$60bn income likely from mega projects

$60bn income likely from mega projects
By Khaleeq Kiani
ISLAMABAD, Oct 26: Pakistan expects to earn $60 billion a year from transit trade after completion of the national trade corridor, a couple of shipyards and improvement of the North-South road network.The estimate has been prepared by the Planning Commission that is seeking advisory services from international firms for establishment of two large shipyards at Port Qasim and Gwadar Port on a fast track basis. The appointment of an adviser for preparation of project structure would lead to international competitive bidding to develop the shipyards and related infrastructure at an estimated cost of $500 million, to be raised through an emerging public-private partnership facility.Official sources said the government had already asked the Karachi Shipyard & Engineering Works Limited to coordinate with reputable international financial institutions, investment banks having direct or partnership with technical, legal and other consultants to assist in planning, development and implementation of the project. The private sector will be responsible for designing, financing, building, operating and maintaining the Shipyard.The national trade corridor —of which Gwadar port is an integral part — is a major communication link for Central Asian states, China and the Gulf as 60 per cent trade of oil and gas is done through this route. The government expects it to play a major role in the region by reducing the transport time from and to China, the Middle East, Central Asian states, Europe and Africa.The first project, Gwadar Shipyard will be set up at Gwadar East Bay (Shamba Ismail area), over approximately 500 acres. Starting with ship repairing, the facility will be converted into building Very Large Crude Carriers (VLCCs) and Ultra large Crude Carriers (ULCCs) and will have at least two dry docks of approximately 600,000 DWT.The second project, Port Qasim Shipyard is planned to be developed adjacent to Korangi Fish Harbour (Port Qasim Area), covering an area of approximately 500 acres with at least two dry docks of 600,000 DWT. The main function of this shipyard will be to build large ships up to VLCC/ULCC size and offshore and onshore oil rigs. It will also have ship repair facilities.A recent meeting presided over by President General Pervez Musharraf decided to accord high priority to the shipbuilding industry to make Pakistan a leading shipbuilding player by taking advantage of its location and emerging opportunities in shipbuilding, including engine and equipment manufacturing.The meeting also constituted a high-level policy board headed by the prime minister to provide policy initiatives for development of shipbuilding and marine industries in the country. The board was asked to facilitate the development of large shipyards at Port Qasim and Gwadar Port and to ensure acquisition of land and provision of related infrastructure. The board comprises governors of Sindh and Balochistan, ministers for ports & shipping, defence production and privatisation, adviser to the PM on finance, deputy chairman of the planning commission, chief of Naval Staff and secretaries of defence production and ports and shipping.Currently, more than 80 per cent of Pakistani trade is carried by foreign ships as the state-run Pakistan National Shipping Corporation (PNSC) manages a fleet of only 14 ships. Last year 3,000 ships visited the Karachi Port and Port Qasim but none of these ships could be provided repair services as the two small docks currently available fall much short of even domestic requirement.According to official data, the international order book for shipbuilding jumped from 115.5 million DWT to 300 million DWT between 2002 and 2006 and the demand for new ships will increase from around 30 million DWT a year at present to around 90 million DWT a year in 2055.