Pakistan’s Cabinet Committee on Intergovernmental Commercial Transactions (CCoIGCT) has given initial approval for signing a framework agreement with the United Arab Emirates (UAE) to hand over two more terminals at the Karachi Port, including the development of a new multipurpose cargo terminal. The meeting, chaired by Finance Minister Ishaq Dar, considered a summary of the Ministry of Maritime Affairs regarding an intergovernmental agreement between the UAE and Pakistan on Cooperation for the Development of Bulk and General Cargo Terminal at East Wharf at Karachi Port.
The proposed agreement will be the second major seaport terminal deal between Pakistan and the UAE in less than two months. The agreement aims to hand over berths 11 to 17 of the Karachi Port to Abu Dhabi Ports, a UAE company, for the development and management of two cargo terminals for an initial period of five years.
The general cargo terminal will include berths 11 to 13, while the clean terminal will comprise berths 14 to 17. The new terminal will be designed to handle food cargo and other commodities, including fertilizers. The contract will also involve upgrading the facilities of Pakistan International Container Terminal (PICT) and developing associated infrastructure.
After the cabinet’s approval, a price negotiation committee will be established for price discovery. The cost of the contract will be determined based on various factors, including the agreement’s term, construction cost, terminal’s lifespan, cargo handling capacity, quay wall length, royalty per tonne, land rent, storage charges, dock labor charges, upfront payment, and type of investment.
The agreement aims to attract financing from the UAE government and leverage modern technologies, materials, equipment, and products for the development of the port terminals. The initial agreement will be signed for five years, with the possibility of extensions as mutually agreed by both parties.
Pakistan and the UAE previously signed the Concession Agreement for berths 6 to 10 at the Karachi Port on June 22. The move is expected to significantly enhance port operations and further strengthen bilateral economic ties between the two countries.
The framework agreement is an essential step towards advancing maritime development in the region and increasing trade capacities through improved port infrastructure. However, the potential impact on the port’s revenue and financial sustainability will be monitored closely as the deal progresses.
