Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2017

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Keywords

Shipping, Pakistan

Executive Summary

Not all countries are blessed with sea ports. Pakistan is one of those countries who are blessed with it. Major port terminal business of Pakistan is driven from city Karachi, which is why Karachi is considered as heart of Pakistan. Most of the ports land comes under the ownership of KPT who is actually looking after and supervising all the port terminal activities in Karachi. KPT itself handles very minimum volume and major volume of the city is outsourced to different companies who handle the volumes and in return gets the revenue from shipping authorities and agents. Fixed lease rental and variable loyalties based on volume is paid by these companies to KPT. Karachi will soon be facing tough competition as two new ports are under construction and will soon be operational. Once these terminals will be operational and if the market size doesn't increase then this industry will face saturation and the company having better technology and customer relations will prevail.

Currently, Karachi enjoys its port business activities, However, Pakistan is also building a deep sea port, Gwadar in the district of Baluchistan. Development of this project was announced in 2002, when former Pakistani president General Pervez Musharraf pledged to develop this port.

It has been projected that Gwadar will get operational by 2018-20. Since Baluchistan is facing political and security instability, it will really challenging for government and army to maintain trust and securities in this province, they also need to ensure that interference from neighboring countries is mitigated from this province. For Gwadar equation is quite simple “No peace growth”.

Primary research is done on the gap analysis of imports/exports of Pakistan, problems faced by shipping companies and port terminals due to increase in this gap. Another primaiy research carried on Gwadar project, its importance and current development plans. This research carried by meeting with 15 experts who are in the field of port terminal or shipping business, conducted survey from Port terminal & shipping representatives/employees and trade finance group of bankers.

Secondary research was carried to design some strategy on how to resolve the import / export parity. For Gwadar, Secondary research is carried to identify points which needs to be considered while building state of the art port.

Secondary research suggests that Pakistan trade deficit is increasing over the last few years because of decrease in export of about 18% in last two years, imports has been showing increasing trend despite of decrease in crude oil prices internationally and depreciation of Pak to dollar and other currencies. Primary research suggest the Gwadar is a very good opportunity for Pakistan and right policies and commitment to complete the project with no further delay can bring prosperity in the country.

Research clearly states that in order to improve Pakistan’s balance of trade, we need to come up with policies that encourage exports. This can be done by providing subsidies to exports, removing electricity crises and imposing duties on luxurious items of imports and define strategy to increase industrialization in order to compete with the global products. A 5 year business plan is proposed for Ports & Shipping companies which will increase exports and reduce the potential revenue loss which they are facing currently.

Gwadar port needs to be developed along with other infrastructure facilities based on new technology ensuring plans are executed within time while keeping the tribal leaders in confidence. Also, Gwadar can be more beneficial if strategies are laid by bringing foreign investment and make Gwadar as industrial Hub and mega oil city in the next few years.

Pages

71

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