The Pakistan National Shipping Corporation (PNSC)’s vessel MV Hyderabad, which was seized at Port Elizabeth earlier this month over its long-pending arrears at the Pakistan Steel Mills (PSM), has been released after a guarantee of $14 million was provided by the Ministry of Finance, officials familiar with the development said on Sunday.
The PNSC vessel, leased to International Brokerage House, had anchored at Port Elizabeth for refuelling when it was seized on August 22 on a court order issued in regards to a freight default case against the PSM.
The steel mills, officials said, signed an agreement with the South African company for iron ore supply in 2009. However, this deal could not continue. The South African firm contended the PSM and PNSC were both owned by the government and it should pay its dues of $14 million to get its ship released.
The PNSC had approached the Finance Ministry and Foreign Office to either pay the money or give a surety to the foreign company so that the ship might be released.
The PNSC ship was sailing to the port of Pedro and made a stop at a South African port for refuelling. The court’s order for seizure of the vessel was issued after a case was filed by a Singaporean shipping company against the PSM over it failure to pay freight against the haulage of iron ore in 2008.
The PSM had engaged the company in 2008 for the haulage of one million tonnes of iron ore from South Africa. PSM could not make the freight payments of $7.5 million.
The company had stopped the haulage of ore after making four out of six trips, as PSM failed to make the required payment.
The court ordered a payment of $7.5 million freight and also ordered PSM to pay $6.5 million in interest to the company, said PNSC’s official.
“After negotiations lasting several days, the finance ministry provided the guarantee of $14 million for releasing the ship MV Hyderabad,” said PNSC’s Executive Director Brig (r) Arshad Siddiqui.
The Ministry of Finance would move a summary to the Economic Coordination Committee (ECC) for formal approval of the $14 million as guarantee.
After ECC’s approval, the money would be transfer to the Singaporean shipping company, officials added.