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PIBT plans to invest $70mln in additional cargo handling - Inside Financial Markets

PIBT plans to invest $70mln in additional cargo handling

– The News

Pakistan International Bulk Terminal (PIBT) on Thursday announced plans to increase its cargo handling by four to five million tonnes in the next three years with an investment of around $70 million.

PIBTL contributed Rs5.8 billion to the national exchequer in FY2020-21 in total, of this, around Rs3.7 billion was royalty payment of $2.27 for every tonne of handled cargo, while around Rs2.1 billion was for other duties and taxes.

PIBT Chief Financial Officer Arslan Iftikhar Khan in a statement said PIBT was a fully mechanised bulk cargo handling terminal in the country built on build, operate and transfer (BOT) basis as per the international standards. “PIBT is a national infrastructure project which has been providing state-of-the-art terminal services since the commencement of its commercial operations in April 2017.”

Speaking about the criticism on the terminal’s cargo handling capacity, the CFO said such infrastructure projects were built as per future capacity projections, and meant to serve for many years. He also said that capacities could be increased when needed.

Currently, the terminal was “designed to handle 12 million tonnes of coal annually”, he said, reminding that the imports touched a peak of 10.07 million tonnes last year.

Therefore, the current situation was not a capacity issue but merely an issue of mismanagement of imports. “From January 2021 to April 2021, only 2.65 million tonnes coal was handled and the remaining capacity was not utilised. The same happened from July 2020 to August 2020 when only 1.4 million tonne of coal was handled,” he added. “This shows that the terminal has ample capacity to handle the country’s coal requirements and we handled over a million tonnes of coal per month many times during the last year.”

He said recently freight rates across the globe have increased to an all time high of $36,000/day. Also, coal was now being traded at an all time high of $150/tonne.

“The anticipated rise in coal prices and resultant urgency of the importers to purchase coal, coupled with the inefficiency of the importers to schedule their vessels, is the major reason for the recent congestion at PIBT, and they are unnecessarily questioning the capacity of the terminal,” Arslan said.

He reminded that the PIBT was regularly updating its website to display the vessel arrival schedule to enable coal importers to schedule their coal imports in the most efficient manner. However, he said “some coal importers still fail to plan their imports efficiently despite repeated requests from PIBT”.

The CFO reminded that the terminal would not be overloaded if importers managed to schedule their cargoes efficiently and as per displayed timetables for vessels.

“The terminal can discharge a 60,000 tonnes coal vessel in less than two days of operations,” said the CFO. He added that earlier the imported coal was handled manually at the stevedoring berths at Karachi Port Trust, which took 8 to 10 days per ship, that too without compliance of environmental laws and approval of SEPA.

Syed Zaki Hussain

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)