In conversation with Pakistan’s Minister of Maritime Affairs Syed Ali Haider Zaidi

For Gulf News, I asked Minister for Maritime Affairs Syed Ali Haider Zaidi a few questions.

Mehr Tarar: What were some of the most challenging issues you faced when you were appointed as the head of the Ministry of Maritime Affairs (MOMA)?

Minister for Maritime Affairs Syed Ali Haider Zaidi: When I was asked to take the position of Minister for Maritime Affairs, I remember Prime Minister Imran Khan saying that this ministry was known for entrenched corruption more than anything else. Interestingly, I was the first elected parliamentarian to head MOMA, as most of my predecessors were senators—indirectly elected members to the upper house of parliament.

The biggest challenge was to overcome what is commonly known as “sea blindness” in our political and bureaucratic setup despite Pakistan having 1000-km coastline and three major ports—Karachi Port Trust (KPT), Port Qasim Authority (PQA), and Gwadar Port Authority (GPA). Potential of the international Sea Lanes of Communications and Exclusive Economic Zone (EEZ) had mostly remained uncharted and unfathomed.

Another challenge was to underscore the importance of the “blue economy”. In 2018, not much understanding of the concepts of the blue economy existed, now it’s mainstreamed in conferences, and courses are taught at some universities. Shipping, ports, coastal industrial estate, and coastal tourism are all part of the blue economy. It also deals with the logistics of various energy sources like hydrocarbons—oil, coal, LNG—that arrive via ports. Various power plants are also installed at ports.

Climate change is another part of the blue economy concept. Sea pollution is a huge issue as solid waste is dumped in the sea. Fisheries, after the 18th Amendment, is a provincial subject as well as a political one. EEZ, with its 290,000 square kilometres, is a federal domain, and so is deep sea fishing.

Human resource was another huge challenge. The list that needs to be checked is long: number of berths in need of repair at KPT; limited berths for general cargo at PQA; limited draft due to lack of dredging; lack of night navigation; size restriction on ships due to lack of depth at berth; clearance of containers and other cargo from terminals due to time restriction; state of oil piers; and handling of capacity of oil that arrives at KPT and PQA. We cannot control the price of oil, but we can ensure that ships carrying oil are immediately cleared. Petroleum storage, which belongs to oil marketing companies, is insufficient, and sometimes we are blamed for a ship’s prolonged berthing.

Have you been able to tackle some of the obstacles that were enduring detriments to MOMA’s short- and long-term progress?

HR for maritime affairs is specialized; since salary packages are higher outside Pakistan, qualified people continue to leave. Things are turning around slowly. We’ve retained good people, hired professionals with the requisite modern knowledge, and re-evaluated our HR to ascertain employees’ level of domain knowledge, and how it is to be used. Despite many changes, on a scale of one to ten, I’d say I’ve achieved perhaps three or four.

Tugboats, used to berth ships, were derelict. In the last five years, PQA was paying $29,000 per day to rent four tugboats. After some careful management of PQA’s finances, we’ve purchased, through a tendering process, our own tugboats and pilot boats to stop the drainage of thousands of dollars. We have also ordered tugboats to increase the efficiency of KPT. It’s an approximately 65-million-dollar acquisition, for which we did not take any funding from the Public Sector Development Programme (PSDP). The entire expense is covered by ports’ self-generated funding.

To mitigate the impact of LNG shipping on other shipping, and to allow night navigation in the 49-km long channel, deepening and widening is needed through dredging. The cost of this project is approximately 258 million dollars, and it will not be funded by PSDP. This will open a new alternate navigation channel and unlimited prospects for new berths.

Pakistan National Shipping Corporation (PNSC) had a nine-ship fleet to which we’ve added two. For capacity building, our plan is to acquire three or four more ships in the next six to eight months, and the tender process has been initiated.

Does the work of MOMA have a direct impact on Pakistan’s economy?

Ninety-seven percent of Pakistan’s trade is through the ports, and our economy, therefore, is mainly dependent on the 24/7 operation of the ports. During the toughest periods of the COVID-19 pandemic, our ministry worked, non-stop, through contingency plans, to ensure the uninterrupted operation of our ports for a constant supply of basic commodities to and from Pakistan, while most of the ports in the region closed due to the pandemic and suffered huge clogging later.

In the last three years, the tax payment of PQA, KPT and PNSC is worth PKR 20 billion. PQA’s net profit after taxes in 2017-2018 was six and a half billion rupees; in 2020-2021, just the tax was eight and a half billion rupees while profits rose to PKR 18.19 billion. What we did was a bit of a proper financial management. PQA’s profit, after tax, in our four years, will be more than the cumulative profit after tax recorded in PQA’s last 40 years. Our two ports, KPT and PQA, indirectly, contribute 50 percent of the revenue collected in the entire country by the Federal Bureau of Revenue through all kinds of duties and taxes.

PQA is the energy hub of Pakistan, mainly for coal and LNG. There are two terminals on BOT basis, established during the previous government’s term. Pakistan pays half a million dollars on tolling charges, every day, to these terminals. We have negotiated a win-win deal. The new terminals, each with 750 mmcfd capacity, soon to be operational at PQA, will have no government guarantee. Rather, they will pay minimum throughput to PQA along with a bank guarantee and no tolling charge.

Our priority is to go into expansion to benefit the state. All state-held strategic exports and imports should be given to PNSC. A global practice to promote a national shipping line is to pay the freight in the local currency. Since we don’t use our own vessels, we suffer a whopping amount of six and a half billion dollars per annum for freight. The present practice is that cargo is shipped on Cost Insurance and Freight (CIF) basis instead of Free on Board (FOB). MOMA is bringing forth a policy that all state-financed business is done on PNSC. Once freight is charged in rupees, PNSC’s capacity will strengthen, new ships will be bought, and employment will increase. Instead of paying six billion dollars in freight, if we increase our ships and pay in rupee, the dollar flight would decrease too, impacting the economy in a positive way.

Not many studies are available to understand how to benefit from the blue economy. The Holy Quran clearly states: “And He it is Who made the sea subservient that you may eat fresh tender meat from it. You bring forth from it ornaments which you wear. And you see the ships cleaving through it…” (Surah An-Nahl, Verse 14)

Pearl farms are made in saltwater in Japan, Thailand, and China; do we have any? Shrimp farming is a global business; have we ever encouraged our private sector to increase their exports? Our fish export is stuck at $450 million. Has it ever been subsidized? Our potential market is 2.5-3 billion dollars. Even a small country like Vietnam is twenty times ahead of us.

All these issues are huge challenges between the federal government [of PTI] and the provincial government [of PPP].

Most of the big cities of the world are port cities. Singapore, a transit port with a population less than that of Islamabad, has a business of 30-32 million containers per year. We move 3.2 million containers annually, and that is because unlike Singapore that works as a giant warehouse, our business is limited to hinterland cargo. A deep-water port, South Asia Port Terminal Limited, was made for this purpose at KPT, but it was not used. Now I’m trying to make it operational.

We have the Gwadar Port that is ideally located for bunkering. Being at the mouth of the Strait of Hormoz, Gwardar is an ideal location for transit freight. Two-day sailing time from the African continent, one day from the Middle East. If we make a transit port at Gwadar warehouses, much can be done.

Peace in Afghanistan is integral to Pakistan’ economic stability. Is this an accurate or an exaggerated statement?

Peace and stability in Afghanistan are of great importance to us, and for many reasons. It’s all directly related to our economy. Instability arises if there is no peace in our neighbourhood. The connectivity that we want with CARs cannot happen unless we’ve a peaceful passage through a peaceful Afghanistan. I had the opportunity of accompanying the Prime Minister to Uzbekistan and Tajikistan where I met leaders of SCO and CARs. All of them are interested to use Pakistan’s ports because of the landlocked geography of their countries. Access through sea is through our ports, but that access will come through Afghanistan. Coexistence with a stable and peaceful Afghanistan is of utmost importance to Pakistan.

How would you describe your vision for MOMA?

In my view, Pakistan has the potential to become a maritime power. We have all the ingredients, what is lacking is the real understanding of the subject. We are developing our fisheries sector; a brand-new comprehensive fishing policy has been made. We’ve also prepared a policy to import ships, duty free, for local and foreign investors to register their shipping companies in Pakistan. We are trying to decrease the freight-incurred burden of foreign exchange. Digitisation is essential to make ports efficient, and for that we’ve created posts for IT general managers.

There are several ways to help the economy. Having studied and visited many important ports in different countries, the model that I wish to follow is that of the Port Authority of New York and New Jersey (PANYNJ). New York was a port, prices of its real estate assets kept rising, and warehouses and storage facilities were moved to New Jersey. Through their real estate assets, PANYNJ built much of New York. Even JFK, Le Guardia and Newark are owned by PANYNJ. But most of their cargo income is through cargo facilities in New Jersey.

With the KPT land in the city of Karachi integrated with the transhipment model of Gwadar, I’m certain Pakistan’s maritime power has immense potential. Full implementation of our initiatives will be in the next one and a half year.

The other ambitious project is the Karachi Coastal Comprehensive Development Zone (KCCDZ), a 3.5 billion Chinese investment. Groundwork is being done, feasibility study reports have been made, and once the financial foundations are laid, brick and mortar development will commence. KCCDZ, a state-of-the-art project under CPEC, will have a water treatment plant; mangroves; 20-25,000 no-cost and low-cost houses for the Machar Colony residents; an industrial complex; high, middle, and low-end residential units; four new berths; and processing plants for new fisheries.

Prime Minister Khan does not make proclamations to make Pakistan a global power; he wants to make Pakistan a welfare state. When you become a welfare state, you invariably become an economic power. First, we must become a welfare state, think about our people, and have compassion for one another. Before we become any kind of a power, we must try to become empathetic humans. Educate our people. Pehle qaum bano, mulk khud ban jai ga. Become a nation before becoming a state.

We will do it. InshaAllah. It’s not that simple though. Have we fixed everything? Not at all. Are we going in the right direction? Yes. Changing the status quo is incredibly difficult. It took Imran Khan 22 years to come into power, and that was because people took a long time to understand what he stood for.