Pakistan has given the green light to a commercial agreement that will transfer two seaport terminals to the United Arab Emirates (UAE) for a period of 25 years. The Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) has recommended the amended commercial agreement to the Federal Cabinet for approval, led by Finance Minister Ishaq Dar.
Under the agreement, the UAE government-owned firm, Abu Dhabi Ports, will make an upfront payment of $25 million, which will be adjustable against revenue sharing over the next seven years. The payment will consist of $3 million annually for the first five years, followed by $5 million each in the following two years. This decision means that Abu Dhabi Ports will have exclusive operations and development rights on 85% of the east wharf of the Karachi port.
The concessioner, Abu Dhabi Ports, plans to commence development work in September 2023, with the aim of modernising the terminal. The development of the Bulk and General Cargo Terminal at the Karachi Port was reviewed by the CCoIGCT, with various officials attending the meeting, including finance and maritime affairs representatives.
It is worth noting that just two days prior to this approval, the cabinet committee had refused to accept the terms and instructed the Price Negotiation Committee (PNC) to negotiate a higher price. However, the committee has now reached an agreement, paving the way for the handover of the terminals to the UAE.
This move is expected to strengthen economic ties between Pakistan and the UAE and promote further cooperation in the shipping and maritime sectors. The modernisation of the Karachi port terminals will enhance the efficiency and capacity of the port, benefiting trade and commerce in the region.