AD Ports puts pen to paper on 50-year Karachi terminal concession
UAE’s AD Ports has signed a concession agreement with Karachi Port Trust, 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 as a majority shareholder and Kaheel Terminals, a UAE-based company has been formed to manage, operate, and develop the Karachi Gateway Terminal Limited 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. This concession agreement follows the signing of an MoU in May this year.
The development works will include the deepening of berths, the extension of quay walls, and an increase in the container storage area. As a result, the terminal will be able to handle post-panamax class vessels of up to 8,500 teu and container capacity will increase from 750,000 to 1m teu per annum.
Historically, the terminal has been generating revenue of around $55m and EBITDA of around $30m annually.
AD Ports Group has also signed three MoUs with the Government of Pakistan to establish a framework for cooperation in improving transportation infrastructure, facilitating efficient cargo movement, reducing logistics costs, and enhancing the competitiveness of Karachi Port or any other projects of mutual interest.
The first set up a bilateral framework of cooperation to develop and upgrade the connectivity of Karachi Port to the railway systems. The other two relate to the development, operation, and management of free zone facilities in the Port Qasim area and the development of digital trade and logistics solutions including customs digitalisation.
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 $1.3bn in 2022 according to Pakistan’s Ministry of State for Foreign Trade. Additionally, re-exports from the UAE to Pakistan amounted to $2.9bn, reflecting a 7.7% growth compared to 2021.
This is the second similar agreement by AD Ports in just a matter of days. It signed a 30-year concession agreement with the Government of the Republic of the Congo for managing and operating the multipurpose New East Mole Terminal in Pointe-Noire earlier this week.
