The UAE-based AD Ports Group has entered into a groundbreaking 50-year concession agreement with Karachi Port Trust (KPT), signaling a significant development for both parties involved. According to an official statement released on Thursday, the agreement involves the operation of Karachi Gateway Terminal Limited (KGTL) and an impressive investment of $220 million (Rs63.129 billion) earmarked for infrastructure development within the first decade of the deal. This collaboration comes at a crucial time for Pakistan, as the country seeks external financing to support its struggling economy.
Joint Venture to Manage and Develop KGTL Berths
To effectively manage, operate, and develop the KGTL berths 6-9 located at Karachi Port’s East Wharf, a joint venture (JV) has been formed between the majority shareholder AD Ports Group and Kaheel Terminals, a UAE-based company. The primary objective of this partnership is to drive growth and expansion in the maritime sector.
Substantial Investments Planned for Infrastructure Development
Over the next ten years, the joint venture will dedicate a substantial sum of $220 million towards infrastructure and superstructure improvements, with a major portion allocated for the year 2026. The development plans encompass various areas, including the deepening of berths, extension of quay walls, and expansion of the container storage space.
Enhanced Capacity and Strategic Positioning
As a result of these investments, the terminal’s capabilities will be significantly enhanced. It will be equipped to handle Post Panamax class vessels with a capacity of up to 8,500 TEUs (Twenty-Foot Equivalent Units), and the container capacity will witness a boost from 750,000 to 1 million TEUs per annum. This expansion and improvement will further solidify the terminal’s position as a key player in the maritime industry, thereby enhancing Karachi’s prominence in the global trade landscape.
AD Ports Group’s Strategy for Long-Term Growth
Captain Mohamed Juma Al Shamisi, the Managing Director and Group CEO of AD Ports Group, expressed his delight at embarking on this landmark concession agreement with Karachi Port Trust. He emphasized the group’s strategy of investing in crucial maritime trade routes that offer long-term, sustainable growth prospects, aligning with the UAE’s vision. This agreement has the potential to unlock new avenues of growth and progress for both the UAE and Pakistan, facilitating stronger ties with key trading nations and fostering increased economic prosperity.
Strengthened Bilateral Relationship and Shared Vision
Faisal Subzwari, the Federal Minister for Maritime Affairs, highlighted the robust and enduring relationship between the UAE and Pakistan, which continues to grow in the domains of trade and investment. He commended the commitment of the leadership from both nations in strengthening these ties. The signing of this agreement underscores the shared vision for the development of port infrastructure and sets the stage for a prosperous global maritime ecosystem.
UAE-Pakistan Trade Relations
The UAE emerged as Pakistan’s top regional trading partner in 2021, accounting for over 40 percent of the country’s trade with Arab nations. In 2022, the value of non-oil exports from the UAE to Pakistan reached nearly AED 4.8 billion ($1.3 billion), as reported by Pakistan’s Ministry of Foreign Trade. Additionally, re-exports from the UAE to Pakistan experienced a significant growth of 7.7 percent compared to 2021, amounting to AED 10.6 billion (US$2.9 billion).
Milestone Agreement for Karachi Port Development
Syed Syedain Raza Zaidi, the Chairman of Karachi Port Trust, viewed the agreement between AD Ports Group and KPT as a significant milestone that holds immense potential for the growth and development of Karachi Port. By joining forces, both entities aim to establish a thriving container terminal that enhances efficiency, attracts investments, and stimulates the economy, aligning with the collective vision for progress and prosperity.
As the UAE-based AD Ports Group takes the helm of Karachi Gateway Terminal Limited, a new era of growth and opportunity beckons for both Pakistan and the United Arab Emirates. The extensive investments planned for infrastructure development and the strategic positioning of Karachi Port will undoubtedly have a far-reaching impact on the maritime industry and bilateral trade relations, driving economic progress and prosperity for the foreseeable future.