Karachi Port's new 15 pc reduced fee comes into force

Karachi: The Karachi Port Trust (KPT) has enforced a new port tariff, which goes into effect from Saturday. The new tariff is 15 percent less as compared to previous levy, which would further enhance its handling capacity.

The present reduction is second in last three years. This incentive should also result in more trade activities at the Karachi Port, which handles almost 70 percent of national trade.

The wet charges as they are called pertain to ships calling at the Karachi Port and consist of charges like port dues, pilotage, berthing and use of KPT tugs. These dues are charged in US dollars and, therefore, constitute a major part of KPT's revenues.

Traditionally, wet charges have always gone up. It was for the first time in 2003, that the KPT reduced its wet charges by 15 percent. After this revision charges paid by 20,000 Gross Registered Tonnage (GRT) ship would reduce by 11.40 percent, thus, providing leverage to consignee and shippers for negotiating their freights.

This loss of revenue would increase the number of ships and cargo volume at the port. So far, the Karachi Port has handled an increased 35 percent growth of dry cargo along with unprecedented rise of containers by 25 percent.

The KPT Board of Trustees, in a meeting on April 26, approved the reduction in port charges. The cumulative 30 percent reduction in KPT's wet charges are likely to benefit traders at large and make the port more cost-effective.

The first reduction in port charges in the KPT's history had taken effect in January 15, 2003. The tariff cut at that time focused on simplifying procedures, removing arbitrary discretion's and rationalising the ratio between wet and dry charges.

In the past the KPT had abolished all overtime charges at the port. The move aimed at providing relief to port users besides bringing transparency in the functioning of the port. All stakeholders had been consulted before announcing the tariff reduction.