German footprints in Pakistan

Majyd Aziz

PAKISTAN has three seaports. Karachi, the oldest, is the Gateway to Pakistan; Port Qasim addresses the overflowing ship and cargo movements that regularly chokes its senior Karachi counterpart; Gwadar Port in Balochistan is on its way to become the pride of Pakistan and the convenient facilitation center for China, Central Asian Republics, and even Afghanistan. Then there is the futuristic Keti Bunder Port, albeit still on the drawing board and in government files. In essence, Pakistan is endowed with these pearls that are strategically located and obviously of immense importance in the region as well as for the movement of global trade.

PAKISTAN has massive deposits of metals such as antimony, chrome ore, copper, gold, iron ore, manganese, and zinc lead to name a few. In non-metallic, Pakistan has deposits of aragonite, marble, basalt, agglomerate, granite, onyx marble, different kinds of clay, barite, dolomite, feldspar, gypsum, limestone, phosphate, quartz, pumice, rock salt, silica sand, soap stone, and of course, coal. Over the past many decades, the nation has gradually inched her way to become a reliable exporter of minerals and, furthermore, the quality of minerals has been universally accepted as gradually conforming to international quality and requirement standards. The major drawbacks in mining are the non-availability of competent technical workforce, the total reliance on antiquated and manual mining mechanisms that results in inconsistency of quality and productivity, the lack of quality assurance testing services at mine mouth or within the proximity, the low availability of transportation resulting in higher trucking charges, and the difficulty in accessing the mines due to non-existent road network.

PAKISTAN desperately needs huge investments in augmenting the present trucking capacity. The perennial shortage of trucks, dumpers, trailers, and even vans has stymied the movement of goods and commodities all over the country. Road transport has become imperative to cater to the Afghanistan Pakistan Transit Trade Agreement, ISAF/NATO forces based in Afghanistan, and cross-country transportation of petroleum, coal, cement, fruits, and machinery, to name a few essential items. Moreover, with the advent of China Pakistan Economic Corridor and its expected economic potential, there would be a huge demand for vehicles to move the cargo.

PAKISTAN does have political, economic, social, and technological (PEST) issues that are a matter of grave concern and have dampened the desired progress. Reliance on external financing with unachievable conditionalities, continuous shortages of infrastructure, ineffective population control mechanism, influx of over 3.50 million Afghan refugees that have been a perpetual burden on resources, the ominous threat of terrorism and extremism, and lack of vision in providing employment opportunities for the youth bulge are overarching factors that are negatively impacting and desperately needing pragmatic solutions.

PAKISTAN however has natural and physical resources that are now being progressively harnessed to get the 200 million strong nation out of the economic morass and propel it into the domain of emerging developed nations. CPEC, a $46 plus investments, loans, and joint ventures package from China, is not just a small step but also a giant leap towards economic deliverance. The two most important projects for Pakistan are the Gwadar Port and Thar Coal. The third project that would bring fabulous benefits, if properly and realistically managed, would be the minerals that are in abundance all over the country, especially in Balochistan and Khyber Pakhtun Khwa Provinces.

The success and long-term viability of these projects, and many more, depend highly on the efficient operations of all the three seaports as well as the readily availability of multi-modal transportation. These ports have to be working 24/7, with advanced equipment and processes, with addition of new facilities such as berths, modern warehouses, utilities, with trained and skilled manpower, and with a focus on globally competitive rates. These ports require continuous entry/exit of trucks to ensure fast track movement of discharged cargo. The minerals sector can become a substantial provider of foreign exchange through exports if the mines are modernized, accessible, and cost effective.

 These are areas where investors, suppliers, and financiers from Germany have to zero in, more so if they want to take long term profitable and worthwhile advantages. It is meaningful to understand that German manufacturers are well placed to provide top of the line machinery, equipment, and vehicles that are essential to upgrade these sectors as well offer the technology, skills and experience that are crucial for Pakistan's economic drive.

Karachi Port is a deep natural port with an 11.5 km-long navigable channel and a 12.2 meter-deep approach channel and provides round the clock safe navigation to tankers, modern container vessels, bulk carriers, and general cargo ships upto 75,000 DWT. The port has 30 dry cargo and three liquid cargo handling berths including a privately operated modern container terminal – the Karachi International Container Terminal (KICT). In financial year 2015-16, the port handled 50 million tons of cargo comprising 15 million tons of liquid and 35 million tons of dry cargo, registering a growth of over 15% compared to the previous year, and closing at nearly 2 million TEUs. 1893 ships berthed at the port in 2015-2016 compared to 1732 in 2014-2015.

Port Qasim is Pakistan's second busiest port and currently caters for more than 40% of seaborne trade requirements of Pakistan. The port is accessible through a 45 km long channel marked by channel buoys up to 11-meter draught vessels. It has excellent multi-modal connections with rail/road network and in future, when the Coal Terminal becomes operational, it would be the port of call for ships laden with coal cargo.

Gwadar port is set to be at "full operation" by the end of 2016, and will handle roughly one million tonnes of cargo going through it by 2017, most of which will consist of construction materials for other CPEC projects. Gwadar is projected as the heart of CPEC and the Chinese management company plans to expand the port's capacity to 400 million tons of cargo per year. Long terms plans for Gwadar Port envisages upto 100 berths to be built as and when demand increases. Under CPEC, Gwadar Port will expand its infrastructure with construction of nine new multipurpose berths on 3.2 kilometers of seafront to the east of the existing multipurpose berths. There will also be cargo terminals in the 12 kilometers of land to the north and northwest of the site along the shoreline.

Reputable German companies, such as Liebherr or SANY, are globally recognized as specializing in the development and manufacturing of high tech port equipment. According to its website, Liebherr supplies a wide range of high-quality maritime cranes for all types of goods handling in ports and at sea. The products include ship-to-store container cranes, rubber-tired and rail-mounted gantry cranes, straddle carriers, mobile harbor cranes, reach stackers, ship cranes, floating cranes and offshore cranes. In fact, one mobile crane is already installed at Karachi Port by a private cargo handling company. It is estimated that the country realizes a saving of $8-10 per ton if this crane is utilized. SANY informs on its website that they are assembling the Reach Stacker range and producing Empty Container Handlers and Heavy Duty Forklifts. It currently offers the best paint quality in the industry and its paint shop is equipped with the latest technology and guarantees the highest painting standards by applying four layers of coat to the machines. An intensive marketing and orientation campaign must be initiated by these companies for the introduction of their equipment at all three Pakistani ports.

PAUS is a company that specializes in mining equipment. It makes a Telescopic Swivel Loader that can transform the antiquated mode of mining prevalent in Pakistan. The road accessibility to most of the mines is a harrowing experience and requires movement of smaller vehicles for loading the minerals, thus adding to the cost. This Loader has multiple functions including an articulated steering that makes maneuverability easy even at restricted road conditions. For coal miners, there is a higher risk of explosion in mines due to the development of gas. PAUS vehicles are therefore also available with explosion protection. PAUS dinting machines cut tension relief slots into the roof, to minimize bed convergence, tunnel construction, and to improve gallery safety and impact resistance. Liebherr specializes in equipment for extraction of minerals in opencast mining environment and its hydraulic excavators are internationally known for their performance and productivity.

Pakistan has less than 400,000 mini trucks, light trucks, medium, heavy, as well as super heavy trucks including loaders, dumpers, and trailers. As per conventional wisdom, taking into account the flow of cargo and commodities traffic as well as the obsolete and unserviceable vehicles, there is a shortage of between 90,000-100,000 vehicles at this moment. The world's top two truck manufacturers are Daimler AG and Mercedes-Benz, both highly recognized German brands. Number four is Volkswagen Group that markets under the brand names Volkswagen, MAN, and Scania. German investors and even these brands could set up trucking joint ventures to cater to the increased cargo traffic.

The reason for mentioning these various German companies is to demonstrate the huge potential available for enhancing German presence in Pakistan. Germany is a valuable bilateral trade partner and it is imperative that Germany must and should participate in Pakistan's progressive economic future. Moreover, the biggest reason for Pakistan’s immense geo-strategic importance is quite simple: its people. Pakistan has one of the largest, youngest, and most rapidly growing populations in the world.

The dividend for both countries could be summarized in a PEST analysis. As the largest economy in European Union, Germany can play a prominent and defining role in impressing upon Pakistan the political imperatives to maintain the democratic environment in order to obtain maximum support in continuation of the GSP Plus status. Germany can, and does, offer economic assistance through substantial financial credit at low markup rates for procurement of German products, especially machinery and equipment. Germany is already a major supporter of social projects through Gesellschaft für Internationale Zusammenarbeit (GIZ) to institute pragmatic reforms in skill development of workers, in formulation of world class curricula, in health, in family planning, and in basic education sectors. At the same time, Germany is assisting in transfer of technology through vocational training, through imparting and providing access to technological innovations and ideas via various mechanisms, and through programs where experts provide knowledge-based information at seminars and orientation events. In March 2016, Germany agreed to provide €125.70 million comprising of grant of €98.7 million and soft loan of €27 million in various sectors including health, energy, and technical and vocational training.

I want to conclude this write-up on a personal note that is a manifestation of German excellence in quality, technology, and reliability. It was in 1956 when my family became owners of our first Mercedes-Benz. We used to live in Mithadar, the old section of Karachi, with its narrow lanes, with the hustle-bustle of pedestrians walking on these lanes, with donkey and camel carts obstructing traffic, and with cyclists moving in all directions. We were the only ones in the neighborhood to have a car, what to talk about Mercedes-Benz.

What can one say about Mercedes-Benz? When one is a small kid, it is just another car, albeit bigger than the previous one. When one is a teenager, it is an ego trip. When one enters adult life, it is royalty without a realm. This is what Mercedes-Benz really means to people like me.

There has been, except for a gap of few years, a Mercedes-Benz in our garage. It was my grandfather's prime choice of a vehicle. It was my father's desire to own one. And, it continues to be our precious asset to possess this car. Notwithstanding the importance of owning a Mercedes-Benz, the fact is that it also creates a favorable impression when we escort our foreign guests on their visits to Pakistan and to our businesses.

As I complete my 66 years and enter a new phase in my life, I have now few objectives to attain and few targets to meet. One of these is to present a Mercedes-Benz to my spouse. Why? Well in the early 1970s, when I returned after studies in USA, I gave driving lessons to my then fiancée in our Mercedes-Benz. How many Pakistanis do you know who would even dare to take this risk? But then, the lady was going to be my wife, and for her, everything should be the premier grade.

I have many memorable moments of our various models of Mercedes-Benz. All I can say is that not only Mercedes-Benz is in a class by itself, it is the ideal car in so many respects. This fact . . . only the owners of Mercedes-Benz can recognize and appreciate. As the famous American singer said, "Oh Lord, won't you buy me a Mercedes Benz." Need I say more?