PNSC urged to borrow $300 million from world market

The Planning Commission has opposed extending government funds andor public guarantees to Pakistan National Shipping Corporation (PNSC), and urged it to borrow 300 million dollars from the international market to upgrade its fleet, Business Recorder learnt here on Thursday.
According to the report, the PNSC Group achieved a turnover of Rs 1,732.951 million with Rs 585.349 million contribution from the PNSC during the first quarter (July-September 2009-10) against a total group turnover of Rs 3,562.810 million and Rs 1,385 million PNSC contribution in the corresponding period last year.
The decline in freight earnings was due to global shipping crisis, the report said, adding the gross profit for the period ending on September 30, 2009 was Rs 267.086 million as against Rs 535.55 million during the same period last year.
“With its contracts of affreightment for fuel and as the preferred carrier for Pakistani cargo (coal, wheat etc), the PNSC is in a position to borrow 300 million dollars from the world market on commercial basis, leveraging its unencumbered floating assets worth over 100 million dollars,” the Panning Commission’s Task Force on Maritime Industry said in its report. The PNSC is currently seeking assistance from the government to upgrade its fleet.
According to the report, no ship has been registered under Pakistan flag and the Task Force has recommended amendment to the Shipping Ordinance 2001 to facilitate private sector ship owning. After scrapping four ships, the corporation presently owns only 11 ships and is planning to induct more ships in the PNSC fleet.
According to officials, owing to ageing fleet, more ships would be scrapped and the PNSC would be allowed to purchase new ships to continue its operations. Due to global recession, the number of PNSC ships declined from 15 to 11 from March 2009 onwards.

Copyright Business Recorder, 2009