Govt paying subsidy for wheat, urea transportation from Gwadar Port

KARACHI - The federal government has paid a subsidy to the tune of Rs 5.21 billion for transportation of wheat and urea from Gwadar Port to other parts of the country at the rate of Rs 2200 per metric ton because of non-availability of hinterland connectivity, The Nation has learnt. This expenditure was incurred to transport 2.638 million metric ton cargo through Trading Corporation of Pakistan as well as to make the Port operational instead of investing on the development of connectivity infrastructure. Moreover, the TCP has also borne Rs52 million additional cost to offset the total cargo at the ratio of Rs 110,000 for the handling of every 50,000 MT cargo. The total TCP cargo handled at the Gwadar Port is of Trade Corporation of Pakistan (TCP), including 1, 409, 498 MT of urea since December 2008 and 958, 717 MT of wheat since March 2008. TCP Chairman Saeed Ahmed Khan when contacted confirmed that the transportation cost Rs 2200 per MT is being borne by the government in order to make the Gwadar Port functional. A copy of letter written by the former Chairman TCP Muhammad Saeed to Secretary Commerce Syed Asif Shah, available with The Nation, pleaded for reviewing the decision of importing wheat and urea through Gwadar Port due to the extra inland transportation charges. The letter further states that the cargo transported from Gwadar to Karachi was @ 2200 per MT in March 2008 of one shipload of 50,000 MT, and the cost comes to Rs 110 million as worked out by the Ministry of Ports and Shipping. It informs that in pursuance of the Prime Ministers directive No 2206 of July 4, 2008 wherein it was stated that 1/3rd of the entire imports of 2.5miilion tons must be channelised through Gwadar port, the Purchase and Price Evaluation Committee said 'the quantity of 166,000 tons of Gwadar should not be imported due to higher handling and transportation cost, and should preferably be routed to Karachi. The said decision of the Purchase and Price Evaluation Committee was taken at its August 6, 2008 meeting of the Economy Monitoring Committee on import of wheat. The above mentioned three tenders were of W G Grain on June 14, 2008; Exim Grain on July 24, 2008; and Agrocorp on 30th August 2008, with the offers of US$ 387.90 per MT, US$ 374.74 per MT, and US$ 359.75 per MT respectively. 'The inland transportation cost from Gwadar to Peshawar as compared to Karachi is higher by Rs 2250/PMT, the letter disclosed. Moreover, a meeting headed by Secretary Ministry of Ports and Shipping was held on 27th of August, 2008 to sort out the issues incremental cost at Gwadar Port in which it was said that the only incremental cost to be picked up by the government would be on account of transportation. The meeting further declared that the quantum of additional cost on account of transportation worked out was Rs 110million that figured out by multiplying the average cost per MT as per latest transportation tenders for Gwadar to Karachi with the shipload of 50,000 metric ton.