Pakistan has greenlit a commercial arrangement that will see the United Arab Emirates (UAE) gaining control of two additional seaport terminals in the country. The decision, endorsed by the Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT), has been recommended for approval by the Federal Cabinet, according to a statement issued by the finance ministry late at night.
The move follows the established procedure, where the cabinet’s subcommittee, led by Finance Minister Ishaq Dar, approves the UAE’s acquisition of the terminals before it is brought before the Federal Cabinet. Under this amended commercial agreement, the UAE government-owned company will make an upfront payment of an additional US$25 million, which will be adjusted against revenue sharing over the span of the next seven years. The annual disbursements will amount to US$3 million for the initial five years, followed by US$5 million for the subsequent two years.
With this recent decision, the United Arab Emirates Abu Dhabi (AD) Ports will have exclusive access to 85% of the east wharf of the Karachi port for operational and developmental purposes. The concessioner, AD Ports, is scheduled to commence construction in September 2023 to enhance and upgrade the facility.
Prior to this endorsement, the Cabinet Committee on Inter-Governmental Commercial Transactions reviewed the recommendations of the negotiating committee responsible for the development of the bulk and general cargo terminal at Karachi Port. The committee convened twice on August 8, 2023, and its discussions were attended by prominent figures including Syed Faisal Ali Sabzwari, Syed Naveed Qamar, Khurram Dastgir Khan, SAPM on finance Tariq Bajwa, SAPM on revenue Tariq Mehmood Pasha, the secretary for maritime affairs, the secretary for law and justice, and the chairman of the Karachi Port Trust (KPT).
It is noteworthy that merely two days prior to this approval, the Price Negotiation Committee (PNC) was directed by the same cabinet committee to seek a higher price after the initially proposed terms were not accepted.