Daily Times

KARACHI: Ministry of Ports & Shipping and national flag carrier Pakistan National Shipping Corporation (PNSC) are at loggerheads with each other on purchase of two oil tankers for expansion of its fleet, a source told Daily Times on Monday.

Despite passage of one and half years, PNSC is unable to purchase two ‘Aframax Class’ oil tankers that were approved by the board, source said, adding. “It is so intriguing that inquiry may be conducted to pin-point responsibility.” The reason being national flag carrier – PNSC loss substantially in chartering of vessels, whereas its own vessels were earning profits, source said.

Financing was also arranged from NIB-led consortium for the amount that remained un utilized, the source informed.

Federal government should conduct inquiry for delay in purchasing of two oil tankers by professional maritime experts who can identify quantum of loss suffered by the corporation.

Interestingly, due to delay by the ministry, former chairman PNSC, Siddique Memon gave approval for purchase of two Aframax oil tankers. He is now Sindh chief secretary.

In April 2015, PNSC chairman had shown interest for the purchase of two oil tankers for expansion of corporation’s fleet to cater the increasing demand of cargo. Immediately after his announcement in media, ministry wrote a letter telling PNSC that it needs its prior approval before purchasing any vessel.

In January 2015, PNSC entered into ‘Bare-board Charter’ it pays to owners and could build its own asset (ships). The transportation of Oil is lucrative venture and corporation is enjoying the right for refusal of crude oil and petroleum products cargo sanctioned by the federal government.

Presently, PNSC operates a fleet of nine vessels with an average age of 11 years. Of these 11 it owns five bulk carriers and four oil tankers. There is no cellular ship for container transportation. National flag carrier is making loss on dry cargoes handling, due to Baltic Dry Index (BDI) that is relatively on higher side at 681 points in August 2016.

When contacted senior official in PNSC told this scribe that “The ministry of ports and shipping was creating hurdles for last 15 months in purchase of two oil tankers.”

“Senior official in the ministry created delays on ‘transparency ground’ which is unnecessary because the corporation is following Rule 42(d) of Public Procurement Regulatory Authority (PPRA) 2004 on ‘negotiated tender’ based on standard operating procedure (SOP) of PNSC in every vessel purchase.”

“PNSC has sent complete details of vessels it purchased to National Accountability Bureau (NAB) for clearance and or any objection,” said source.

“Due to unnecessary delay, corporation opted for chartering of vessels as it could not wait for business to drain,” source said, adding, this is the right time for purchase of tonnage (Vessel) as its price in international market is rock bottom. Aframax Class oil tankers price was $65 million few years back and currently, tonnage cost looms around $25 million to $28 million of a 10 year old, double-hull oil tanker of 95,000 to 110,000 dead weight tonnage (DWT).