UAE offers to acquire Karachi Port terminals

[Hitman]

According to the offer, the UAE company will pay $18 per cross berth royalty fee and $3.21 per square meter fee


The United Arab Emirates has sought the control of the Karachi Port terminals on lease for 50 years in a negotiated deal, which may mark the first foreign transaction without competitive bidding process.

According to the offer made by the Abu Dhabi Ports Company of the UAE, Pakistan will get $50 million upfront price for the fixed equipment and infrastructure. According to the offer, the UAE company will pay $18 per cross berth royalty fee and $3.21 per square meter fee.

These terms are subject to the approval of the federal cabinet.

The Karachi Port Trust will get about $23 million to $24 million per annum at the current projected sea cargo traffic, according to a member of the cabinet committee that discussed the draft Operations, Maintenance, Investment and Development Agreement between the Karachi Port Trust (KPT) and Abu Dhabi Ports.

Headed by Finance Minister Ishaq Dar, the Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) on Wednesday discussed the draft of the Operations, Maintenance, Investment and Development Agreement between the Karachi Port Trust (KPT) and Abu Dhabi Ports.

Pakistani authorities were giving final touches to the draft agreement till the filing of the story. The agreement is expected to be signed today (Thursday), subject to Pakistan’s formal endorsement of the offer.

The Dar-led cabinet body was rushing through the transaction under the Intergovernmental Commercial Transactions Act of 2022, which absolves the government from the competitive bidding process. The government did not appoint any independent consultant for price discovery, which is required under the law.

Pakistan is in need of major foreign inflows but these small transactions may not resolve the issue.

Berths 6 to 9 are being handed over to the UAE government firm for a period of “50 years from the commencement date, as may be extended in accordance with this Agreement”, according to the draft agreement.

Although the agreement mentions 50 year one terms, some of the cabinet members were of the view that Pakistan should give two terms of 25 years each.
Any dispute arising out of or in connection with this Agreement is proposed to be settled by arbitration in accordance with the rules of London Court of International Arbitration, by one or more arbitrators appointed in compliance with the rules, according to the draft agreement. The place and seat of arbitration will also be London, United Kingdom.

The Abu Dhabi Ports -- an affiliate of the Abu Dhabi Ports Group of the UAE-- will pay an upfront amount of $50 million within 45 working days. Pakistan will charge a $3.21 per square meter fee for containers per annum in respect to the area of site in occupation of the UA, according to the offer.

From the Commencement Date, the Abu Dhabi port will pay to KPT a royalty at the rate of $18 per cross berth revenue move, excluding sales tax. There will be indexation of five 5% after every three years. First indexation shall start after three years from the commencement date.

The UAE company has promised to make $100 million investment in five years in addition to paying Rs2 billion litigation charges.

The Abu Dhabi Port will have the right from time to time to revise its container handling charges. However, in case the increase in fee is more than 15%, the UAE government would seek the permission of the KP.

Just two days ago, the Cabinet Committee on Inter-Governmental Commercial Transactions had constituted the Committee to negotiate the commercial agreement between KPT and Abu Dhabi Ports. The committee was headed by Minister for Maritime Affairs Faisal Subzwari and its members were special assistant to PM on Government Effectiveness Jehanzeb Khan, Additional Secretary foreign affairs, Additional Secretary Finance, Chairman, KPT, General Managers of Finance, Law, and Planning of the KPT.

The Negotiation Committee examined and discussed the draft Commercial Agreement on Wednesday. The KPT Board also considered the matter regarding the Letter of Intent, Agreement and Commercial Proposal to acquire operations, maintenance and development rights of the container at berth No. 6 to 9 East Wharf at KPT, according to the Finance Ministry officials.

The KPT board has already ratified the commercial agreement for the approval of the Federal Government. The Framework Agreement was approved by the Cabinet on Tuesday, immediately after the cabinet committee recommendations without discussing it.

According to the draft of the Operations, Maintenance, Investment and Development Agreement, the UAE company will also have the right to be listed on a stock exchange in Pakistan and to issue and sell shares not exceeding 49%of its paid-up share capital to the public.

Pakistan will have the right to take over the terminals in the event of any national emergency or under supreme security conditions.

Pakistan, at any time, shall not put the UAE government at a disadvantage position compared to other terminal operators at the Karachi Port in any manner whatsoever, according to the agreement. The KPT will also not have any right of representation on the Board of Directors of the terminal operating company.

The UAE government will obtain Pakistan’s prior clearance before appointing any foreign national for working at the terminal. Pakistan will have the right to refuse clearance but purely because of security reasons.

Pakistan will also have the right to establish another container terminal facility at Karachi Port only when the aggregate container traffic at Karachi Port exceeds by more than 80% of five million TEUs and establish further terminals each time the aggregate annual container traffic at Karachi Port increases by 500,000 TEUs.

At any time such thresholds are reached, KPT shall first enter into good faith negotiations with the Dubai company to allow them to establish such additional terminal facility. If such discussions are not concluded within a period of two months, KPT can expand the port.

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Link: https://tribune.com.pk/story/2422989/uae-offers-to-acquire-karachi-port-terminals

 

[Mockingbird]

Selling the country literally now, piece by piece.

 

[saeedhk]

Pakistan should simply tell a country to take over it for once and all. First, airports were leased out, then parks, then motorways and now ports. Pakistan is not a country but a collection of feudals, military men, clerics and other elites. They collude to loot and plunder this country.

 

[Hitman]

Pakistan should simply tell a country to take over it for once and all. First, airports were leased out, then parks, then motorways and now ports. Pakistan is not a country but a collection of feudals, military men, clerics and other elites. They collude to loot and plunder this country.

One thing I'll say though, Pakistanis have largely been patriotic despite the gross injustice they have had to go through over the years.

 

[Kianig89]

Anything left for Pakistan, apart from poor uneducated masses, why dont we hire a group of 30-40 Chinese to officially run the country

 

[cricketjoshila]

Is there no way that budgetary cuts can be made,so that national and strategic assets are not sold off.

 

[Romali_rotti]

One thing I'll say though, Pakistanis have largely been patriotic despite the gross injustice they have had to go through over the years.

Pakistanis have been programmed as below for decades:

Kashmir belongs to us,

India is the bad guy,

This has been programmed in their heads, and now they are at a point of now return. Pakistan is pretty much finished, Chinese will eventually take over and be in full control in the coming decades.

 

[DeadlyVenom]

Good move and we should take it.

 

[DeadlyVenom]

Is there no way that budgetary cuts can be made,so that national and strategic assets are not sold off.

lease is not the same as sold off.

Arabs can develop it and it will be given back in 50 years.

 

[Cpt. Rishwat]

Pakistanis have been programmed as below for decades:

Kashmir belongs to us,

India is the bad guy,

This has been programmed in their heads, and now they are at a point of now return. Pakistan is pretty much finished, Chinese will eventually take over and be in full control in the coming decades.

Shame for India's long term plans of Akhand Bharat. They really should have made more effort to bring Pakistan into the SAARC fold.

 

[gazza619]

Good deal for the Pakistan army.

 

[Hitman]

Good deal for the Pakistan army.

Won't it benefit the overall economy?

 

[mazkhan]

Anything left for Pakistan, apart from poor uneducated masses, why dont we hire a group of 30-40 Chinese to officially run the country

It's only a matter of time when munshi allows pakistanis to be sold as slaves and allows their organs to be harvested.

We are gonna end up worse than African countries the way things are going.

 

[Angrez Pakistani]

Pakistani rulers have a problem of rent seeking behaviour. Short term profits over long term vision. Of course when you believe that the maximum tenure you’ll ever get to have is 3-4 years then you will have that sort of attitude towards governance.

Our political leaders are only interested in holding onto the scraps provided by the military. And our military, instead of focusing on defence and in their own domain, are busy making p*rn videos of the out of favour politicians and their families. And when they are not busy doing that, they are busy providing cover to the Malik Riaz of the world to strip the peasants off of their land and their meagre savings.

No one is remotely interested in doing their own job.

 

[daytrader]

UAE firm to pay $50m upfront to Karachi Port
Sabzwari said that Abu Dhabi Ports of the UAE will pay $50 million upfront to Karachi Port and will invest $102 million for expansion in the next three to five years

Federal Minister for Maritime Affairs Faisal Sabzwari said on Friday that Abu Dhabi Ports (AD Ports) of the UAE will pay $50 million upfront to the Karachi Port and will invest $102 million for expansion in the next three to five years under a deal reached between AD Ports and Karachi Port Trust (KPT).

Addressing a press conference, Sabzwari said that AD Ports will invest in reinforcement and restructuring by acquiring more area. “It will provide the country more revenues and royalty as well per box movement will also increase by 12.5 percent,” Subzwari said.

The 50-year concession agreement was signed between the leading UAE port operator AD Ports and Karachi Port Trust (KPT) to operate a terminal in the city.

Under this deal, Pakistan International Container Terminal (PICT) will be operated by a joint venture (JV) between AD Ports Group, as a majority shareholder, and Kaheel Terminals, a UAE-based company that has been formed to manage, operate and develop the Karachi Gateway Terminal Limited (KGTL) berths 6-9 at port’s East Wharf.

The federal minister noted that this deal will increase our revenue at least by $5 million to $7 million per year and we will see more revenues when they attract more business to that particular container terminal.

Under the agreement, the minister said that the KPT will receive $18 per container as a royalty. The minister spelt out JV will undertake significant investments in infrastructure and superstructure over the next 10 years, with the bulk of it planned for 2026, according to AD Port.

...
https://www.thenews.com.pk/print/1083851-uae-firm-to-pay-50m-upfront-to-karachi-port

 

[gazza619]

Won't it benefit the overall economy?

Yes of course. Peanut percentage will benefit the people whilst the lion share will go towards the benefits and pension payments of our saviours.

 

[saeedhk]

Pakistan will receive a royalty of only $18 per container. Does anybody know what is the normal royalty/tax that a country receives?

 

[wasim-fan]

Pakistan will receive a royalty of only $18 per container. Does anybody know what is the normal royalty/tax that a country receives?

It's peanuts. But when peanuts are in short supply, it matters.

 

[Cpt. Rishwat]

Pakistani rulers have a problem of rent seeking behaviour. Short term profits over long term vision. Of course when you believe that the maximum tenure you’ll ever get to have is 3-4 years then you will have that sort of attitude towards governance.

Our political leaders are only interested in holding onto the scraps provided by the military. And our military, instead of focusing on defence and in their own domain, are busy making p*rn videos of the out of favour politicians and their families. And when they are not busy doing that, they are busy providing cover to the Malik Riaz of the world to strip the peasants off of their land and their meagre savings.

No one is remotely interested in doing their own job.

In a country where getting into office is basically a licence to divert funds into your offshore bank accounts, it's no surprise that there is no interest in long term vision. The military big shots don't have anyone to answer to, they basically can threaten the governing parties to toe their line or remove them. They have systematically set about dismantling the PTI because they dared challenge their power, and now we are left with the choice of the two remaining parties which are always happy to collaberate with the General in divvying up the kickbacks among themselves.

 

[cricketjoshila]

Pakistan will receive a royalty of only $18 per container. Does anybody know what is the normal royalty/tax that a country receives?

Why container and not per ton?

In India royalty in ports is calculated on per ton basis.

 

[the Great Khan]

Maybe we can lease the govt to somebody..

 

[rpant_gabba]

In a country where getting into office is basically a licence to divert funds into your offshore bank accounts, it's no surprise that there is no interest in long term vision. The military big shots don't have anyone to answer to, they basically can threaten the governing parties to toe their line or remove them. They have systematically set about dismantling the PTI because they dared challenge their power, and now we are left with the choice of the two remaining parties which are always happy to collaberate with the General in divvying up the kickbacks among themselves.

is this is a new trend in pakistan?

 

[Cpt. Rishwat]

is this is a new trend in pakistan?

No, but in the past Pakistan had leaders who were visionary. I don't like what the party has become since Mr 10% worked his way in, but Zulfiqar Bhutto was a visionary. Even some of the early military leaders were visionaries. Imran Khan is a visionary.

Sharif and Bhutto clan are just taking the money from whoever offers the best kickback. Maybe by 2040 India will be in a position to buy some of the real estate they are signing over to UAE and China. Obviously they aren't in a position to do it now, otherwise they would have done it.

 

[rpant_gabba]

No, but in the past Pakistan had leaders who were visionary. I don't like what the party has become since Mr 10% worked his way in, but Zulfiqar Bhutto was a visionary. Even some of the early military leaders were visionaries. Imran Khan is a visionary.

Sharif and Bhutto clan are just taking the money from whoever offers the best kickback. Maybe by 2040 India will be in a position to buy some of the real estate they are signing over to UAE and China. Obviously they aren't in a position to do it now, otherwise they would have done it.

Isn't ZA Bhutto the one orchestrated Operation Grandslam, Gibraltar and Searchlight? promoted Zia-ul-Haq? aren't visionaries supposed to envision possible outcomes?


did Bhutto not envision what India would do in 1965 or 1971? did he not envision that Zia would hang him?

Did IK not envision the establishment would turn on him on a dime? he just needed to know a bit of history

so you post is a bit off a tough sell.

Who were the early military leaders who were visionaries and what was their vision?

Hope India is not stupid enough to buy enough to buy anything from Pakistan. the current approach is working well for both countries

 

[rickroll]

In a country where getting into office is basically a licence to divert funds into your offshore bank accounts, it's no surprise that there is no interest in long term vision. The military big shots don't have anyone to answer to, they basically can threaten the governing parties to toe their line or remove them. They have systematically set about dismantling the PTI because they dared challenge their power, and now we are left with the choice of the two remaining parties which are always happy to collaberate with the General in divvying up the kickbacks among themselves.

No, but in the past Pakistan had leaders who were visionary. I don't like what the party has become since Mr 10% worked his way in, but Zulfiqar Bhutto was a visionary. Even some of the early military leaders were visionaries. Imran Khan is a visionary.

Sharif and Bhutto clan are just taking the money from whoever offers the best kickback. Maybe by 2040 India will be in a position to buy some of the real estate they are signing over to UAE and China. Obviously they aren't in a position to do it now, otherwise they would have done it.

Good points in both these posts.

 

[LongHorn]

Isn't ZA Bhutto the one orchestrated Operation Grandslam, Gibraltar and Searchlight? promoted Zia-ul-Haq? aren't visionaries supposed to envision possible outcomes?

Not really....Someone can plan the best for their country but then get betrayed in an unexpected manner

1) Erdogan is a visionary but he couldnt predict the coup attempt against him

2) Dubai's ruler is credited as the best planner out of the all the Gulf leaders (and a far better visionary than MBZ in Abu Dhabi). Yet his favorite and only public wife (who happened to be a "Syed" as well by being King Hussein's daughter) cheated on him with a Christian bodyguard when there was absolutely no reason for her to do so.
There was no way he could predict the betrayal

Same logic applies to Imran Khan and ZAB. In Nawaz/Musharraf case it wasnt that outlandish for the scenario to play out the way it did, but hardly anyone expected IK to be ditched the way he was

 

[shortbread]

Pakistan will receive a royalty of only $18 per container. Does anybody know what is the normal royalty/tax that a country receives?

Peanuts, not even a percentile point. But other benefits include transportation, employment, salaries, services etc..etc... and taxes from all this port activity. But yes sold for a pittance nonetheless.

The biggest cost of operations will the security fee to be paid to the establishment. Plus a few senior board roles for retired army personnel ie. Security incharge, public relations etc...etc. That's the biggest premium the new owners will have to bear and as always it will be confidential.

 

[rpant_gabba]

Not really....Someone can plan the best for their country but then get betrayed in an unexpected manner

1) Erdogan is a visionary but he couldnt predict the coup attempt against him

2) Dubai's ruler is credited as the best planner out of the all the Gulf leaders (and a far better visionary than MBZ in Abu Dhabi). Yet his favorite and only public wife (who happened to be a "Syed" as well by being King Hussein's daughter) cheated on him with a Christian bodyguard when there was absolutely no reason for her to do so.
There was no way he could predict the betrayal

Same logic applies to Imran Khan and ZAB. In Nawaz/Musharraf case it wasnt that outlandish for the scenario to play out the way it did, but hardly anyone expected IK to be ditched the way he was

Bit of a confusing post.

Who betrayed ZA Bhutto? India by defending itself? Mujib and bengalis by fighting for their rights and lives?

Zia: yes, but Pak army has always done this so it couldn't have been surprise for Bhutto

IK: I mean IK saw what establishment did to Zardari and Nawaz in 2018 and they did to Nawaz in 1999. What convinced him that he was immune?

Visionary would plan for setbacks and not assume everything will go according to plan

 

[Cpt. Rishwat]

Bit of a confusing post.

Who betrayed ZA Bhutto? India by defending itself? Mujib and bengalis by fighting for their rights and lives?

Zia: yes, but Pak army has always done this so it couldn't have been surprise for Bhutto

IK: I mean IK saw what establishment did to Zardari and Nawaz in 2018 and they did to Nawaz in 1999. What convinced him that he was immune?

Visionary would plan for setbacks and not assume everything will go according to plan

Zulfikar Bhutto and Imran Khan knew the risks, but sometimes standing for what you believe is worth more than the best plans.

 

[rpant_gabba]

Zulfikar Bhutto and Imran Khan knew the risks, but sometimes standing for what you believe is worth more than the best plans.

Visionaries are acutely aware of history and don't assume that rules will be different for them. Army has been in charge of Pakistan since 1958 regardless of who is the "prime minster" and both ZA bhutto and IK were in bed with the army to get to power.

What made them blind to the fact the army will not treat them any differently? Not exactly visionary material.

Who are early military leaders that you mentioned were visionaries

 

[SalimBhai]

Erdogan coup was fake coup done by him Bhutto had it coming, ( I don’t support his execution but he was out of control. ). Imran khan does not have a good sense when it comes to politics

 

[Colorblind Genius]

Pakistanis have been programmed as below for decades:

Kashmir belongs to us,

India is the bad guy,

This has been programmed in their heads, and now they are at a point of now return. Pakistan is pretty much finished,

[/b]Chinese will eventually take over and be in full control in the coming decades.[/b]

BEST POSSIBLE thing that can for the benefit of Pakistan and its masses.

It’s already too late. It should’ve happened about 20 years ago.

I TRULY hope it happens sooner than later.

 

[Romali_rotti]

BEST POSSIBLE thing that can for the benefit of Pakistan and its masses.

It’s already too late. It should’ve happened about 20 years ago.

I TRULY hope it happens sooner than later.

I don't mean this in a malicious way, I am not anti Pakistani or whatever else.

I genuinely want to see Pakistan as a stable political and economy wise, however I think that ship has sailed.

It is impossible to dig Pakistan out of the hole its in, there are too many external forces now calling the shots like the Americans, Chinese, who knows even the Russians and you have the corrupt Pakistani military on top.

Pakistan will just go the way it is....

 

[Colorblind Genius]

I don't mean this in a malicious way, I am not anti Pakistani or whatever else.

I genuinely want to see Pakistan as a stable political and economy wise, however I think that ship has sailed.

It is impossible to dig Pakistan out of the hole its in, there are too many external forces now calling the shots like the Americans, Chinese, who knows even the Russians and you have the corrupt Pakistani military on top.

Pakistan will just go the way it is....

I understand what you are saying.

My own understanding is that Pakistan's biggest enemies are some of the powerful Pakistanis themselves.

I firmly believe that Freedom is like a loaded gun. If you don't know how to use it, you will shoot yourself in the foot. And this is EXACTLY what we did in Pakistan.

In the last 75 years, a big majority of Pakistanis have proved with 100% certainty that they did not deserve freedom. - They have clearly shown that they don't know the value and worth of freedom.

I firmly believe that for the betterment of Pakistanis, it's THE BEST that they must be ruled over by someone from the outside. We are much, much, and MUCH better at functionating to our max protentional, when we work for someone - when we have an external leader - when we have an outsider boss.
We are THE BEST workers and THE WORSE leaders. 100% guaranteed.


The British won't take back Pakistan because it's a $200+ BILLION liability.
The Pakistanis won't want to be ruled over by the current Hindu regime of India - so there will be a mess and unrest in the country.

China is our best of the best option.

Pakistanis will have access to basic life necessities - masses will be pulled out of poverty line - there will be a rule of law enforced by an iron fist - explosive population growth will be tightly clamped - joblessness AND laziness will be significantly reduced. Infrastructure will be improved. And most importantly, these corrupt army generals will be put to sword.

The problem is, does Pakistan have enough assets for the Chinese to justify the take over? Chinese will simply look for the ROI - and that's it.

So far as the hue and cry by some Pakistanis that they will be treated like Uighurs?
Well .... not a biggie in my opinion.

A HUGE chunk of modern day Pakistanis don't have any regards and any honesty towards their religious obligations and their religious faith and it's guidance on how to live your day to day life? Otherwise Pakistan wouldn't be placed at number 140 on the scale of honesty.

What's the point of these loud Azaans and mosques full of people while you have to leash the steel glass with a metal chain and you are always scared about your shoes getting stolen in the same masjid?

Dishonesty, corruption and Haram Khori are so rampant that it's now considered "Mera Haq hai" - it's my right. Islamic guidance has a HUGE focus on Justice. But currently there is no concept of justice left in Pakistan.

There are perhaps 5% genuine and honest Muslims left in Pakistan - and I am sure Chinese won't bother them much - just as they didn't bother 100% Uighurs. There are also many, many other Muslims in China who live peacefully. I am sure Chinese won't bother you if you are honest with your faith and pay full income taxes.

So to the big majority of those Pakistanis who worry about their Islam and their Muslimness under the Chinese - don't worry about it - you don't have any to begin with.

 

[pakistani pride]

Pakistanis have been programmed as below for decades:

Kashmir belongs to us,

India is the bad guy,

This has been programmed in their heads, and now they are at a point of now return. Pakistan is pretty much finished, Chinese will eventually take over and be in full control in the coming decades.

You used to be a good poster, but lately your hate towards Pakistan is growing each day.

Keep dreaming.

 

[daytrader]

Govt looking to outsource Islamabad airport only

The government on Monday decided to restrict the outsourcing of airports only to Islamabad International Airport (IIA) for the time being and continued to extend about Rs21.4 billion worth of 14 supplementary grants even a day after the passage of the federal budget.

A steering committee meeting on outsourcing of airport operations, presided over by Finance Minister Ishaq Dar, appeared to be as confused as the transaction adviser — International Finance Corpo*ration of the World Bank — was unclear if the outsourcing was planned for all the three major airports — Islamabad, Lahore and Karachi.

The participants were also uncertain about the financial matters pertaining to the IFC’s advisory services.

Informed sources told Dawn that it was finally concluded that outsourcing of airport operations to a foreign entity should restricted to IIA in the first go to be followed with others in due course with subsequent approval process.

IFC “gave a presentation to the committee which took decisions as to the future roadmap for moving forward for outsourcing of the first airport in order to improve service delivery and match best international practices,” said an ambiguous brief public statement after the meeting.

Strangely though, the Econ*omic Coordination Comm*ittee (ECC) had decided on March 31 to kick off a 25-year outsourcing of operations and land assets at three major airports, to be run through a public-private partnership, to generate foreign exchange reserves, according to a then finance ministry’s statement.

“The outsourcing of three airports has been initiated within the scope of public-private partnership… to engage private investor/airport operator through a competitive and transparent process to run the airports, develop appertaining land assets and enhance avenues for commercial activities and to garner full revenue potential,” the finance ministry had said.

The IFC and Pakistan Civil Aviation Authority (PCAA) had subsequently signed transaction service agreement in the second week of April followed by visits of the technical teams of adviser to the three airports.

The single bidder — IFC — was also given a step-wise payment structure besides a $4 million success fee on completion of outsourcing at the rate of $1.5m for each airport.

...
https://www.dawn.com/news/1761977/govt-looking-to-outsource-islamabad-airport-only

 

[Gharib Aadmi]

Pakistan needs as much privatization as possible, so this is a step in the right direction. As long as the govt of Pakistan manages state run enterprises they will be nothing but an employment bureau for political workers.