UAE firm to pay $50m upfront to Karachi Port

KARACHI: Federal Minister for Maritime Affairs Faisal Sabzwari said on Friday that Abu Dhabi Ports (AD Ports) of the UAE will pay $50 million upfront to the Karachi Port and will invest $102 million for expansion in the next three to five years under a deal reached between AD Ports and Karachi Port Trust (KPT).

Addressing a press conference, Sabzwari said that AD Ports will invest in reinforcement and restructuring by acquiring more area. “It will provide the country more revenues and royalty as well per box movement will also increase by 12.5 percent,” Subzwari said.

The 50-year concession agreement was signed between the leading UAE port operator AD Ports and Karachi Port Trust (KPT) to operate a terminal in the city.

Under this deal, Pakistan International Container Terminal (PICT) will be operated by a joint venture (JV) between AD Ports Group, as a majority shareholder, and Kaheel Terminals, a UAE-based company that has been formed to manage, operate and develop the Karachi Gateway Terminal Limited (KGTL) berths 6-9 at port’s East Wharf.

The federal minister noted that this deal will increase our revenue at least by $5 million to $7 million per year and we will see more revenues when they attract more business to that particular container terminal.

Under the agreement, the minister said that the KPT will receive $18 per container as a royalty. The minister spelt out JV will undertake significant investments in infrastructure and superstructure over the next 10 years, with the bulk of it planned for 2026, according to AD Port.

The development works will include deepening of berths, an extension of quay walls, and an increase in the container storage area.

As a result, the terminal will be able to handle Post Panamax class vessels of up to 8,500 TEUs (Twenty-Foot Equivalent Units) and container capacity will increase from 750,000 to 1 million TEUs per annum. This expansion and enhancement will further cement the terminal and Karachi’s position as a key player in the maritime industry, he said.

Sabzwari said that the company has shown interest in more and more berths at the Karachi Port, Karachi Port to Port Qasim railway connectivity network as well as industrial park at Port Qasim. So, on the whole, it is more than $2 billion expression of interest, he said.

Sabzwari termed the arrival of AD Port in Pakistan as a very significant development itself for the uplift of the country’s maritime sector. “The footprint of Abu Dhabi port at Karachi port is itself very significant,” Sabzwari said.

The minister hoped the arrival of AD Port will also help in improving the financial health of Karachi Port through revenue generation.