KARACHI, June 4: A financial crisis will hit the fisheries sector if immediate steps are not taken to resolve a debt issue involving billions of rupees, it is learnt here.

The association of authorised commission agents (mole-holders) at the Karachi Fish Harbour claimed that currently there was an outstanding amount of Rs3,78,54,187 against three defaulting major processing units. This also includes an amount of Rs11,82,943,00 paid to the FCS as commission charged on the debt amounts.

The mole-holders’ investment for sending boats on fishing ventures runs into US $40 million per annum, according to a fisheries official.

The fishing business at Karachi Fish Harbour is being regulated by Fishermen Cooperative Society through auction or otherwise and charge 6.25 per cent commission on the gross sale amount. It issues fish brokerage permission to mole-holders, ie, to the members of the association. Whatever amount of fish is sold, it straight away want its 3.125 per cent commission of the gross-sale proceeds.

If not paid in time the mole-holder is threatened with the cancellation of the agreement with the FCS. Not only that, they also suffer at the hands of major defaulting buyers (factory owners or processors) who export seafood.

On the other hand, the mole-holders’ business is capital intensive and full of financial risks. They have to advance money to the launch owner for getting fishing vessel registered. Before sending a launch on fishing venture, they have to pay for buying fuel, ice for preserving fish, ration for feeding crew during the voyage and pay wages in advance to the launch master and crew. These are all essential expenses which have to be paid in any case before receiving any commodity.

At a meeting on Monday with the fisheries commissioner Raja Rafaqat, the association’s president Baboo Ismail in a memorandum sought the assistance of the concerned government agencies to evolve a mechanism for an effective recovery system in the fish trading business at the Karachi Fish Harbour. The meeting was specially summoned to discuss the measures to streamline the recovery system and cash flow in fish trading.

Talking to Dawn, he said the fishermen and mole-holders had been suffering great financial losses for many years. He warned that if remedial steps were not taken for the recovery of their stuck-up money, they would have no other option but to close down fishing trade.

“We have made several attempts and suggestions to the major defaulting buyers to amicably settle the issue by offering short and long term repayment schedule of the debts, but there has been no responsible”, he said

He also pointed out that from 1980 to 1989 outstanding dues amounting to Rs1,14,11,659 in the sale of fish were written off as bad, unrecoverable debts. “On the top of that we had to pay 3.125 per cent commission to the FCS in the amount of Rs3,56,614”, he said.