly, Pakistan’s full capacity is 2.5 million TEUs per year, handled by Karachi International Container Terminal (also an HPH subsidiary), Qasim International Container Terminal and Pakistan International Container Terminal. On the other hand, SAPT alone can manage 3.1 million TEUs. He said that if the project had been completed in 2010, it could earn the government millions of dollars in royalty, he said.