PQA faced Rs 580 million operational loss in 2008-09

The financial condition of Port Qasim Authority (PQA) is not “very healthy”, as the Authority faced an operational deficit of at least Rs 580 million during 2008-09. This is for the first time in more than a decade that the PQA faced operational deficit.
Moreover, high ups in the PQA believe that it was the cushion of other incomes contributed by rentals and interests on deposits that saved the Authority from facing a “convenient” net fiscal deficit. According to sources the PQA authorities were of the view that the economy of the once always-profitable organisation had started moving downward due to lack of financial planning and prudence observed during the last few years.
They said the new management of the PQA, operator of the country’s second largest port, Port Qasim, was also foreseeing an operational deficit of around Rs 286 million during the current financial year. The sources said the PQA authorities were attributing the rare operational loss primarily to the past “expensive ventures”, like an ill-planned maintenance dredging that cost the Authority around Rs 1.416 billion, an exorbitant price which was Rs 361.246 million or 34.22 percent higher than Rs 1.055 billion of 2007-08.
“An unnecessary delay in the materialisation of long-awaited capital dredging project had left the PQA management with no option but to say yes to the exorbitant rate of Rs 314.826 per cubic meter dredging against the last year’s Rs 211.094 at its channel,” they said. According to the sources the PQA management was also apprehensive of its other sources of income, like rentals and interests on deposits that fetched Rs 2,117.107 million during 2008-09, fearing that in future the same would gradually shrink due to withdrawal of deposit for undertaking the slow-paced development projects at the port. Proposing adherence to the financial discipline through the maximisation of operative revenue and minimisation of expenditures that during 2008-09 stood at Rs 4,094.047 million, the new PQA management had issued special directives to the concerned quarters to improve the situation, said the sources. “The PQA authorities also eye fallout effects of global financial downturn, slow-paced uplift projects and decline in cargo handling and overall trade as attributing factors to the operational loss,” they said. According to the PQA statistics the volume of cargo handled at the PQA during 2008-09 stood at 25 million tonnes against 26.4 million of 2007-08 marking a decrease of five percent.
The cargo throughput, however, witnessed a marginal increase of 0.2 percent than the planned targets during the same year, say the figures. With box trade standing at 680,291 TEUs, containerised traffic, marked the most vulnerable area during last year owing to global economic crisis, declined by 10 percent over 2007-08.
According to the figures out of total seaborne trade of 63.7 million tonnes the PQA share was 39.2 percent as against 41.5 percent of 2007-08. An unhealthy financial condition of the PQA has raised eyebrows in the ports and shipping circles with some port users expressing fear that the deficit was likely to adversely affect capacity of the authority to cut port wet charges. “As the port’s financial health is not good…a cosmetic thing is likely to come out of the ministry’s plan to decrease port charges,” said a shipping agent.

Copyright Business Recorder, 2009