Contents
AUTHORS’ INFORMATION – SECTION WISE.. vii
IMPORTANT TERMINOLOGIES FOR SHIPPING SECTOR.. xiii
SECTION 1: THE CONTEXTUAL FRAMEWORK.. 2
1.2. Objective of the Study. 4
1.4. Methodology of the Report 5
2.1. Current Status of Pakistani Flag Carrier 9
3.1. Consolidated Reasons for Poor Response of Private Sector in Shipping Industry. 12
3.2. Review of Recent Amendments in Merchant Marine Policy. 13
3.4. Conclusion and Recommendations. 18
SECTION 2: GOVERNANCE ASPECTS.. 24
5.3.1. Freight from PNSC’s Import Data Source. 26
5.3.2. Freight from Other Import Data except PNSC Source. 26
5.3.3. Freight from Non-containerized Bulk and General Export Data. 27
5.3.4. Freight from Containers’ Data. 27
5.3.5. Freight from Containers’ Import Data. 27
5.3.5.1. Freight from Container’s Export Data. 28
5.3.6. Consolidated Seaborne Freight Bill 29
5.4. Finding and Conclusion. 30
6.2. Analytical Review and Discussion. 31
6.2.1. Existing Strength and Potential Market 31
6.2.2. Enabling Role through Government Policies. 32
6.2.3. Institutional Weaknesses. 32
6.2.4. Revision in Exiting Merchant Marine Policy. 33
7.2. Historical Evolution of FOC.. 35
7.3. International Obligations and FOC.. 37
7.4. National Lines vs FOC.. 38
7.7. Conclusion and Recommendation. 41
8.3. The Context and Conceptual Framework of PPP.. 44
8.3.4. Worldwide PPP Institutional Structures. 48
8.3.5. PPP Evaluation Techniques. 49
8.3.6. PPP Infrastructure Projects. 49
8.3.7. Guidance on PPP Port Infrastructure Projects. 49
8.3.8. Practical Application of Green Growth PPP Projects. 50
8.4. Review and Discussion – JV in Shipping Sector of Pakistan. 51
8.5. Findings and Conclusion. 55
9.3. State of Play in Ship Financing in Pakistan. 58
9.3.2. Financing Instrument by State Bank of Pakistan. 60
9.3.3. Shipping Companies’ Perspective. 61
9.4. Bridging the Gaps: The Way Forward. 62
10.1.1. Merchant Shipping Ordinance 2001 – Relevant Provisions. 64
10.1.2. Application of MSO.. 64
10.1.3. Provisions Related to Employment on Board Merchant Ships. 65
10.2. Analytical Review and Discussion. 65
10.2.1. Article 117 of the Ordinance. 65
10.2.2. Article 119 of the MSO.. 65
10.2.3. Article 120 of the MSO.. 66
10.2.4. Article 123 of the MSO.. 66
10.2.5. Article 125 of the MSO.. 67
10.2.6. MSO Article 127 – Engagement of Seamen in Pakistan for Foreign Ships. 68
SECTION 3: STAKEHOLDERS AND ALLIED ACTIVITIES.. 74
11.2. Importance of Stakeholders. 75
11.3. Pakistan Context of Shipping Sector Stakeholders. 75
11.3.1. Ministry of Maritime Affairs. 77
11.3.2. Pakistan National Shipping Corporation. 77
11.3.3. All Pakistan Shipping Association. 78
11.3.4. Freight Forwarders. 79
11.3.7.1. General Overview.. 84
11.3.7.2. Major Problems for Seafarers. 85
11.3.7.3. Findings and Conclusion. 89
11.3.8. Classification Societies. 89
11.3.9. Ports and Harbours. 90
11.3.9.1. General Overview.. 90
11.3.9.2. Karachi Port Trust 91
11.3.9.3. Port Muhammad Bin Qasim.. 92
11.3.9.5. Single Point Mooring. 93
11.3.10. Shipping Insurance – Protection & Indemnity. 94
11.3.10.1. The Emergence of P&I Clubs. 94
11.3.10.2. Important Cases Resolved by P& I Clubs. 95
11.3.10.3. Pakistan Context of P & I Clubs. 95
11.3.11. Banking Sector – Financing. 95
12.2. Global Shipbuilding Industry. 98
12.3. Shipbuilding Industry in Pakistan. 100
12.4. KS&EW’s Areas of Business. 101
12.4.2.1. Repair Facilities and Assets. 102
12.4.2.2. Ships Repaired during Last 10 Years. 102
12.4.3. General Engineering. 103
12.5. Upgradation of KS&EW… 104
12.6. Private Sector in Shipbuilding In Pakistan. 104
12.7. Analysis of Government Policies Regarding Shipbuilding. 105
12.8. Challenges in Shipbuilding Industry in Pakistan. 106
12.8.1. Limited Shipbuilding/ Repair Capacity. 106
12.8.2. Regional Competitors. 106
12.8.3. Absence of a Strong Ancillary Industry. 106
12.8.4. Retention of Skilled Workforce. 107
12.8.5. Lack of Government Support for Shipbuilding. 107
12.8.5.2. Right of First Refusal 107
12.8.5.4. Tax Free Import of Ships/Crafts. 107
12.8.6. Lack of Research, Development and Design Capability for Shipbuilding Industry. 108
12.8.7. Outsourcing / Sub-contracting. 108
12.9. Opportunities in Shipbuilding Industry. 108
12.9.1. Ship Repair Business. 109
12.9.2. Proximity to SLOCs. 109
12.9.3. Cheap and Skilled Labour 109
12.10. Future Prospects of Shipbuilding Industry. 109
12.11. Conclusion and Recommendations. 110
12.11.1. Short-to-Medium Term Measures. 110
12.11.2. Long Term Measures. 111
13.2. A Brief Overview of Dhows. 115
13.2.3. Identification of Dhows by Origin. 116
13.3. Traditional Boat Building in Pakistan. 116
13.3.1. Wooden Boats – An Informal Industry. 116
13.3.2. Construction Process of Boat / Dhows. 117
13.3.3. Financial and Other Aspects. 118
13.3.3.1. Construction Expenses. 118
13.3.3.2. Working Practices for Boat Building Business. 119
13.3.4. Registration of Boats and Flag State. 120
13.4. Practical Use of Dhows. 120
13.4.1. Trade through Dhows in Pakistan. 120
13.4.2. Modern Utilization Trends of Dhows. 121
SECTION 4: REVIVAL STRATEGY AND RECOMMENDATIONS.. 125
14.1. Contours of Revival Strategy. 125
14.2. Jump Start Pakistan’s Shipping Sector – Key Recommendations for Priority Actions. 126
14.3. Collective Set of Recommendations. 127
Annex-A: Questionnaire 1 for Stakeholders Input on Shipping Sector Revival 135
Annex-B: Questionnaire 2 for Input on PPP-JV.. 136
Annex C: List of Freight Forwarders Based In Karachi (Pakistan) 138
Annex D: Pakistan Ship’s Agents Association. 164
Annex E: List of Stevedores. 167
Annex F: List of Classification Societies. 170
Annex-G: Features of Different Dhows. 171
Annex-H: Variety of Wood used in Boat Construction. 174