Game-Changing Agreement UAE Consortium to Manage Karachi Port for 50 Years
AD Ports Group Signs 50-Year Concession Agreement to Develop Karachi Gateway Terminal
KARACHI: The United Arab Emirates (UAE)-based AD Ports Group has entered into a landmark 50-year concession agreement with the Karachi Port Trust (KPT) to manage, operate, and develop the Karachi Gateway Terminal Limited (KGTL), according to a statement released by the company.
As part of the agreement, the AD Ports Group will invest $220 million (Rs63.129 billion) in infrastructure development during the initial 10 years.
This agreement comes at a crucial time for Pakistan, as the country seeks external financing to support its struggling economy.
Under the terms of the 50-year concession agreement, a joint venture has been formed between AD Ports Group, as the majority shareholder, and Kaheel Terminals, a UAE-based company. The joint venture will oversee the management, operation, and development of berths 6-9 at Karachi Port’s East Wharf through the Karachi Gateway Terminal Limited (KGTL).
Over the next decade, significant investments of $220 million will be made in infrastructure and superstructure development, with a major portion planned for 2026. The development plans include deepening the berths, extending quay walls, and expanding the container storage area.
Upon completion, the terminal will be capable of handling Post Panamax class vessels of up to 8,500 TEUs (Twenty-Foot Equivalent Units), and the container capacity will increase from 750,000 to 1 million TEUs annually. This expansion will solidify the terminal’s position and elevate Karachi’s significance as a key player in the maritime industry.
Captain Mohamed Juma Al Shamisi, the managing director and Group CEO of AD Ports Group, expressed delight at this landmark concession agreement with the Karachi Port Trust, emphasizing the company’s strategy to invest in key maritime trade routes that offer long-term and sustainable growth prospects. He believes this agreement has the potential to unlock new avenues of growth and progress for both the UAE and Pakistan, strengthening ties with important trading nations and fostering economic growth and prosperity.
The operations of the terminal are denominated in dollars, shielding it from foreign exchange exposure to the Pakistani rupee. Historically, the terminal has generated around $55 million in revenue and an EBIDTA (earnings before interest, taxes, depreciation, and amortization) of approximately $30 million annually.
Maritime Affairs Minister Faisal Subzwari highlighted the strong and longstanding relationship between the UAE and Pakistan, which has seen continuous growth in trade and investment. He stated that the agreement reflects the shared vision of both nations for the development of port infrastructure, setting the stage for a thriving global maritime ecosystem.
According to Pakistan’s Ministry of Foreign Trade, the UAE was Pakistan’s top regional trading partner in 2021, accounting for over 40% of Pakistan’s trade with Arab countries. Non-oil exports from the UAE to Pakistan reached nearly AED 4.8 billion ($1.3 billion) in 2022, and re-exports from the UAE to Pakistan amounted to AED 10.6 billion (US$2.9 billion), marking a 7.7% growth compared to 2021.
Syed Syedain Raza Zaidi, Chairman of Karachi Port Trust, expressed his belief that the agreement between AD Ports Group and KPT signifies a significant milestone and holds immense potential for the growth and development of Karachi Port. He stated that this collaboration will pave the way for a thriving container terminal, enhancing efficiency, attracting investment, and stimulating the economy.
