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Pakistan to impose Nato transit tax following 'friendly fire' troop deaths

Plan to tax all supplies sent through Pakistan territory is latest retaliation for soldiers shelled by US helicopter

• Saeed Shah in Islamabad
• guardian.co.uk, Wednesday 14 December 2011 14.12 EST
• Article history  GUARDIAN

Pakistan officials keep Nato supply trucks waiting for clearance to cross the border into Afghanistan. Photograph: Wali Khan Shinwari/EPA

Pakistan is drawing up plans to tax Nato for using its territory to supply troops in Afghanistan, in retaliation for the recent death of its soldiers in a "friendly fire" incident on the border.

Under the proposal, a transit tax or fee will be imposed on every shipping container sent through Pakistan, senior military and civilian officials have told the Guardian. The move follows the death of 24 soldiers shelled by a US helicopter at a checkpoint last month.

The tax is likely to add tens of millions of dollars a year to the cost of the decade-long war.

It is thought that the government would levy around $1,500 (£970) per shipping container sent through Pakistan, along with separate charges for each fuel tanker that goes through to Afghanistan.

Islamabad suspended the movement of Nato supplies to the landlocked country altogether after the deaths on 26 November. The tax on Nato supplies would provide Pakistan with a face-saving way of reopening the route. Following the deaths at the border, Pakistan also terminated the American use of a small airbase, Shamsi, and boycotted an international conference on Afghanistan.

The international coalition in Afghanistan has benefited from free transit of goods through Pakistan for nearly a decade, under agreements forged with Islamabad soon after the overthrow of the Taliban regime. Although the coalition has reduced its logistical dependence on Pakistan over the last few years, around a third of supplies are still trucked through Pakistan, which is the cheapest route to Afghanistan.

A senior Pakistani official said that the free transit of US and Nato military supplies was allowed under two agreements signed in 2002, when dictator General Pervez Musharraf was ruling the country.

"Under the agreement, Nato got to use our transport infrastructure for no cost, but what we got in return, we don't know. It is high time to revisit the agreement," said the official, who did not want to be named, as the new policy has not yet been announced. "The agreement appears to be one-sided."

The levy would also confirm the dramatically changing nature of Pakistan's ties with its western partners, from a strategic alliance to a transactional relationship, with deep suspicions on both sides. The prime minister, Yousaf Raza Gilani, said on Wednesday that "tougher" new rules of engagement were being worked out with Nato, "with the aim of providing more respect to our sovereignty".

There is intense anger in the Pakistani military over the deaths, which it believes were deliberate in an attempt to see how far the country could be pushed. An outraged public is demanding an end all co-operation with the US-led coalition.

The supplies to Nato's 150,000 troops are shipped to Karachi and then trucked across Pakistan, entering Afghanistan either in its south, through the Chaman border crossing, or via the Khyber pass to eastern Afghanistan.

A much longer and more expensive supply route has been developed through Europe and central Asia, which enters northern Afghanistan, while the rest of the goods are flown in, the most costly option. Four years ago, around 80% of the supplies went through Pakistan, but Nato now claims that only a third comes that way.

It is estimated that some 4,000 containers a month carry sustainment supplies to Nato troops from all three of the routes, meaning that about 1,300 containers would pass through Pakistan. In addition, some 1,000 fuel tankers also go from Pakistan each month to Afghanistan.

Pakistan complains that the heavy trucks have ruined its roads, while it charges nothing for the transit facility. However, the containers are transported by Pakistani companies, earning valuable foreign exchange for the country and employing some 40,000 people in the industry.

The trucks, which do not have any security escort, are frequently the target of militants and robbers. A further problem for the industry is the bureaucracy at Karachi port, which means the paperwork for each container takes a week or longer to clear.

A spokesman for the International Security Assistance Force in Kabul, Colonel Gary Kolb, said that negotiations with the Pakistani government over the supplies issue were ongoing.

"It would be inappropriate of Isaf to comment on those discussions at this time," said Kolb.

Nadeem Khan, chief executive of Raaziq International, one of the major Pakistani companies involved in carrying Nato supplies, said that the imposition of a transit fee would actually benefit the trade if it were accompanied by streamlined clearance at Karachi port and protection for the trucks.

"If Pakistan provides speed of passage and security too, then everyone would be a winner," said Khan.

Separately, it was announced that President Asif Zardari, who was flown to hospital in Dubai last week after suffering heart trouble, would be discharged on Thursday. However, he will remain in Dubai to rest, and it is unclear when he will return to Pakistan.