ISLAMABAD: Operationalisation issues of the Pakistan National Shipping Corporation (PNSC) are negatively affecting the positive yields of the contract of afrieghtment (COA) with the Pakistan State Oil.
The PNSC and PSO entered into a memorandum of understanding (MoU) in August 2012 and thereafter, signed a Contract of Afreightment (COA) after two months, i.e in October, followed by an Addendum in January last year. However, a well placed source at PNSC, revealed to this scribe here on the other day that issues pertaining to the operationalization of the Shipping Corporation had proved real hurdle in bringing yields of the said COA. The COA was stated to be “evergreen” but at the same time was valid for a period of three years and then automatically extended for another period of three years with mutual consent unless a notice of termination is .served.
“As per COA, PNSC had to transport PSO’s Furnace Oil in an estimated quantity of three million tonnes per annum (MTPA) plus/minus 10% which after the Addendum was extended to include transportation of Motor Gasoline (estimated quantity of 1MTPA) and Low Sulphur Fuel Oil,” the source added. However, the source said that inefficiency on the part of PNSC as well as lack of vessels and ill equipped vessels chartered by PNSC, both the signatories had faced numerous difficulties and issues,” the source added.
It is worth mentioning that COA between PSO and PNSC was signed to promote local shipping industry including but not limited to shipping agencies, shipping lines would flourish and was in lieu with the decision of the Economic Coordination Committee (ECC) of the Cabinet, however, various parties several challenged the awarding of the COA at Sindh High Court on the ground of lack of procurement process being followed as per the PPRA Ordinance, 2002 and Public Procurement Rules, 2004 was raised, but PSO and PNSC being Respondents in the said Petition also made their respective submissions and those have been reserved by the court orders.
It is pertinent to note here that PNSC is the national flag carrier managing a fleet of 08 vessels, with head office in Karachi. A regional office based in Lahore caters for upcountry shipping requirements. The Corporation also has an extensive overseas network of agents looking after its world-wide shipping business.
Likewise, the PSO is the largest Oil Marketing Company (OMC) in the country, with a market share of over 60% of the total oil market, serves a multitude of customers across the retail, power, agriculture, aviation, marine and defence sectors. PSO, also the country’s largest Company in terms of turnover, serves around 3 million customers every day across the entire economic value chain. It is involved in import, storage, distribution and marketing of a range petroleum products including gasoline, diesel, fuel oil, jet fuel, LPG, CNG and petrochemicals.
