In a bold move that deepens bilateral ties, Pakistan granted initial approval on Monday for a framework agreement with the United Arab Emirates (UAE) to hand over two additional Karachi port terminals. This deal, including the establishment of a new multipurpose cargo terminal, marks the second significant seaport terminal agreement between the two nations in less than two months. The decision was made during a meeting chaired by Federal Minister for Finance, Ishaq Dar, of the Cabinet Committee on Intergovernmental Commercial Transactions (CCoIGCT).
UAE-Pakistan Sign Second Major Seaport Terminal Deal
The Cabinet Committee on Intergovernmental Commercial Transactions (CCoIGCT) gave its nod for the signing of an intergovernmental agreement between the UAE and Pakistan for the development of Bulk and General Cargo Terminal at East Wharf, Karachi Port. This strategic deal is authorized under the Inter-Governmental Commercial Transaction Act of 2022 and represents another milestone in the flourishing partnership between the two countries.
Expanding Terminal Operations
The agreement outlines that berths 11 to 17 at the Karachi Port will be handed over to Abu Dhabi Ports, a prominent UAE Company. These berths will be designated for two cargo terminals, focusing on general cargo and clean cargo, which will facilitate the handling of food cargo and various commodities, including fertilizers. Moreover, as part of the deal, the contract will involve the modernization of Pakistan International Container Terminal (PICT) facilities and the development of related infrastructure.
Pushing Forward for Economic Growth
The UAE’s renewed interest in acquiring 1,833 meters of quay length from East Wharf at Karachi Port signifies the nation’s commitment to enhancing its maritime presence in the region. Notably, this move follows a previous acquisition of 800 quay meters by Abu Dhabi Ports under the Karachi Gateway Container Limited (KGCT) just last month. After this latest contract, the UAE Company is poised to control an impressive 85% of the total quay length at East Wharf, amplifying its influence in the Pakistani maritime landscape.
ECC to Set Price Negotiation Committee
To ensure transparency and mutual benefit, the government of Pakistan will establish a price negotiation committee after the agreement is approved by the federal cabinet. This committee will ascertain various factors in determining the contract cost, such as the agreement’s term, construction expenses, cargo handling capacity, quay wall length, royalty per tonne, land rent, storage charges, dock labor charges, upfront payment, and the type and quantum of investment.
Fostering Maritime Growth and Beyond
Pakistan’s Ministry of Maritime Affairs has expressed optimism regarding the rapid progression of the deal. While the ECC (Economic Coordination Committee) initially contemplated extending the concession agreement beyond five years, the present agreement is set for a term of five years, which can be extended through mutual consent of both Pakistan and the UAE. This collaboration aims to invigorate maritime infrastructure, promote trade, and elevate the economies of both nations.
With Pakistan giving the green light to hand over two additional Karachi port terminals, and the UAE’s active interest in expanding its maritime foothold, the stage is set for an intensified partnership between the two countries. This major seaport terminal deal reflects a strategic collaboration that holds vast potential for economic growth and further solidifies the bond between Pakistan and the UAE. The development of these terminals at Karachi Port promises to bring substantial benefits to nations’ trade and development sectors, fostering prosperity and progress for years to come.
