KARACHI: Coal importers from the private sector have sought government’s permission to use Pakistan Steel Mills’ (PSM) idle jetty, cargo conveyor belt and other equipment until the Pakistan International Bulk Terminal becomes operational.

In communications with the ministries of industries and production and ports and shipping, the importers explained that a permission would help bring down the cost of imported coal by $4 a tonne and, therefore, ultimately benefit the PSM which would be earning more than Rs100 million a month.

They believe that this would help meet growing demand for coal, mainly from cement and textile companies and steel re-rolling mills.

Say this will help the steel mill earn Rs100m a month

Moreover, coal consumption would rise significantly when coal-fired power plants will become operational in the near future, and both Karachi and Qasim ports could face congestion.

M. Younus Vayani, a shipping agent, charterer and operator, told Dawn that coal was being imported and handled at Karachi Port until about two years ago when the Sindh High Court (SHC) restricted its storage level at the Keamari Groyne because it was polluting the surrounding area.

The court restricted the volume to only 200,000 tonnes against the storage capacity of around one million tonnes, he added.

As a result, importers could no longer import coal in larger vessels having a capacity of 60,000 tonnes as they needed a draft of around 13 metres which is only available in Karachi Port’s berths.

However, in order to meet the economies of scale coal importers found a way out and kept importing coal in larger vessels having 13-metre draft.

But this lengthened the unloading process as vessels initially unloaded 30 per cent of the coal at Karachi Port and later reported at Port Qasim where draft is around 10.5 metres, he said. The use of two ports raised the handing cost of vessels and port charges also doubled, he added.

Citing an example, he said the biggest coal importer currently imports around 250,000 million tonnes a month, which means four to five vessels with a load of 60,000 tonnes each have to call on both the ports.

The PSM coal jetty has a 13-metre draft and is lying idle because the steel mill is not functioning. If a coal importer pays service charges at the rate of $4 a tonne against the use of jetty, the steel mill will alone earn around $1m (around Rs100m) on handling of 250,000 tonnes of coal.

“This amount will enable the PSM to at least meet the monthly salary bill of its workers who have not been paid for the last several months,” he maintained.

Published in Dawn, September 7th, 2016