Port Qasim Authority (PQA) has floated tenders for a project called “Sea to Steel”, proposing a shipbreaking yard and steel plant at the old Iron Ore and Coal Berth (IOCB). The concession is structured as a 30-year Build, Operate and Transfer (BOT) arrangement, potentially extendable to 60 years.
The project is being marketed as a world-class green ship recycling facility.
Having served as Pakistan’s Federal Minister for Maritime Affairs, I find this proposal deeply troubling. Not because Pakistan does not need modern ship recycling or steel production, but because the location, commercial structure and procurement arrangements raise questions that deserve immediate public scrutiny.
I have examined the tender documents and the pre-bid clarifications. What I found should concern every Pakistani.
*Putting our energy lifeline at risk*
Port Qasim is not an ordinary commercial port. It is one of Pakistan’s most important energy gateways, handling LNG, petroleum products, coal and other essential industrial cargo.
According to PQA’s own pre-bid record, the proposed shipbreaking facility sits between the EETPL LNG terminal and the FOTCO oil terminal, with the LNG turning basin directly in front of it, along a 49-kilometre navigational channel operating around the clock.
Think about that for a moment.
Ships arriving for recycling are often ageing vessels nearing the end of their operational lives. Some can sail under their own power, while others require towage.
Now imagine towing a disabled vessel through this busy channel, past LNG carriers, oil tankers and commercial shipping.
One towline failure, one grounding or one vessel sinking in the wrong location could obstruct the channel and disrupt critical energy imports.
What happens if LNG supplies are interrupted? What happens to industries, power generation and the wider economy? Who calculates the financial consequences of even a temporary closure?
And most importantly, who takes responsibility?
I am not suggesting that maritime risks can ever be eliminated. I am asking why we should deliberately introduce additional risks into one of Pakistan’s most strategically important navigational corridors when an established shipbreaking industry already exists at Gadani.
*Follow the numbers*
The project’s commercial structure raises equally serious questions.
The proposed shipbreaking yard would reportedly dismantle approximately 150,000 light tons of vessels annually.
Yet the same project envisages trading 100,000 tons of scrap every month, equivalent to 1.2 million tons annually, alongside a steel plant with a production capacity of one million tons per year.
These figures describe three very different activities: ship recycling, scrap trading and steel manufacturing.
Scrap trading can, of course, involve material sourced from outside the shipbreaking yard. But that makes the commercial rationale even more important to examine.
Is this principally a ship recycling facility, a scrap trading operation, or a large steel manufacturing complex?
Why must all three activities be located at a strategic commercial port?
Has PQA independently assessed whether these businesses require valuable waterfront land and access to critical navigational infrastructure?
And who stands to benefit from this particular arrangement?
*Green in name or green in practice?*
Shipbreaking is an environmentally sensitive industry. Older vessels can contain asbestos, polychlorinated biphenyls (PCBs), heavy metals, oily residues and other hazardous materials.
Port Qasim operates in a sensitive coastal environment connected to the Indus Delta, with fishing communities such as Ibrahim Hyderi and Rehri Goth depending on the surrounding marine ecosystem.
Modern ship recycling can be undertaken safely, but only with rigorous environmental controls, appropriate containment systems, hazardous waste treatment facilities and independent regulatory oversight.
Where are the project-specific environmental assessments? Where are the approved waste management arrangements? Where are the emergency response plans and financial guarantees against environmental damage?
Calling something green does not automatically make it environmentally responsible.
*Now comes the most disturbing part: the procurement*
According to the tender documents, this project originated as an unsolicited proposal from a private proponent.
The PQA Board subsequently accepted the proposal and issued a Provisional Consent Letter.
That fact alone does not establish wrongdoing. Unsolicited proposals can sometimes introduce useful ideas. But when they involve strategic national infrastructure and concessions potentially extending across generations, transparency and competition become essential.
The bidding arrangements described in the documents raise serious questions.
The original proponent reportedly receives exemption from prequalification, five additional evaluation points and the right to match the best competing offer.
If these provisions operate as described, what meaningful competitive advantage remains for other bidders?
Why should an unsolicited proponent enjoy such preferential treatment in a public procurement process?
Who is the original proponent? Who are its beneficial owners? On what basis were these privileges granted, and under which procurement rules?
The public deserves answers.
*Was this project conceived to meet an independently identified national maritime requirement, or was the procurement process structured around a private commercial proposal?*
That is a legitimate question, and PQA should answer it publicly.
*Approval first, feasibility later?*
The pre-bid clarifications reveal another troubling issue.
Consultants reportedly pointed out that project-specific studies were unavailable. The last structural survey of the IOCB berth was conducted approximately two decades ago, and the existing information was acknowledged to be outdated.
One consultant reportedly described the berth as a very old structure that had outlived its useful life.
Yet this same infrastructure is being considered for a project that could operate for up to 60 years.
Where is the independent structural integrity assessment?
Where is the comprehensive navigational risk analysis?
Where is the detailed assessment of LNG terminal safety and the implications for surrounding maritime operations?
Where is the independent financial feasibility study?
Most concerning is the apparent sequencing of the process. Critical navigation, LNG safety and environmental assessments are envisaged after developer selection, with the developer financing those studies.
Developer-funded assessments are not inherently improper, provided their independence and regulatory oversight are protected. But that does not answer the more fundamental question.
*Why is PQA advancing a long-term concession before independently establishing whether the proposed location is technically, environmentally and commercially suitable?*
Surely feasibility should determine whether a project proceeds, rather than merely becoming another condition to satisfy after a preferred developer has emerged.
Consultants have also reportedly questioned the realism of the procurement timetable, while PQA has referred to significant time constraints.
What exactly is the urgency?
Who imposed these constraints, and why?
We are discussing a concession potentially lasting six decades, not the purchase of office furniture.
*The financial commitments deserve scrutiny*
The proposed financial structure raises further questions.
Pakistan Steel Mills reportedly retains priority rights over the IOCB berth, while land required for the steel plant is not entirely under PQA’s control.
At the same time, the bidding structure reportedly places considerable emphasis on guaranteed minimum payments, beginning at USD 18 million annually.
At that starting rate, the commitment would amount to USD 540 million over 30 years, even before accounting for any escalation.
Has an independent financial model demonstrated that the proposed activities can sustain these payments?
What happens if Pakistan Steel Mills is revived and requires priority access to the berth?
What happens if the necessary land cannot be made available?
What happens if environmental or navigational studies impose restrictions that fundamentally alter the project’s economics?
And what happens if the winning bidder subsequently discovers that its financial commitments are commercially unsustainable?
Pakistan has seen enough projects where ambitious promises eventually become requests for renegotiation, concessions and public-sector accommodation.
The highest financial offer is not necessarily the best deal for the country.
A responsible government must assess commercial viability, operational compatibility and long-term public value before committing strategic infrastructure.
*Too many red flags to ignore*
Consider the sequence.
An unsolicited private proposal.
Provisional approval before essential project-specific feasibility studies.
Preferential bidding arrangements for the original proponent.
An ageing berth with unresolved structural questions.
Critical navigational and LNG safety assessments deferred.
Unresolved land and operational rights.
And a concession potentially extending to 60 years.
*Individually, each of these issues demands an explanation. Taken together, they demand an independent investigation.*
This is not proof of corruption, nor should allegations replace evidence. But it is more than enough to justify serious scrutiny before public assets are committed.
Who proposed the project? Who recommended it? Who approved it? And on whose independent technical and financial advice?
These questions must be answered.
*What should happen now?*
First, both procurement processes should be suspended until an independent assessment establishes whether this project belongs at Port Qasim at all.
Second, PQA should publish the original unsolicited proposal, the Board’s decision, the Provisional Consent Letter, the evaluation criteria and the identity and beneficial ownership of the original proponent.
Third, the Ministry of Maritime Affairs and the Public Procurement Regulatory Authority should independently examine the procurement arrangements, particularly the preferential rights reportedly granted to the original proponent.
Fourth, independent feasibility, structural, navigational, LNG safety, environmental and financial studies should be completed before any long-term concession is awarded.
And finally, Pakistan must consider the alternatives.
*We already have Gadani. Why reinvent the wheel?*
Gadani has been a centre of shipbreaking for decades and provides employment to thousands of workers.
Instead of attempting to establish a new shipbreaking industry inside a critical commercial and energy port, why not modernise the industry we already have?
Invest in proper hazardous waste management facilities, modern equipment, worker safety, environmental protection and compliance with the *Hong Kong International Convention* for the Safe and Environmentally Sound Recycling of Ships.
Provide financing mechanisms that allow existing operators to upgrade their facilities and compete internationally.
That would be a meaningful contribution to Pakistan’s blue economy.
Meanwhile, the IOCB berth at Port Qasim should be evaluated for its original commercial purpose: handling bulk cargo, industrial raw materials and the future requirements of a revived Pakistan Steel Mills.
And if PQA genuinely wants to develop a new maritime industry, why not focus on ship repair and marine engineering?
Modern repair facilities, floating docks and supporting technical services could attract operational vessels, create skilled employment, generate foreign exchange and strengthen Pakistan’s maritime capabilities.
Ships sail in, undergo repairs, pay for services and sail out.
That is the kind of value-added maritime activity we should be encouraging at a commercial port.
*Our ports are national assets, not private experiments*
Pakistan’s blue economy remains one of our greatest untapped economic opportunities.
Our ports should be engines of trade, industry, logistics, employment and investment. They should connect Pakistan to international markets, improve competitiveness and strengthen our economic security.
We cannot afford to compromise critical infrastructure through projects whose location, feasibility and procurement arrangements have not been convincingly justified.
I am not opposed to private investment. Quite the contrary. Pakistan desperately needs credible private investment in its maritime sector.
But investment must serve the national interest, not the other way around.
Before committing Port Qasim’s strategic infrastructure for potentially 60 years, the federal government owes the people of Pakistan a transparent explanation supported by independent evidence.
*The question is simple: are we developing Pakistan’s blue economy, or are we allowing private commercial proposals to dictate how our strategic national assets are used?*
Wake up.
*Port Qasim is Pakistan’s energy lifeline, not a ship graveyard.*
Don’t screw up our blue economy. Build it properly.
Ali Haider Zaidi : Former federal minister for Maritime Affairs