Karachi Gateway Terminal operations: 25-year deal signed with Abu Dhabi Ports Group, Senate panel told

ISLAMABAD: A parliamentary panel was informed on Thursday that Karachi Port Trust (KPT) has entered into a 25-year concession agreement with Abu Dhabi Ports Group (ADPG) of the UAE government to operate the Karachi Gateway Terminal Ltd (KGTL).

The Senate Standing Committee on Maritime Affairs which met here with Rubina Khalid in the chair, was informed that the concession period for the agreement is 25 years with $18.00 per cross berth move and a ground rent of Rs1,100 square metres per annum and upfront payment of $50 million.

It was briefed that an investment of $102 million will be made in the next five years by the terminal operator.

UAE’s AD Ports signs deal with KPT to operate Karachi Terminal

While discussing the outsourcing of bulk cargo terminal, the caretaker Federal Minister for Maritime Affairs Shahid Ashraf Tarar requested an in-camera briefing, saying that the agreement is yet to be signed.

However, he said that the cabinet has approved the agreement and it is at its last stage of execution.

He further assured the committee that the concession agreement for bulk cargo terminal is in the larger interest of the country.

He said that the outsourcing will bring modernisation and upgradation to the Karachi Port as well as generate revenue.

While vetting the detailed report regarding procurement tenders issued by KPT in the last 10 years, the committee was briefed that the Engineering Division has issued 16 tenders, the Civil Works Division issued 12 tenders and the P&D Division issued 26 tenders.

While taking a briefing on the tenders of the Engineering Division, the committee inquired about the delay in the repair, refurbishment and commissioning of BHD Ali P994B litronic on a turnkey basis by six years.

The committee decided to hold a fact-finding inquiry to probe into the matter of delay in bringing the machine back to service and directed the ministry to report back within a month.

It also sought details on the project of accessories for the port department KPT.

The committee deferred further deliberation on this agenda item till the next meeting.

The committee also took a briefing on the details of all machinery and equipment hired by KPT on rental charges.

It was briefed that in order to run the port activities, the KPT hired one pilot boat on a contract basis in 2016 for a period of one year – extendable – for pilotage operation at Karachi Port. It was briefed that from 2016-2018, one pilot boat was hired due to the non-availability of KPT’s own pilot boats, from 2019 onward two pilot boats were hired for the execution of shipping operation.

Each pilot boat is hired at a cost of Rs60,000 per day including manning and maintenance by the vendors, adding fuel is provided to these pilot boats by KPT.

It was briefed that the revenue earned in terms of wet charges from 2016 to May 2023 is approximately Rs15,000 million versus an expenditure of Rs224 million incurred on these pilot boats.

Copyright Business Recorder, 2023