Plumbing the depths

DP World's new Qasim terminal urgently needs a long-awaited dredging project to get the green light DP World's new Qasim terminal urgently needs a long-awaited dredging project to get the green light
Industry Database

Depth is on the mind of Pakistan’s Port Qasim: dredging work has been the subject of dark mutterings and the authority has only recently signed its 2010/11 contract – with an expected loss of $70m from the delay.

The depth difficulties have been sharpened with new facilities coming on stream.

Firstly, a dedicated grain and fertiliser terminal has been completed with an investment of Rs10bn ($135m). This sixth terminal is a fully automated, dry bulk cargo handling and storage terminal capable of handling vessels of 80,000 dwt and 4.1m tonnes of dry bulk cargo per year – part of Pakistan’s bid to help control the area’s rampant food inflation. But at present, only ships of 50,000 tons can get through the channel.

Secondly, DP World’s Terminal 2, which expanded the operator's capacity from 900,000 teu to around 1.2m teu has recently opened with a matching Inland Container Terminal (ICT) in Lahore, over 1,000 km away. And the containerships it’s wooing need that 14 metre draught quite badly.

Finally this February, very late in the day, the China Harbour Engineering Company (CHEC) gained a maintenance contract to modify Qasim navigation channel and modify its turning basin in order to let the big ships in, but it’s a maintenance version, worth around $55m – as opposed to the original $138m project.

The on-again, off-again programme has left some people crying 'conspiracy', as the original and second tenders were summarily dropped, following which Dredging International, China Harbour Engineering Company and Jan De Nul earned a ‘cartel’ penalty from the Competition Commission. A court challenge meant there was only time to arrange a temporary cut-down version to allow big ships access, and even that may eventually be found in contempt of court.

In the end, Prime Minister Syed Gilani put his oar in, intimating that modernising measures were needed to help protect people from food inflation, a big issue in Pakistan, and saying that the new terminal and facility weren’t much use without the required depth.

Elsewhere in Asia, Sri Lanka’s newly launched Hambantota is one of the largest development projects undertaken by the government, and may even challenge Columbo.

It’s part of Sri Lanka’s $6bn drive to rebuild the island nation's infrastructure after a quarter century of war and re-establish Sri Lanka as a trading hub.

But, besides providing competition for Columbo, it might also be actually getting into competition with the newly developing trading hubs of southern India. Vallarpadam in Kochi, for example, has billed itself as the answer to southern India’s transhipment bills, and is looking to its share of the traffic.

However, the fact Hambantota was yet another port built with China’s assistance meant India looked with suspicion at the $425m Chinese loan. Meanwhile, Colombo is negotiating for a further $800m loan for its own second phase as it is also keen to keep its market share.

 

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