Bulk terminal willing to increase capacity by 40pc

Published September 11, 2021
The country’s only dirty cargo terminal is willing to increase its coal-handling capacity by more than 40 per cent at a “marginal cost” of up to $70 million. — AFP/File
The country’s only dirty cargo terminal is willing to increase its coal-handling capacity by more than 40 per cent at a “marginal cost” of up to $70 million. — AFP/File

KARACHI: The country’s only dirty cargo terminal is willing to increase its coal-handling capacity by more than 40 per cent at a “marginal cost” of up to $70 million over a period of two to three years.

Speaking to a select group of journalists on Thursday, Pakistan International Bulk Terminal (PIBT) CFO Arslan Iftikhar Khan said that adding the second conveyor belt for coal will increase the terminal’s capacity to 17m tonnes per annum from the existing 12m tonnes.

“We’d like to increase our capacity. We have the capability to expand the existing infrastructure to a level that will be sufficient to handle rising coal demand for the next five years,” said the CFO of the mechanised bulk cargo-handling terminal built at Port Qasim on the Build, Operate and Transfer (BOT) basis.

The cement industry is planning to expand its production capacity from 70m tonnes a year to 100m tonnes, which will significantly increase the demand for coal imports in coming years.

Coal imports via PIBT hit a peak of 10.1m tonnes last year. Separately, three coal-based power plants import up to 12m tonnes a year collectively through their own jetties.

The terminal has been handling all vessels carrying coal meant for cement plants since June 2018 when the Supreme Court banned its unloading on Karachi Port Trust’s (KPT) six berths to curb pollution in Karachi.

“We’re seriously considering the expansion option. But we have to speak to our regulators. We foresee higher demand as we’re already operating at more than 80pc of our capacity,” he said.

The cement industry has repeatedly called for expanding the country’s coal import infrastructure. A recent statement by its representative body referred to the long vessel line-up at PIBT causing delays, demurrages and extra operational costs. Cement makers have also asked the federal government to allow the discharge of imported coal at KPT.

“KPT would take four to five days to discharge a single ship of 50,000 tonnes. Thanks to its mechanised handling, PIBT unloads a 60,000-tonne ship in just 35 hours. The current delays are not because of our lack of handling capacity. The real reason is the mismanagement of imports,” he said, noting that importers should sit down with the terminal operator and schedule their vessels.

“We have the second berth. We’ll have to install the mechanical structure and put in place a second line for coal, which can be done upon regulatory approvals,” he said, noting that it’s up to the government if it wants to set up an entirely new terminal or get the required capacity added to the existing one at a significantly smaller cost.

Mr Khan insisted that PIBT has not unilaterally increased the coal-handling fee as it is still charging importers the official rate of $5.49 per tonne. The additional charge of $1 per tonne for miscellaneous expenses is also in line with the implementation agreement under which PIBT operates, he said. In total, the terminal collects from importers a fee of around Rs1,200 per tonne, including royalty, he added.

“Considering that 250,000 kilograms of coal make 1,000 kilograms of cement, the per-bag impact of PIBT charges on the final cement price is only Rs5. It stays the same regardless of other input costs,” he added.

Published in Dawn, September 11th, 2021

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