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Customs duty hike cuts

80pc shipbreaking jobs

ARSHAD AWAN

KARACHI: The Increase in customs duty on unserviceable ships has reduced by 70 percent import of the vessels which resulted in 80 percent job cuts at the country's shipbreaking yards, according to knowledgeable sources.

"In the last budget, the government increased by 50 percent the duty on per light displacement tonnage (LDT) from Rs 1,000 to Rs 1,500, which has resulted in a massive cut in the import of unserviceable ships," said Amin Yasin, an independent shipping consultant. The increase in customs duty increased the suffering of the industry which was already facing multi-dimensional problems.

"The problems included valuation dispute between the government departments and the shipbreakers, duty differences, price hike of old ships. Now this 50 percent increase in customs duty is an additional pressure on the industry," Yasin said.

Chaudry Aminullah, a contractor, said the shipbreaking industry was forced to cut its labour upto 70 percent as small shipbreakers had totally vanished from the field.

"It is very painful to observe that shipbreaking in Pakistan, which was Asia's second biggest industry after Taiwan is in pathetic state because of weak official policies," Aminullah said. As many as 150 full time operating yards have now been reduced to only 20 to 25.

According to one survey the arrival of unserviceable ships at Gadani alone declined from 196 in 1986-87 to only 35 during 1988-89. During 1990-91 the number decreased to 19 ships.

Yasin said at the peak of the business years in 1982-83, the yards had employed over 35,000 workers, which were reduced to 1,000 in 1988-89.

An official spokesman of the Pakistan Shipbreakers Association said the association had already expressed its concerns to the official bodies, but a positive decision was yet to come from their side.

"We requested the Tariff Commission to cut short the customs duty and similarly asked other concerned departments to consider our grievances to save the industry," he said.