A view of coal yard at pibt. The high fee for coal handling is feared to affect exports as it will directly impact the cost of doing business.
A view of coal yard at pibt. The high fee for coal handling is feared to affect exports as it will directly impact the cost of doing business.

KARACHI: Port charges for handling coal shipments have gone up by more than 40 per cent after the Supreme Court banned its unloading at six berths operated by the Karachi Port Trust (KPT), according to coal importers.

In view of citizens’ concerns about pollution, the apex court decided in June that all coal-carrying ships should be unloaded only at Pakistan International Bulk Terminal (PIBT), which is a purpose-built dirty cargo terminal at Port Qasim.

The court also directed PIBT to handle shipments “at the same rate which is being presently charged” in its June 20 decision.

40pc hike due to court order to use only Port Qasim terminal for coal

“The PIBT rate before the court order was Rs600 per tonne. It is now charging Rs850 plus miscellaneous charges per tonne,” according to a trader who claims to have a 20pc share in the country’s total coal imports.

He requested that his identity be withheld, fearing that PIBT would further inflate rates for his consignments for publicly raising this issue.

Two other major coal importers that Dawn spoke to also confirmed that PIBT increased its charges after the court order turned it into the country’s sole handler of dirty cargo in June.

Pakistan is expected to import 12 million tonnes of coal in 2018-19, more than double the country’s consumption from a few years ago.

In addition to power plants and cement factories, major consumers of imported coal include export-oriented industries. For example, big textile mills generate heat by burning coal instead of diesel to save money.

“As commercial importers, we will pass on the effect of the rate increase. This will only hurt the industry and its competitiveness,” the importer said.

Built at a cost of $315m, PIBT started commercial operations at the beginning of the last fiscal year. But it struggled to attract cargo vessels as it charged substantially more than KPT because of its advanced systems and machinery. It handled only 1.4m tonnes of coal in July-March, the latest period for which official figures are available, against its 12m-tonne annual capacity. The company posted a net loss of Rs3.5 billion for the nine-month period.

But the court-imposed ban is going to bring good fortune to PIBT. Almost 8m tonnes of cargo, which would otherwise be handled at KPT’s six berths, will now be unloaded at PIBT this year. The bulk terminal has two berths, although it can unload only one ship at a time.

There are three other coal-handling berths at Port Qasim, but they have been reserved for coal-based power plants after the only dirty cargo terminal became fully operational last year.

Responding to the allegations, a spokesperson for PIBT said the company has increased some of its fees by up to 15pc “on account of fuel adjustment charges”. Up to 40pc of terminal costs are linked to running diesel-powered machines, he said.

Terminal handling charges remain at the same level, he said, insisting that additional fees are related to heads like MIS reporting, cargo sprinkling, fire-fighting, loading and trucking.

Importers have requested Minister for Maritime Affairs Ali Zaidi to intervene. Speaking to Dawn, Mr Zaidi said he would soon call a meeting of stakeholders to decide the future course of action.

Published in Dawn, October 4th, 2018