The Ministry of Finance of Pakistan says that the framework agreement with the United Arab Emirates for the expansion of the general cargo terminal at Karachi port has been approved.
A statement issued by the Ministry of Finance said that the committee has approved the draft framework agreement for ratification by the federal cabinet, which will now be signed between the governments of Pakistan and the United Arab Emirates.
According to the statement, top officials including Federal Minister for Maritime Affairs Syed Faisal Sabzwari, Commerce Minister Syed Naveed Qamar, Energy Minister Khuram Dastgir Khan, Minister of State for Petroleum Mossadegh Masood Malik, Special Assistant to Prime Minister Tariq Bajwa participated in the meeting.
The statement of the Ministry of Finance said that the committee approved the draft of the Inter-Governmental Agreement after which it will be presented to the Federal Cabinet. This agreement will be made between the government of Pakistan and the United Arab Emirates.
Under the agreement, the Pakistan International Container Terminal (PICT) will be handed over to a United Arab Emirates company formed to develop and manage the terminal at Karachi Port.
In this regard, the Federal Minister for Maritime Affairs, Faisal Sabzwari, in an interview given to Independent Urdu, said that by handing over the control of the container terminal of the Karachi port to the government company of the United Arab Emirates, not only Pakistan will get significant money immediately, but with the increase in port operations, the presence of the UAE will improve the country’s reputation in the international market.
An agreement was reached between Pakistan and the United Arab Emirates to hand over the control of four berths at the Karachi port container terminal to the UAE government company, while according to the federal minister, the UAE has asked us for two more berths.
Speaking to Independent Urdu after a press conference at the Karachi Port Trust in June, Faisal Sabzwari refuted the impression that Karachi Port was handed over to the United Arab Emirates, explaining that out of the 30 terminals of Karachi Port, only one terminal with four berths has been given under the control of the United Arab Emirates.
According to him, six to nine berths of Karachi Gateway Terminal Limited (KGTL) have been given to a UAE company.
Under the agreement, the UAE will pay five million dollars to the Karachi Port Trust immediately, while it will spend $10.2 million over the next three to five years for the expansion of the terminal.
File Photo: Under the agreement, the UAE will pay $50 million to the Karachi Port Trust immediately, while spending $10.2 million over the next three to five years to expand the terminal (AFP).
“Similarly, the Karachi Port Trust will receive 50 to 70 million dollars every year in addition to the increase in traffic at the port in the future.”
In this regard, according to the UAE official agency ‘WAM’, Abu Dhabi Ports Group reported that a 50-year concession agreement has been signed between Karachi Port Trust and Kaheel Terminals Company for the management operation and development of Karachi Gate.
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Karachi Port Trust is a subsidiary of the Federal Government of Pakistan which oversees Karachi Port Operation Management. Abu Dhabi Ports Group will own the majority stake in the deal.
According to Faisal Sabzwari, under the first phase of this agreement, Abu Dhabi Ports Group will install new and modern automated machinery at the Karachi Container Terminal.
In the second phase, Abu Dhabi Ports Group will work on the infrastructure of the industrial park at Port Qasim, the inactive Green Terminal at Karachi Port, and the establishment of rail connectivity between Karachi Port and Port Qasim.
“This investment is expected to increase the royalty by 12.5 percent.”
Importance of Karachi Port
Built in the year 1857, Karachi Port is one of the largest and busiest ports in South Asia. According to the website of Karachi Port Trust, Karachi port handles 2.6 million tonnes of cargo annually, which is about 60 percent of Pakistan’s total trade.
Due to its geographical location, Karachi Port is located near the Strait of Hormuz, the world‘s most important waterway.
The Strait of Hormuz is an important shipping channel located between the Gulf of Oman and the Arabian Gulf and is approximately 21 miles wide. On its northern coast lies Iran and on the south the United Arab Emirates and Oman.