More than a sixteen metre depth would be required for catering to over 30m draft (the depth of the ship submerged) vessels at "Keamari Groyne," where such a berth is needed. Thus, the establishment of this kind of berth is necessitated by the fact that currently our ports are restricted to the type of ships that can enter into our ports, because of the limited depth of water that we have.
The presence of this berth would allow entry of heavier cargo carrying ships of the new generation, requiring more depth. Furthermore, this particular type of berth would allow swift turnaround times for new generation ships.
CARGO VILLAGE Another facility direly required for trans-shipment is the establishment of a place where cargo to be imported or exported can be stored. The place would be over a large area and could therefore, be proclaimed as the "Cargo village."
The relevant ministry has been looking into this matter as well and a feasibility study was conducted in 2004. The report concluded that the area for this project should be developed in two phases.
The first phase of the project would cover construction on an area of 330 acres and the second phase to deal with construction on 320 acres. This would however, require an expected investment of Rs 2200 million in infrastructure development only. The total investment required would be approximately 400 million dollars.
The role of logistics would play a critical part in the success of the cargo village and in this regard, the concerned authorities have suggested linkage of the Village with M10 and Lyari Expressway.
Furthermore, it is relevant to mention the fact that trans-shipment can only deliver its promise of success, only if the existing facilities are further developed and multiplied. There is an ever-growing need for more chemical terminals, oil terminals, cargo terminals multipurpose wharves and ports in general, in addition to the requirement of new facilities requiring construction.
DEVELOPMENT OF INLAND ROUTES Having thoroughly analysed the situation of the shipping industry of Pakistan and the development of projects that are being undertaken for the establishment of trans-shipment, we arrive at the second half of the solution.
The second part of the solution pertains to the development of the logistics and communications network in the country, that would allow goods to be transported from or to India, China, Pakistan or any of the neighbours, such as Afghanistan, Iran or even the Emirates, whom China and India want to establish trade with via Pakistan.
China is involved in exporting $583.1 billion f.o.b. (2004 est.), according to the research conducted by the CIA, relating to exports of machinery and equipment, plastics, optical and medical equipment, iron and steel, with US 21.1%, Hong Kong 17%, Japan 12.4%, South Korea 4.7%, Germany 4%.
Whereas, its imports stand at $552.4 billion f.o.b. (2004 est.) on such commodities as, machinery and equipment, oil and mineral fuels, plastics, optical and medical equipment, organic chemicals, iron and steel with the importing countries being Japan 16.8%, Taiwan 11.4%, South Korea 11.1%, US 8%, Germany 5.4%.
Although the country has seven ports and harbours, namely, Dalian, Guangzhou, Nanjing, Ningbo, Qingdao, Qinhuangdao and Shanghai, it still has a huge area to cover for trade. The large distances covered and subsequent transportation costs, are a very significant amount of the products imported or even exported. These costs when accumulated eat away at the foreign reserves of a country.
Similar is the ease with India. India is involved in exporting textile goods, gems and jewellery, engineering goods, chemicals, and leather manufactures to US 17%, UAE 8.8%, China 5.5%, Hong Kong 4.7%, UK 4.5%, Singapore 4.5%. These exports amount to $69.18 billion.
Whereas, its imports amount to $89.33 billion f.o.b. (2004 est.) in commodities such as crude oil, machinery, gems, fertiliser, chemicals. The importing countries include China 6.1%, US 6%, Switzerland 5.2%, Belgium 4.4% (the statistics are from the study of the CIA, 2004).
A problem similar to China exists for India too. Even though it has a greater number of ports than either Pakistan or India, eleven to be precise, it still faces the high transport costs of imports and exports whilst trading due to its geographical position.
Thus, even its strategically located ports in Kandla, Bombay, Nhava Sheva, Marmagao, New Mangalore, and Kochi (formerly known as Cochin) on the west coast, and Calcutta-Haldia, Paradip, Vishakhapatnam, Madras, and Tuticorin on the east coast all facing the same problem of having to traverse a very colossal distance to reach its trading partners.
In addition to the facts given above, Pakistan too, faces a major problem in the term of illegal imports from China and India. According to an article in the Business Recorder, which sheds light on facts uncovered by a report by the World Bank, illegal trade between India and Pakistan ranges between 0.5 to 0.3 billion USD.
This number is colossal in comparison to the legal trade taking place therein. The total annual trade, over a tenure of seven years has not once surpassed 250 million USD and this too has been in the favour of India.
Even though an elaborate discussion on barriers to trade existent in the countries, mutually, is beyond the scope of this article, it is pertinent to mention a few constituents of this dilemma briefly.
The trade barriers are of two types, namely formal trade barriers and informal trade barriers. Whereby, formal barriers are further classified as tariff and non-tariff related. The non-tariff related trade barriers consist of trade bans, denial of "Most Favoured Nation" status to India, quota restrictions, social and environmental issues and differences in quality controls prevalent in the countries.
Informal trade barriers are in the form of escalating transportation costs; categorised as transport costs, procedural costs and rent seeking, all these costs open up an avenue for the establishment of an unregulated system of bribery and other forms of corruption.
In addition to the above facts, on a government level, Pakistan and India have abolished quota restrictions and reduced tariffs progressively in compliance with the WTO directive.
Opening up of inland routes, as per the suggestion of this article would be instrumental in curbing smuggling and illegal trade taking place between the countries. According to the World Bank report, illegal trade routes are implicitly distinguished as "major" and "minor" routes.
TRADE ROUTES CONSTITUTING THE MAJOR ROUTES ARE:
-- Dubai-Bandar Abbas -Kabul-Jalalabad-Bara
-- Dubai-Bandar Abbas -Kandahar-Wesh-Chaman
-- Dubai-Bandar Abbas - Kandahar-Noshki-Quetta
-- Dubai-Bandar Abbas -Gulistan-Qila Abdullah
-- India-Karachi- Peshawar- Jalalabad- Bara; Afghan transit trade (ATT)
-- Sindh cross border
-- India-Dubai- Karachi
THE FIVE MINOR ROUTES OF ILLEGAL TRADE ARE:
-- Delhi-Amritsar-Lahore
-- India-Sukkur
-- Mumbai-Karachi
-- India-Singapore-Karachi
-- Mumbai-Kabul-Bara
The modes of transportation involved in this sort of trade, ranges from containerisation to being packed and carted over mules and even human carriers. Depending on the proximity of the location, boats and launches are also used to conduct this sort of illegal trade.
Thus, it is in this regard, that Pakistan is most suited to serve India and China through its geographical location. By allowing goods to be transported to Pakistan from the countries under consideration, through its land routes to its ports.
Pakistan can facilitate India and China in delivering and receiving goods from and to its trading partners at lower costs and also combat illegal trade, through which the revenues of all countries involved is suffering.
While at the same time, Pakistan could charge a minimum freight charge or "Fees," and thus, earn revenue on all transports. An examination of the location of Pakistan with respect to India and China shows, that the solution under discussion is viable and easily employable.
The opening up of borders for trade facilitation and the mutual benefit of all parties concerned would be affected by the historical relationships between these countries. It is worth mentioning that through the passage of time, China has shown its support for Pakistan in its time of need.
However, this has not been the case concerning the relationship of Pakistan with India. Rivals since the day of Pakistan came into existence, they have both waged war on one another innumerable times.
Thus, even though the development of our port facilities is an independent activity, opening up of our borders shall be a political agenda and even though vital to the success of our solution, is very questionable.
However, with the changing scenario in world trade and the emergence of global economies, it is imperative that Pakistan recognises the importance of matching the pace of development in other countries of the world and to forget its past differences with India on issues such as the Kashmir dispute and make the most of the circumstances, therein.
WHY INVEST IN PAKISTAN? In case the reader feels that the arguments provided above have been "un awe inspiring" and require further convincing, a list of reasons has been included below, which reflects on trans-shipment as a very viable solution.
-- Industrial economic zones, like China are being developed for prospective investors
-- All three Ports are highly promising for investment and receptive to proposals
-- Pakistan has skilled and trained seafarers, inferior to none in training and skills
-- The Shipping policies adopted are investment friendly. Thus, Pakistan encourages investment in Ship owning, under the Pakistan flag
-- Simplified procedures to facilitate and encourage investment are being adopted, to promote efficiency and timeliness
-- Availability of highly skilled labour with no communication difficulty, currently, 48.7% of the people above the age of fifteen are conversant in the English language [8]
-- Economic growth rate presently at 7% plus and projected to 8-10% in the coming years and a real GDP growth rate of 6.1% (2004)
-- Gwadar Port is being developed as trans-shipment hub to facilitate main line vessels of 14 meters plus draft, besides acting as transit facilities.
PAST MISTAKES The economic growth of India and China has been so rapid, that in their ambition to meet the set targets, they did not take effective steps to curb the harmful effects that would emerge.
The levels of air and water pollution are extremely high with this regard. Thus, considering the future developments in the trade routes and coastal front of Pakistan, it has been decided that policies shall be implemented that shall prevent the same mistakes as made by China and India.
In order to prevent widespread water pollution that would be resultant of the optimum usage of the port facilities, in order to facilitate the trans-shipment activities, the Pakistani government has already drawn contingency pollution control plans.
The responsibility of necessary measures in case of contamination water due to oil spills and other toxins lies with the Director-General (Technical) Ports and Shipping. In fact, an independent department for pollution prevention has been explicitly established, namely, The Pollution Control Department, which is responsible for all of the three ports in their respective areas of jurisdiction.
OTHER AGENCIES ALSO RESPONSIBLE FOR PREVENTING POLLUTION AND DAMAGE TO THE MARINE LIFE ARE:
-- Environment Protection Agencies of Sindh and Balochistan which are within 12 NMS (nautical miles) of the coastlines, except Ports.
-- Maritime Security Agency from 12 NM to 200 NM
The issue of marine pollution prevention has always been very dear to the concerned authorities and the Government, such that explicit environment protection legal instruments have been defined.
A FEW OF THESE LAWS ARE LISTED BELOW:
-- Pakistan Environmental Protection Ordinance 1982 Act 97, (Environment Protection Agencies, Environment Tribunals and Magistrates NEQS, etc)
-- UNCLOS
-- IMO Conventions
-- Merchant Shipping Ordinances
-- Ports Act
-- Acts for individual Ports
The implementations of the laws mentioned above have necessitated the setting up of Pollution Control Centres. The responsibility of setting the Centres lay with the Port Authorities, which are very active in responding to marine hazards, especially caused by oil spills, etc.
The Centres ensure the implementation of International Conventions on Ports as well as on ships and the adoption of stringent measures to prevent pollution and uplift of the marine environment.
In order to conform to international laws, concerning marine environment other legislative bodies have been established with well-defined contingency plans. One of the conventions that Pakistan conforms with in this regard is the OPRC, according to which the following measures have been undertaken or are still in the pipeline.
MEASURES UNDER OPRC CONVENTION:
-- National Oil Spill Contingency Plan
-- Port Authorities equipped with oil spill regulatory equipment of international standards
-- Setting up of special body of a private public partnership of oil importing/exporting corporations and the Government equipped to handle any oil spills on the coast of Pakistan
-- In order to impart the required skill set of handling oil spills, two training workshops under the auspices of the IMO were also conducted.
Thus, Pakistan is on its way to adequately equipping itself to combat marine pollution of the future. The only thing remaining requiring undivided attention and effort; both by the government and the private sector to achieve the outlined targets, for the "successful" betterment of the economy, is education.
One of the biggest impediments for any nation's development is large population size and massive illiteracy, as is prevalent in Pakistan. The low levels of education are the root cause for the economic disparity, unequal distribution of wealth, huge population, widespread poverty and all other issues. However, the NGO's, private sector and even the Government of Pakistan is now taking necessary steps to combat illiteracy.
Thus, even though our development is slower than either China or India's economies, if the plans laid out, are followed, then growth of the country would be more widespread and all income groups would benefit.
OVERALL ADVANTAGE OF PAKISTAN OVER CHINA AND INDIA The number of ports in both China and India exceeds those in Pakistan. Therefore, even a fewer number of Pakistani ships exporting items, could reach out to a vast number of ports, and therefore markets in both of these countries.
Opening up of free trade between Pakistan-India and Pakistan-China, is therefore, going to be more beneficial for our economy. This statement is justified by the fact that India has eleven major ports and 139 minor ports around its huge coastal front, where as Pakistan has only 3 ports and therefore, a limited areas of access for either of these, countries.
Similarly, China has a comparatively large number of ports, seven major ports to be exact.
In addition to the colossal markets available for Pakistan to enter, another incentive would be the underlying technological advancement in both the countries. Pakistan could therefore, benefit from the "Head start" that they have had over us, and learn from their experiences from their journey to success.
THE SPILLOVER EFFECT The development of inland routes would cause development of infrastructure in the interior and currently inaccessible parts of the country. A major "spoke in the wheel" of piracy and smuggling would have an effect similar to protectionist policies implemented by the government, whereby, the local small and medium sized enterprises and entrepreneurs would have a chance at fair play.
A "level playing field" available to the inhabitants would allow them to "spruce up" their expertise and compete with foreign products available at affordable prices.
The benefits reaped would not be restricted to the areas in close vicinity of the developed trade routed but in fact, at a macro economic level. The "Trickle down" effect would help the average person and the standard of living for the common person would improve.
Another way of looking at the benefits would be, that in order to sustain themselves, people would require skill sets that match the task in hand. This would further initiate acquiring of education and skills evolving with technology.
Not only would the manufacturing industries benefit but also there would be equal opportunities for the development of service industries.
The indiscriminate accessibility of people to these far-off places, rich in heritage and natural splendour would give a boost to the tourist industry and hotels, to name a few.
Furthermore, Balochistan's coast is a promising fishing ground. Hence, the fish processing industry could be developed at Gwadar.
Concerning the tourism industry developments, the underlying principle would be that both Pakistan and India have shared the same historical background. Pakistan should develop these localities, particularly areas in interior Sindh, where the ancient port of Dibal existed during the time of Mohammad Bin Qasim's invasion of the sub continent.
Lahore would be another attraction for tourists. The benefits could also be reaped by the film industries all over the world; the picturesque locations have hosted movies like "Bawani Junction," "Vertical Limit" by Hollywood and could be used by other moviemakers too.
However, in order to make this concrete the Government of Pakistan, the political parties and the entire population must make a joint effort in making the country conducive to entrance and safety of foreigners, by showing them tolerance and without judging their morals and religious beliefs.
This would allow the country to make development in the rural areas of Sindh possible; furthermore, a safe environment would be conducive to other business activities and serve as an attraction to foreign direct investment.
OTHER ISSUES: The major problem of trans-shipment is that it introduces added transfer, storage, and transaction costs and times which often exceed the cost and time saving introduced by faster, larger container and "feeder" vessels (a peculiar type of small cargo ship).
Inter and intra modal transfers, which are usually still performed one container at a time, introduce major stratum in the logistics chain where a mega container vessel may require thousands of trucks to deliver and pick up a major part of or a complete shipload of containers.
Even when large numbers of container handling port side trains are employed on a wharf, major obstacles prevent smooth ship to/from truck or rail car container flows. As a result a majority of containers usually passes through buffers or stacks in mainline and even often in feeder containership terminals.
Furthermore, there is the added requirement of expenditure in the establishment of dry docks, on the inland routes, where the cargo transported undergoes a checking process. This also introduces the possibility of corruption and thus a hindrance in successfully establishing trans-shipment.
Trans-shipment also offers opportunities for cargo consolidation or deconsolidation and value added activities such as assembly and customising to meet specific local or time varying demands. To make trans-shipment attractive, the economic and operational benefits must outweigh added economic and operational costs such as additional handling costs, port dues, and possibly extra voyage distances or deviations.
At the same time, trans-shipment is often necessary to attain economies of scale in shipping as well as the overall logistics chain.
The major problem of trans-shipment is that it introduces added transfer, storage, and transaction costs and times which often exceed the cost and time saving introduced by faster, larger container and feeder vessels.
Inter and intra modal transfers, which are usually still performed one container at a time, introduce major seams in the logistics chain where a mega container vessel may require thousands of trucks to deliver and pick up a major part of or a complete shipload of containers.
Even when large numbers of container supporting framework are employed on a wharf, major obstacles prevent smooth ship to/from truck or rail car container flows.
More seamless intra modal transfer can usually be accomplished when supply chain links are simplified through links and are added to the chain. This in addition to the potential reductions in origin/destination times in supply chain or buffer inventories, near seamlessness, and improvements in just-in-time delivery has made trans-shipment an element in intercontinental or transoceanic container shipping.
Other advantages of trans-shipment are opportunities for rerouting and customising of cargoes. Large trans-shipment ports are major modal points in logistics management and offer the opportunity for efficient transaction management.
They offer opportunities for and the required flexibility to respond to changes in supply chain structure, sequence, and direction imposed by new demands or market conditions. Trans-shipment provides flexibility to supply chains and, therefore, additional opportunities to logistics management.
Having seen successful examples of trans-shipment in the Caribbean countries and most other developed countries, the solution provided in this piece is not only practical but also applicable. The sooner Pakistan undertakes inter and intra modal transportation and, hence trans-shipment as per the suggestion of this paper, the sooner we shall be able to embark on a fight against smuggling and a journey to economic prosperity.
(Concluded)