LAHORE, Jan 5: The federal government’s decision to unload 590,000 tons of imported wheat at the Gwadar Port later this month will cost it additional Rs1.24 billion, which it either has to pay itself or pass it on to consumers.

The Punjab Food Department, in a letter to the Ministry of Food, Agriculture and Livestock (Minfal), has resented the decision, calling it unnecessary and inflationary. The letter said other items like cars and machinery could be unloaded at Gwadar to make the port functional.

Using food items to port purposes could increase its prices, which would either way hurt the consumers, says an official of the Food Department. If the federal government picks up the cost, it will pay from tax payers’ money, which again will indirectly cost the people. If it directly passed on the cost to people, it would take the prices of food items up, he said.

The federal government’s decision to take wheat to Gwadar is officially based on two factors i.e. the dearth of berths at the Karachi port and to make the Gwadar port functional. Better planning at the Karachi Port could have helped clear imported wheat easily.

The imported wheat – around 590,000 tons – will take around 14 or 15 ships. One ship takes three to four days to clear the load.

According to the official, had the federal government staggered the wheat arrival and booked two berths, it could have easily cleared ships in three to four weeks.But the federal government put itself in a hard position by ordering entire wheat arriving in a two weeks’ time, which could exert pressure on the Karachi port. Now, in order to avoid that rush at the port or demurrage for standing ships, it has taken the entire shipment to the Gwadar port, escalating the cost beyond reasonable limits, he said and added: “Transportation cost from Gwadar to Karachi ranges between Rs2,000 to Rs2,200. If an average price of Rs2,100 per ton is taken, the total cost will touch Rs1.24 billion.”

The situation of the countries exporting items to Pakistan has also played a role in concentrating import in the end of January or start of February. For example, there are winter/Christmas holidays in Russia up to Jan 10. Thus the wheat will be loaded in the third week of January.

“The cost of transportation is also high because of there is no two way traffic to and from Gwadar,” says Muhammad Shabir – a transport owner.

The transporter owners do not get anything to transport to Gwadar as they get goods from Gwadar to Karachi and have to travel without any load from Karachi to Gwadar. The cost will come down when the port is fully operational and transports get enough goods to bring down their operational cost.

He agreed to the Punjab government’s suggestion that only luxury items should be off loaded at Gwadar, for the time being at least, and wait for transportation cost to come down for unloading food items.