KARACHI, Nov 26: The War Risk Committee of Lloyds, which had reached an understanding with Pakistan’s High Commission to UK two weeks back to reduce War Risk Premium (WRP) rates by 75 per cent, is now reluctant to issue a written advice to underwriters or reinsurers, official sources said.

As a result, the country’s $20 billion external trade continues to suffer due to heavy burden of war risk premium (WRP). And the government is also not pro-active on the issue.

To quote the chairman, Export Promotion Bureau (EPB), “Pakistan’s High Commission to UK Qadir Jaffer had reached an understanding with the War Risk Committee of Lloyds for bringing down the WRP rates from 0.25 per cent to 0.05 per cent.”

However, after that no progress has been made and the foreign shipping lines and their local agents continue to charge WRP at previous rates. They say that as long as written advice for reduction in WRP is not received by them from underwriters or reinsurers who imposed the surcharge on Oct 1, 2001, on hulls of ships calling Pakistani ports, they cannot reduce their charges.

Official sources told Dawn that Pakistan’s High Commission to UK is still trying to convince the War Risk Committee of Lloyds to issue written directives to underwriters about the reduction in surcharge.

The Lloyds Committee now seems to be reluctant to issue written directive to underwriters and reinsurers, the sources said.

The Committee took no time in removing Pakistan’s name from ‘exclusion list’, and imposed the WRP even much before the US and allied forces bombing began on Oct 7, 2001, on Afghanistan, but now they were taking all the time to put it back or even reduce the WRP as agreed upon, exporters said.

As a result of this the underwriters or reinsurers imposed WRP on hulls of ships calling at Pakistani ports. Consequently the shipping lines began to recover war risk premium (WRP) between $100 to $200 per TEU or $4 to $5 per ton from exporters from Oct 1, 2001.

After ousting Taliban from Kabul, the US air strikes against militia have substantially subsided but the underwriters and insurance companies as well as shipping lines continue to charge WRP as usual, which is crippling country’s exports, they said.

The chairman, Pakistan Bedware Exporters Association (PBEA), Shabir Ahmed said, “our products in the world market have become uncompetitive due to WRP and other negative factors which emerged after Sept 11 attacks in the US.”

He said the insurance was the subject of Ministry of Commerce and shipping and ports of Ministry of Communications, but both the ministries seemed to be least interested in sorting out the issue, which was of great importance to export trade.

“At present, the WRP is the biggest issue confronting export trade and if anyone feels our products under such a high surcharge would stay competitive in the world market, he is totally mistaken,” he added.