Senate body for expediting work on Gwadar Shipyard project

ISLAMABAD – Senate Standing Committee on Defence Production on Tuesday stressed expediting work on the Gwadar Shipyard project.

The committee called for the resolution of land issue in order to ensure that the land allocated catered for futuristic expansion.

It also called for enrolling and training manpower for the new shipyard as well as hiring reputed international firms for the construction of the shipyard as it met under the chairmanship of Senator Lt Gen (R) Abdul Qayyum HI (M) here at the Parliament House.

The committee was told that 750 acres of land had been marked, out of which 117 acres were owned by the government, and will be handed over in Phase-I, while the remaining 632 acres will be acquired from the owners and will be handed over accordingly.

The committee was told that draft MoU had been prepared and will be signed shortly after approval by the provincial cabinet in its meeting to be held on December 3. The committee observed that instead of signing the MoU, there should be a formal agreement and directed to hand over the 117 acres by 1st December and remaining land by 1st March.

750 acres of land had been marked. 632 acres will be acquired from the owners.

The committee appreciated the performance of Karachi Shipyard, which, it said, was not only self-financing organisation, but was also making tremendous contributions to country’s defence assets as it was working on four submarines and two service ships (freights).

The committee recommended that Karachi Shipyard should have the first right of refusal, but ensure that its work should be of superior quality, should be offered at reasonable rates, and must be completed within the stipulated period. It stressed that PNSC, PQA and KPT must be directed by the government to abide by this direction.

The meeting was told that as a result of the committee’s persistent follow-up of the issue of surplus electricity being wasted at Pakistan Ordinance Factory Sajjwal, the matter had been resolved.

The committee was told that contract between IESCO and POF had been signed and feeder construction had also been initiated.

It was told that as soon as the construction was completed, power generation would start and wheeling of surplus electricity will be done.  This will be the first wheeling project in the country and the Pakistan Ordinance Factory has expressed gratitude to the standing committee on the support provided.

The meeting was attended among others by Senators Nauman Wazir Khattak, Muhammad Akram, Nuzhat Sadiq, Taj Afridi, Gul Bashra, secretary defence production, managing director Karachi Shipyard and Engineering Works (KS&EW) and officials of POF and IESCO.

The committee during the briefing on projects, currently under execution or completed during previous years, observed that we are not a marine nation and consequently we haven’t given importance to developing our coastal belt. It is unfortunate that neighbouring India has 48 shipyards and Bangladesh has 23, while Pakistan has only 1 shipyard. Gwadar shipyard is on country’s development agenda for the last 12 years.

The committee chairman noted that the country needed a chain of shipyards as Pakistan’s coastline ran parallel to a very busy international maritime highway. “Two ideal sites are Gwadar and Port Qasim because the latter can spare about 1500 acres of land right on the sea channel contiguous to Port Qasim,” he added.

The committee noted that development or connectivity infrastructure always added to economic activity, job creation and hence prosperity. It also agreed that marine and maritime industry was very well-equipped to do general engineering works and construction of machinery for dams and barrages already being done by KS&EW was appreciable.

The committee was told by KS&EW MD that in 2006 the company was at a loss of 3.3 billion and since then it had boosted its business and is in profit currently. “KS&EW has so far built 448 ships of various sizes, designs and capacities.

Ships have also been constructed for foreign clients, including Abu Dhabi, Iran, Belgium, China, Saudi Arabia. A number of projects have been completed in the last 10 years,” the MD told the committee.

The committee was also briefed about the MILGEM project, underway at KS&EW, under which two ships will be built in Turkey and two in Pakistan.

Similarly under the project of Hangor Class, four submarines will be built in Pakistan and four in China.

The committee called for administrative plans and financial releases to be carried out well in time.

KS&EW DG told the committee that foreign orders can be arranged either by political engagement or by being competitive in international market and political commitment was needed for both.

The company’s profit in 2017-18 was Rs707 million and Rs619 million in 2018-19, but will steadily grow in the coming years when ongoing projects get near to completion and payments start rolling in. The committee asked KS&EW to come up with an evaluation of cash flow and accounting profit to understand how profits can be improved and more business can be gathered.

The restructuring of the ministry, a well-coordinated work among the government departments in order to do maximum possible construction work within the country, instead of importing machinery, were also discussed.