The Abu Dhabi (AD) Ports Company of the UAE has got control of Karachi Port terminals on lease for 50 years under a deal signed on Thursday. The $220 million agreement would enable the company to take over four berths from the state-owned handling agency, Karachi Port Trust (KPT).

Under the terms of the 50-year concession agreement, a joint venture between AD Ports Group and UAE-based company Kaheel Terminals has been formed to manage, operate and develop the Karachi Gateway Terminal Limited (KGTL), berths 6-9 at Karachi Port’s East Wharf.

The deal is expected to attract a much-needed investment of over $2 billion to expand and modernise shipment facilities, and establish special economic zone and rail connectivity between KPT and Port Qasim.

“The JV will undertake significant investments in infrastructure and superstructure over the next 10 years, with the bulk of it planned for 2026,” said a statement from the company.

The development works will include:

• Deepening of berths
• Extension of quay walls
• 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.

Karachi Port is Pakistan’s oldest and busiest, with 33 berths, and the UAE deal will see the joint venture lease four of them for the next 50 years.

An upfront investment of Rs50 million would be followed by further investment in the Pakistan International Containers Terminals (PICT) and Port Qasim and up-gradation will result in 12.5 % enhanced royalty, Federal Minister for Maritime Affairs Faisal Sabzwari said at the event.

All the 634 top to bottom rank employees would be hired by AD Ports Group that will manage, operate and develop the KGTL, he added.

“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,” said the statement.