Pakistan’s Maritime Sector Faces Rs5 Trillion Annual Loss Due to Underutilization and Malpractices
Islamabad: Pakistan is incurring an annual loss of nearly Rs5 trillion (Rs5,000 billion or $18 billion) in its maritime sector due to underutilized ports, tax evasion, malpractices, fake billing, misuse of Afghan Transit Trade, and a lack of value addition, according to a high-level task force report.
An informed government source, citing the report presented to the prime minister, revealed that underutilized ports cost the exchequer Rs3.19 trillion, while tax evasion within the maritime sector accounts for Rs1.12 trillion in losses. Additionally, Rs313 billion is lost due to malpractices and fake billing, Rs70 billion is missed due to restrictions on trans-shipment (the process of moving goods from one port to another or to destinations such as Central Asia and China), Rs196 billion is uncollected due to a lack of warehousing and value addition, and Rs60 billion is lost annually due to the misuse of Afghan Transit Trade.
Despite its vast potential and geo-strategic advantages, Pakistan has failed to fully exploit its maritime sector, the report noted. None of the country’s ports rank among the world’s top 60, with Karachi Port Trust (KPT) ranked 61st and Port Qasim Authority (PQA) standing at 146th.
The demand for port services in Pakistan has grown at an average rate of 3.3% per year over the past decade. KPT remains the busiest port in the country, handling over 60% of imports and exports. However, it is operating at only 47% of its total capacity of 125 million tons, with tax collection in the past five years fluctuating between Rs660 billion and Rs1,470 billion.
Similarly, PQA, which manages 35% of the country’s cargo, utilizes only 50% of its total 89 million tons capacity, generating tax revenue ranging from Rs690 billion to Rs1,140 billion over the last five years.
The Gwadar Port Authority (GPA), following the completion of its first phase, currently has a capacity of 2.5 million tons, which is expected to increase to 400 million tons by 2045 after the completion of its third phase.
The report emphasized that Pakistan’s coastline holds the potential to be an economic powerhouse. The ongoing “Red Sea” crisis was identified as an opportunity for Pakistan to leverage its strategic location to enhance its maritime sector.
Global shipping giants such as Maersk, DP World, and Hutchison Ports have recognized this potential, offering investment in maritime infrastructure to secure their financial interests while using Pakistan as a trade channel.
The report also highlighted a decline in the number of trained Pakistani seafarers, despite the global demand for around 1.9 million professionals in the shipping industry. Additionally, it pointed to the tourism potential along the coasts of Makran and Sindh, which boast stunning beaches, historical sites, and archaeological landmarks. If properly developed, these areas could generate significant revenue for the country.
Moreover, Pakistan’s exclusive economic zone, spanning over 240,000 square kilometers and officially recognized by the United Nations, is rich in seabed resources, including oil, gas, and minerals. The report stressed the need for a long-term strategic plan to explore and integrate these resources into the national economy through sustained policies, infrastructure development, and human resource investment.
