Govt approves Rs5 billion for Karachi dock workers’ layoff package

The Economic Coordination Committee has approved Rs5 billion as the federal government’s share in a compensation package for laying off around 2,545 dock workers of the Karachi Dock Labour Board.

The decision follows the outsourcing of Karachi Port’s Bulk & General Cargo and Container Terminal to AD Ports, which has refused to utilise the workers’ services or contribute towards any payments.

The Ministry of Maritime Affairs informed the ECC that the KDLB is governed by the Dock Workers (Regulation of Employment) Act, 1974, which regulates workers involved in loading and unloading ships at ports.

The Karachi Dock Labour Board was set up to ensure regular work and income for dock workers and manage labour relations between workers and the Karachi Port Trust.

The Prime Minister’s Task Force on Revamping of Pakistan’s Maritime Sector had directed KPT to initiate a legislative proposal to abolish the Act, as most terminal operators no longer required KDLB workers’ services.

The Implementation Committee of the task force, in its meeting on March 11, 2025, noted that KPT’s layoff proposal would cost more than Rs24 billion.

A committee chaired by the deputy prime minister later reviewed three compensation options ranging from Rs7.582 billion to Rs12.780 billion during meetings held on October 31, November 12 and December 1, 2025.

The committee decided that the Finance Division would provide Rs5 billion, while KPT would arrange the remaining amount from its own resources.

The Finance Division initially declined budgetary support, citing KPT’s liquidity position, but the Ministry of Maritime Affairs sought reconsideration, saying KPT was already financing projects worth more than Rs200 billion.

The ministry also argued that since winding up KDLB was a federal government decision, the Finance Division should contribute to the compensation package.

The ECC has now approved Rs5 billion through a technical supplementary grant in the current fiscal year, while KPT will fund the remaining amount.

The proposed abolition of KDLB is expected to face opposition from dock workers’ unions due to job security concerns.