June 22, 2008	Sunday	Jamadi-us-Sani 17, 1429

KARACHI, June 21: The budget proposal for 2008-09 to allow duty-free import of dredgers has created a lot of confusion among maritime circles.

The experts believe that the proposal has either been made to give equal benefits to foreign companies who had been importing dredgers on payment of duty to execute their local projects or there is some serious slippage because import of dredgers under Pakistan flag is already exempted from customs duty.

It is feared if the government intention is to allow duty-free import of foreign dredgers it would damage the nascent dredging industry which has brought investment under Pakistan flag, both in public and private sector.

Capt Anwar Shah, former Director-General, Ports and Shipping Ministry, said, “It was intriguing to note that finance minister in his budget speech stated that in maritime sector dredger import would be duty free, whereas the same is already exempted from customs duty vide SRO 457(1)/2004, dated June 12, 2004, S No.95 exempting ships, tugs, dredgers etc., under Pak flag up to year 2020.”

He further said that it appears to be a bureaucratic gimmickry to reflect that maritime sector has been also focused and addressed in the budget whereas the factual position is it has created a lot of confusion which needs to be clarified at the earliest.

Capt Rasheed Abro told Dawn that the dredging industry needs to be protected from foreign giants who monopolise in this industry. He said the KPT and private sector have invested heavily to the tune of $50 million and Pakistani human resource has been trained abroad to undertake dredging of harbours, etc.

He further said that local dredging industry is growing well under Pakistan flag and it is an excellent example of public and private sector competing on level plying field with no preferences.

Mr Abro said that Port Qasim annually pays Rs1 billion to a foreign dredging company for removal of five cubic metre silt to maintain 11 metre draft. But once the PQ approach channel is to be dredged to 14 metre as per the demand of terminal operator, a cost of $140 million would be incurred for removal of 10 million cubic metre silt. Thereafter, he said annual maintenance cost of Rs3 billion for dredging would have to be footed.

Capt Anwar Shah said the KPT has been awarded work to dredge Pasni fish harbour so the users are not only ports but big institutions, like KESC, Pakistan Navy, refineries and DHA, etc., and a lot of foreign exchange is saved by using local dredging facilities which are growing at a fast pace.

The former DG Ports and Shipping said the government must support the nascent dredging industry under Pakistan flag, be it public or private sector, and in all tenders, provision be made to pay 15 per cent extra on tender rate to locally registered companies as an incentive.

This incentive, he said is given by many countries to their national flag.

He apprehended that with growing quantum of dredging in the country, the annual cost may exceed Rs10 billion, when all users, including KPT, were undertaking their own dredging.

Anwar Shah suggested that the government should also give similar incentives to tugs flying Pakistan flag and hiring of tugs of foreign flags be discouraged to build our own fleet of dredgers and tugs which would save huge foreign exchange and also generate employment to local manpower.

Both maritime experts demanded of the government to remove the finance bill anomaly at the earliest so that dredging industry under Pakistan flag could get a safe environment to grow and also save the country from spending huge foreign exchange.