KARACHI: The government has decided to declare Gwadar a duty-free port, Federal Minister for Ports and Shipping Mir Hasil Khan Bizenjo disclosed on Tuesday, saying that incentives in this regard would be officially unveiled soon.

Speaking as a chief guest at a seminar “Future Prospects of Shipping Industry in Pakistan” organised by the Pakistan National Shipping Corporation (PNSC), he said the port would be made hub of imports and exports and also provide transit cargo facility to regional countries. Besides, it would offer deep cut in port dues and other charges.

Referring to recent exemptions announced by the government on customs duty, general sales tax and withholding tax on imports of ships and other floating craft, the minister said that although the ports and shipping sector was faced with many issues, the country was doing well with the development of new ports. However, he acknowledged that Pakistan’s shipping sector was lagging behind other countries, particularly because of no participation from the private sector.

Mr Bizenjo said when the Federal Board of Revenue (FBR) seemed to be reluctant in incentivising the shipping industry, he took the matter directly to Finance Minister Ishaq Dar. “He initially asked me to come through proper channel. But I told him it is a proper channel as we both are ministers.”

The finance minister, according to Mr Bizenjo, then immediately agreed and within four days exemptions from duty and taxes on imports of ships were included in the Finance Bill 2016-17.

Mr Bizenjo said the duty and taxes imposed through Merchant Marine Policy 2001 gave no results during the last eight years. “Let’s see how the current incentives work and attract investment in the shipping industry.”

He reminded the participants — mostly belonging to ports and shipping industry — that now the ball was in their court and assured that if there was positive response the government would extended the incentive period beyond 2020.

The minister agreed that it was impossible to attract investment in the shipping industry at 35 per cent tax rate as against 15pc to 17pc in India and Dubai.

He said a ferry service to be started from Karachi to Gwadar, Chabahar (Iran), Muscat (Oman) and Dubai was taking time since the government has to sign a memorandum of understanding with these countries.

The minister agreed to a suggestion that Sindh and Balochistan governments should give land to people living on the coastal areas so that they could develop salt fields and earn their livelihood.

Khalid Parvez, secretary of the Ministry of Ports and Shipping, told participants that exemptions given from duty and taxes on imports of ships should now attract private investment in a big way.

He said the government was developing infrastructure related to ports but there was big gap in shipping as the state-owned PNSC had nine vessels which carried only 22pc of national cargo.

Speaking on the occasion, PNSC Chairman Arif Elahi said that due to high rate of duty and taxes the corporation had been paying up to $20 million on earnings of $50m before July 1, 2016.

He also briefly narrated the history of country’s shipping industry that how it started with only three ships in 1947 and then went up to 41 in 1960 when it was nationalised.

He disclosed that the PNSC currently hauls three categories of cargoes including dry bulk cargo, liquid and defence cargo. Total sea cargo of the countries is currently at around 73.8m tonnes with 47.47m tonnes dry and 26.38m tonnes liquid cargo.

However, he said the corporation has no container carriers due to which entire containerised cargo was being handled by foreign vessels. The corporation earned a profit of Rs2 billion during the first nine months (July to March) of this fiscal year, he added.

Published in Dawn, July 13th, 2016