FPCCI Disapproves Three-Fold Rise in KGTL Terminal Charges

FPCCI Disapproves Three-Fold Rise in KGTL Terminal Charges

Karachi, February 27, 2024 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly criticized the Karachi Gateway Terminal Limited (KGTL) for implementing a three-fold increase in terminal charges, raising concerns within the business community.

Saquib Fayyaz Magoon, the Senior Vice President of FPCCI, condemned KGTL for announcing a substantial hike in container terminal charges, which have surged from PKR 150 per metric ton to PKR 480 per metric ton since the management takeover of the container terminal at Karachi Port’s East Wharf.

Magoon insisted that KGTL must immediately rationalize its rates and urged the company to provide ample notice, ideally 2 to 3 months, before any future rate adjustments. He emphasized the necessity for KGTL to engage in a consultative process rather than making decisions in isolation.

Khurram Aziz Khan, the CEO of Karachi Gateway Terminal Limited, engaged with the FPCCI at their Head Office in Karachi to gather feedback and insights from the business community regarding the services and charges at Karachi Port.

Saquib Fayyaz Magoon stressed the need for a robust regulatory framework, asserting that shipping lines and container terminals should be subjected to effective oversight to prevent the exploitation of importers and exporters. Magoon highlighted that trade forms the backbone of any economy, and traders should not be subject to the whims of container terminals.

Asif Sakhi, Vice President of FPCCI, clarified that the apex body is exploring all available options and forums to address the issue, expressing the willingness to facilitate talks between KGTL and the business community.

The issue of LO-LO (Lift On – Lift Off) charges, which are not consistently included in overall freight charges, was highlighted by Asif Sakhi, emphasizing the need for a regulatory framework to ensure clarity and prevent increased costs for traders.

Asif Inam, another Vice President of FPCCI, stressed the importance of container terminals providing continuous traffic control, security, and first-aid services. He called for transparency in KGTL’s contracts and the mechanism for setting charges.

Zaki Aijaz, another Vice President of FPCCI, criticized KGTL’s approach, noting that their high-handedness is adversely affecting traders nationwide, given Karachi Port’s significance in the country’s shipping operations. Aijaz suggested that KGTL should focus on increasing volume rather than burdening clients with exorbitant rates.

In response to the concerns raised, Khurram Aziz Khan, CEO of KGTL, proposed the formation of a high-profile committee with FPCCI’s nominees to address grievances, complaints, issues, and feedback from the trading community. He detailed KGTL’s ambitious expansion plans, involving a substantial investment of $75 million in the next two years and an additional $100 million over the next five years to enhance infrastructure, machinery, and technology at Karachi Port.

Khan affirmed that KGTL, being under the legal jurisdiction of Pakistan, operates in accordance with its agreement with the Karachi Port Trust (KPT) under the Ministry of Maritime Affairs, aiming to bring world-class and efficient infrastructure to Karachi Port. The ongoing dialogue between FPCCI and KGTL indicates a pivotal moment in addressing the concerns of the business community and ensuring a fair and transparent business environment.