News Paper: Business Reorder
KARACHI (July 27 2010): Pakistan is losing revenue because of an increased involvement of the National Logistic Cell (NLC) in the freight forwarding activities at the Afghan Transit Trade (ATT), said Chairman Pakistan International Freight Forwarders Association (PIFFA) Tariq Mehmood Chaudhry.
Addressing a press conference on Monday he said, though around 35 percent of cargo of the ATT has already been diverted from Pakistan to other countries/routes because of delaying transportation tactics and an unfriendly bureaucratic system, the unfair and monopolistic role of the NLC in the freight forwarding activities would also cause more diversions of trade from the ATT.
Tariq said the role of the NLC as a transporter for the non-commercial cargo in transit to Afghanistan, as mentioned in CGO 12/2002 Para 31 (viii), was against the freedom of business rules. He said the role of the NLC was against the law of fair/transparent business ethics and also the basic rights of individuals as per the constitution.
The involvement of the NLC has resulted in diversion of considerable business to other foreign competitors via other international routes, resulting in substantial loss to the national economy in the form of foreign exchange, and a loss to the affiliated businesses and also the national tax network, he added.
"At present the NLC is charging fees/commission 15 percent with 2 percent net on their self prescribed rates for destinations in Afghanistan (not being the function of the NLC) to issue NOC for the cargo/goods to be transshipped/transit, since the NLC does not have its self owned vehicles for this Afghan transit sector, the client has to arrange and pay to the transporter from the open market, thus this fees/commission is a substantial addition to the actual transport cost," said Tariq.
Besides, he said, all the risks, responsibilities, rules, regulation has to be borne by the agent/holder of the NOC, and the NLC does not take any responsibility for any risk or liability to the cargo, despite collecting their above mentioned charges. Since the last three months, the chairman PIFFA said, the NLC's dry port office in Karachi was trying to monopolise its role in this business by issuing various notifications/policy etc from time to time.
Appointing HMT contractors with a self prescribed higher transport rates as compared to the prevailing market rates and that too for a fixed period, and the fixing of rates for the destinations in Afghanistan, is not their jurisdiction, he added. For the clients, according to the chairman PIFFA, the proposed rates would be higher than the HMT contractor rates, thus it is estimated that the net result, for the client/customer, would be that the cost of transport would be 70 percent more than the present market rates.
"The 100 percent advance payment for a destination in Afghanistan to be submitted to the NLC for obtaining the NOC, we are paid by our clients a maximum advance of 50 percent; secondly it would also create a problem for us to send foreign exchange remittances to the service providers in Afghanistan, in case if we receive 100 percent advance from our principal," added the chairman PIFFA.
While demanding the concerned authorities to take notice of the issue, he said, the role of the NLC should be restricted as a regulator to ensure safe and efficient transport for the Afghan transit trade. Besides the NOC's should be issued in all categories ie commercial, US Army, Isaf/Nato, oversize cargo etc, in order to save time and money.
In reply to a query that whether the association would do if the demands were not met, Convenor of PIFFA Standing Committee on "Afghan Transit Trade" Yawar Badar said the PIFFA would got to the courts if the issue was not resolved. To a question he said the country was generating $40 to 50 million through ATT with the shipment of around 8 thousand containers a month carrying the goods worth $2000 to $3000 per container.
Addressing a press conference on Monday he said, though around 35 percent of cargo of the ATT has already been diverted from Pakistan to other countries/routes because of delaying transportation tactics and an unfriendly bureaucratic system, the unfair and monopolistic role of the NLC in the freight forwarding activities would also cause more diversions of trade from the ATT.
Tariq said the role of the NLC as a transporter for the non-commercial cargo in transit to Afghanistan, as mentioned in CGO 12/2002 Para 31 (viii), was against the freedom of business rules. He said the role of the NLC was against the law of fair/transparent business ethics and also the basic rights of individuals as per the constitution.
The involvement of the NLC has resulted in diversion of considerable business to other foreign competitors via other international routes, resulting in substantial loss to the national economy in the form of foreign exchange, and a loss to the affiliated businesses and also the national tax network, he added.
"At present the NLC is charging fees/commission 15 percent with 2 percent net on their self prescribed rates for destinations in Afghanistan (not being the function of the NLC) to issue NOC for the cargo/goods to be transshipped/transit, since the NLC does not have its self owned vehicles for this Afghan transit sector, the client has to arrange and pay to the transporter from the open market, thus this fees/commission is a substantial addition to the actual transport cost," said Tariq.
Besides, he said, all the risks, responsibilities, rules, regulation has to be borne by the agent/holder of the NOC, and the NLC does not take any responsibility for any risk or liability to the cargo, despite collecting their above mentioned charges. Since the last three months, the chairman PIFFA said, the NLC's dry port office in Karachi was trying to monopolise its role in this business by issuing various notifications/policy etc from time to time.
Appointing HMT contractors with a self prescribed higher transport rates as compared to the prevailing market rates and that too for a fixed period, and the fixing of rates for the destinations in Afghanistan, is not their jurisdiction, he added. For the clients, according to the chairman PIFFA, the proposed rates would be higher than the HMT contractor rates, thus it is estimated that the net result, for the client/customer, would be that the cost of transport would be 70 percent more than the present market rates.
"The 100 percent advance payment for a destination in Afghanistan to be submitted to the NLC for obtaining the NOC, we are paid by our clients a maximum advance of 50 percent; secondly it would also create a problem for us to send foreign exchange remittances to the service providers in Afghanistan, in case if we receive 100 percent advance from our principal," added the chairman PIFFA.
While demanding the concerned authorities to take notice of the issue, he said, the role of the NLC should be restricted as a regulator to ensure safe and efficient transport for the Afghan transit trade. Besides the NOC's should be issued in all categories ie commercial, US Army, Isaf/Nato, oversize cargo etc, in order to save time and money.
In reply to a query that whether the association would do if the demands were not met, Convenor of PIFFA Standing Committee on "Afghan Transit Trade" Yawar Badar said the PIFFA would got to the courts if the issue was not resolved. To a question he said the country was generating $40 to 50 million through ATT with the shipment of around 8 thousand containers a month carrying the goods worth $2000 to $3000 per container.
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