Clogged Port Spurs Pakistan to Plan $200 Million Grain Terminal

(Bloomberg) -- Pakistan plans to invest about $200 million to build a second grain terminal as the nation’s only dedicated facility struggles to meet demand for shipping oil seeds, cereals and fertilizer.

The state-run Pakistan National Shipping Corp. will build the terminal in Karachi, Rashid Siddiqi, an executive director at the company, said in an interview at the company’s port-side headquarters. PNSC also plans to build oil storage facilities at local ports, he said. Siddiqi said the grain terminal project has been presented to port and federal government ministries for approval.

The facility will help the company boost profit and sales, which dropped to the lowest in six years, as well as take pressure off the existing grain terminal at Port Qasim, where ships have to wait for up to three weeks to discharge cargo. PNSC, which has nine ships operating on global routes, has been hit by a slowdown in the international liquid cargo market and a government ban on furnace oil imports, which was lifted earlier this year.

Karachi Congestion

“This terminal once established will divide the shipping traffic load at Port Qasim,” said Siddiqi. Investors in the venture will include PNSC, Karachi Port Trust and a private company, Siddiqi said, declining to name the third partner. The project is expected to be completed in a year, he said.

The proposed terminal at Karachi’s main city port is expected to have a cargo handling capacity of as much as 1,600 metric tons per hour.

PNSC also plans to build an oil storage facility in Karachi for the country’s increasing demand for motor gasoline imports. Once the storage tank is built, the pace of ship handling at the clogged port will more than triple to as much as 7,000 tons per hour, said Siddiqi.

“Vessels waiting for six to seven days at port are facing losses on account of ship demurrages, something which ultimately passes on to the consumers,” Siddiqi said.

To contact the reporters on this story: Ismail Dilawar in Karachi at mdilawar@bloomberg.net;Chris Kay in Karachi at ckay5@bloomberg.net;Faseeh Mangi in Karachi at fmangi@bloomberg.net

To contact the editors responsible for this story: Chris Kay at ckay5@bloomberg.net, Arijit Ghosh

©2018 Bloomberg L.P.