SINGAPORE, Oct 17: War-risk surcharges imposed on commodity shipments to Pakistan are hitting trade profit margins and threatening the economy, Pakistan’s minister for communication and railways said on Wednesday.

Javed Ashraf said the war-risk premiums, imposed as a result of the September 11 attacks on the United States and subsequent US-led retaliatory action against Afghanistan, were “totally uncalled for and unjustified”.

“It is unfair to impose additional war-risk surcharges on shipments to a country which is not at war,” Ashraf, whose remit includes Pakistan’s shipping sector, told Reuters by telephone from Islamabad.

Many trade officials see India, Pakistan and Bangladesh as a “risk triangle” for ships coming to the region.

Earlier this month, three international shipping lines, Hyundai Merchant Marine Co Ltd and Wanhai Line of Korea, together with Hong Kong-based Orient Overseas Container Lines, suspended operations to assess war-risk insurance charges.

But they decided to resume Pakistan operations last week.

Ashraf said the fears of shipping firms were unwarranted and shipments from countries such as the United States were absolutely risk free.

“There is no naval war going on,” the minister added. “Afghanistan is a landlocked country with no navy worth the name. US naval ships are sitting on the Arabian Sea and they are our allies. So where is the threat to ships? In fact if anything, ships are more protected than ever before.”

Some US grain cargoes bound for South East Asia and the Indian subcontinent take the Suez Canal, which joins the Mediterranean Sea and the Red Sea, as do a major chunk of the US shipments to the Middle East.

Ashraf said the high surcharges on shipments could only add to Pakistan’s economic woes.

“Now that traders are paying these extra costs, it will make things expensive in our market and squeeze their profit margins, which in turn will indirectly hurt our economy,” Ashraf said.

He said the government was finalizing plans to provide guarantees to ships coming to Pakistan, and urged insurance firms not to charge the extra risk surcharge.

“We are also thinking of giving a sovereign guarantee to all the ships visiting Pakistan. That can undo, to some extent, the unnecessary burden which commodity imports and exports are having to bear,” he said.

He said a delegation of private shipping trade and government officials was due to visit London for talks with Lloyds and other insurance industry representatives.

“Many private delegations have already visited,” Ashraf said. “But this time we are including government officials in the delegation to explain the government’s viewpoint. We only hope that they will see reason.”

Loading and unloading operations at ports were continuing according to schedule and the tensions had caused no major delays in cargo movement, he said.

“Loading of wheat and other commodities for exports are going on as planned. Operations at Karachi port are very smooth. I have also not heard of any delays of shipments coming to Pakistan. “Many shipments from the US are on time.”

The Trading Corporation of Pakistan is holding a tender to export 200,000 tonnes of wheat, with October 19 the deadline for bids.—Reuters