ISLAMABAD: Pakistan is on the verge of signing a 25-year concession agreement with Abu Dhabi Ports, a UAE-based company, to operate the Karachi Gateway Terminal Limited. The agreement, which has received approval from the federal cabinet, promises to usher in substantial investments and modernization to the Karachi Port, boosting the country’s maritime infrastructure.
This was revealed in the meeting of the Senate Standing Committee on Maritime Affairs, chaired by Senator Rubina Khalid, which convened at the Parliament House on Thursday.
Under the proposed agreement, Abu Dhabi Ports will make an upfront payment of $50 million to the Pakistani government. The concession period will extend for 25 years, during which the UAE company will pay $18.00 per cross berth move and a ground rent of Rs 1,100 per sq. mt. per annum. Additionally, the terminal operator has committed to invest $102 million in the next five years, ensuring significant infrastructural upgrades to the Karachi Port.
During the meeting, committee members were provided with an overview of the key features of the commercial agreement, highlighting its potential to modernize the Karachi Port and ensure a steady stream of revenue.
The caretaker Minister for Maritime Affairs, Mr. Shahid Tarrar, in discussing the outsourcing of the Bulk Cargo Terminal, requested an in-camera meeting to provide a detailed briefing on the matter. He emphasized that while the agreement had not yet been signed, it had received cabinet approval and was in the final stages of execution. He further assured the committee that outsourcing the Bulk Cargo Terminal was in the best interests of the country, promising modernization and upgrading of Karachi Port infrastructure and guaranteed revenue.
The committee also scrutinized the procurement tenders issued by Karachi Port Trust (KPT) over the past decade.
The committee further examined KPT’s hiring of machinery and equipment on rental charges. It was revealed that one pilot boat was hired from 2016 to 2018 due to the non-availability of KPT’s own pilot boats. From 2019 onwards, two pilot boats were rented for shipping operations, each at a daily charge of Rs. 60,000, inclusive of manning and maintenance by the vendors. However, despite an expenditure of Rs. 224 million on these pilot boats, the revenue earned from wet charges between 2016 and May 2023 amounted to approximately Rs. 15 billion.
The meeting, attended by Senators Nuzhat Sadiq, Senator Mohammad Abdul Qadir, Senator Saifullah Abro, Senator Dost Muhammad Khan, and Senator Muhammad Akram, showcased the government’s dedication to enhancing Pakistan’s maritime infrastructure, ensuring transparency, and fostering economic growth through strategic partnerships and investments.
Could you provide details about the upfront payment of $50 million made by Abu Dhabi Port to the Pakistani government as part of this agreement?