Spokesman Report
KARACHI :AD Ports Group announced today the signing of a concession agreement with Karachi Port Trust (KPT), the Pakistani federal government agency that oversees the operations of the Port of Karachi.
Under the terms of the 50-year concession agreement, a Joint Venture between AD Ports Group, as a majority shareholder, and Kaheel Terminals, a UAE-based company has been formed to manage, operate and develop the Karachi Gateway Terminal Limited (KGTL), berths 6-9 at Karachi Port’s East Wharf.
The JV will undertake significant investments in infrastructure and superstructure over the next 10 years, with the bulk of it planned for 2026. The development works will include deepening of berths, extension of quay walls, and an increase in container storage area. As a result, the terminal will be able to handle Post Panamax class vessels of up to 8,500 TEUs (Twenty-Foot Equivalent Units) and container capacity will increase from 750,000 to 1 million TEUs per annum. This expansion and enhancement will further cement the Terminal and Karachi’s position as a key player in the maritime industry.
The Terminal’s operations are all dollarised with no foreign exchange exposure to the Pakistani Rupee. Historically, the terminal has been generating revenue of around $55 million and EBIDTA of around $30 million annually.
This strategic agreement follows the signing in May this year of a Memorandum of Understanding, which inked both entities shared vision to drive growth, promote trade diversification, and strengthen bilateral ties between the UAE and Pakistan.
Under this MoU, the parties have agreed to collaborate under a bilateral framework of mutual cooperation to develop and upgrade the connectivity of Karachi Port to the railway systems.
This MoU establishes a cooperative relationship between AD Ports and Port Qasim Authority for the development, operation, and management of industrial and/or free zone facilities in the Port Qasim area.
Under this MoU, AD Ports Group and the Government of Pakistan will cooperate to develop digital trade and logistics solutions including customs digitalisation.
Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure, said, “We are pleased to witness the signing of this concession agreement, which signifies the UAE’s continued commitment to strengthening our ties with Pakistan.
Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said, “This milestone agreement will bolster the terminal’s capacity, further enhancing its attractiveness to international trade partners to contribute to the growth of Karachi’s position as a key player in the global trade industry.
Faisal Subzwari, Pakistan Minister for Maritime Affairs, said, “The UAE and Pakistan have a strong and long-standing relationship, which is experiencing continuous growth in the areas of trade and investment due to our leadership’s commitment to further strengthen ties.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO of AD Ports Group, said, “AD Ports Group is delighted to embark on this landmark partnership with the Government of Pakistan.
Syed Syedain Raza Zaidi, Chairman, Karachi Port Trust, said, “This landmark agreement between AD Ports Group and KPT marks a significant milestone and holds big potential for the growth and development of Karachi Port.
The UAE was Pakistan’s number one regional trading partner in 2021, accounting for over 40% of Pakistan’s trade with Arab countries, with non-oil exports from the UAE to Pakistan valued at nearly AED 4.8 billion ($1.3 billion) in 2022 according to Pakistan’s Ministry of State for Foreign Trade. Additionally, re-exports from the UAE to Pakistan amounted to AED 10.6 billion (US$ 2.9 billion), reflecting a 7.7% growth compared to 2021.