UAE-based company to oversee operations and development of Karachi Gateway Terminal for 50 years

The AD Ports Group, based in the United Arab Emirates (UAE), has entered into a 50-year concession agreement with the Karachi Port Trust (KPT) to manage and develop the Karachi Gateway Terminal Limited (KGTL).

The group will invest $220 million in infrastructure development over the first 10 years of the agreement. This agreement is particularly significant as Pakistan seeks external financing to support its struggling economy.

According to the terms of the agreement, a joint venture has been established between AD Ports Group and Kaheel Terminals, a UAE-based company, with AD Ports Group as the majority shareholder. The joint venture will oversee the management, operation, and development of the KGTL, specifically berths 6-9 at Karachi Port’s East Wharf.

The infrastructure investment will focus on deepening berths, extending quay walls, and expanding the container storage area. These enhancements will enable the terminal to accommodate larger vessels and increase its annual container capacity from 750,000 to 1 million TEUs.

Captain Mohamed Juma Al Shamisi, the Managing Director and Group CEO of AD Ports Group, expressed enthusiasm about the concession agreement, stating that it aligns with the group’s strategy of investing in strategic maritime trade routes. He believes that this agreement has the potential to bolster the economies of both the UAE and Pakistan, foster stronger relationships with key trading partners, and drive economic growth and prosperity.

The terminal’s operations are denominated in US dollars, minimising exposure to fluctuations in the Pakistani rupee. The terminal has historically generated revenues of approximately $55 million and an annual EBIDTA of around $30 million.

The UAE and Pakistan have a robust trade relationship, with the UAE serving as Pakistan’s leading regional trading partner in 2021. Bilateral trade between the two countries accounted for over 40 per cent of Pakistan’s trade with Arab nations. In 2022, non-oil exports from the UAE to Pakistan amounted to nearly AED 4.8 billion ($1.3 billion), while re-exports from the UAE to Pakistan reached AED 10.6 billion (US$2.9 billion), demonstrating a 7.7 per cent growth compared to 2021.

According to Geo, the agreement between AD Ports Group and KPT has been hailed as a significant milestone by Syed Syedain Raza Zaidi, Chairman of Karachi Port Trust. Zaidi believes that this collaboration will pave the way for a thriving container terminal, driving efficiency, attracting investment, and stimulating economic development in Karachi.