Islamabad: On Monday, Pakistan gave the nod to a signing framework to hand over two more terminals of Karachi port to the United Arab Emirates (UAE). The agreement includes the development of a multipurpose cargo terminal for handling food cargo and other entities. Under the contract, Pakistan International Container Terminal (PICT) will also be upgraded.
The decision was taken during a meeting of the Cabinet Committee on Intergovernmental Commercial Transactions. Finance Minister Ishaq Dar chaired the meeting. According to the agreement, Abu Dhabi Ports (a UAE company) will take over berths 11 to 17 for the management & development of two cargo terminals. The berths will be handed over for five years. Berth 11 to 13 form the general cargo terminal, and berths 14 to 17 makes up the clean terminal.
After the agreement is finalised, Abu Dhabi Ports will acquire 1,833 meters of quay length (out of the total quay length of 3,124 meters) of East Wharf.
Pakistan had already handed over berths 06 to 10 in East Wharf of Karachi port to UAE.
The Karachi Port comprises three wharves (East, West and South). The government intends to provide 85 per cent of East Wharf to the UAE company after a concession agreement. Pakistan decided to go for a negotiation-based deal rather than competitive bidding.
Karachi Port generates annual revenue of Rs 3.1 billion from the two terminals it is handing over to UAE. These terminals have an operating expense of Rs 675 million. Around Rs 3 billion are paid to World Bank as annual interest. Karachi Port Trust took the loan for the construction of terminals.
Ministry of Maritime Affairs officials reported that after paying interest cost and operational costs, KPT runs Rs 575 million deficit. The ministry added that the UAE government showed interest in organising financing, using the latest technologies & products for the development of the port terminals.