ISLAMABAD: The Cabinet Committee on Inter-governmental Commercial Transactions (CCoIGCT) has approved G2G agreement between the Governments of UAE & Pakistan on Cooperation for the Development of Bulk and General Cargo Terminal at East Wharf at Karachi Port under Inter-Governmental Commercial Transaction Act, 2022.
Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar chaired the meeting of the CCoIGCT.
Sources said that the Ministry of Maritime Affairs informed the CCoIGCT that Karachi Port consists of 03 Wharves as East, Wcst and South containing 05 terminals. Three docking terminals outsourced to Terminal Operating Companies (TOC) while remaining two i.e. Oil Terminal and Clean Bulk Cargo Terminal (CBCT) are presently operated by the KPT.
The CBCT was handed over to KPT in 2016 after the same was built from a loan from the World Bank. In 2019 KPT proceeded to outsource the CBCT by inviting E01 from TOCs.
In the pre-qualification stage eleven TOCs were declared qualified by NESPAK whereas only Q-Terminal submitted technical proposals.
KPT decided to go for international bidding but at the time the consultants finalized the tender documents, the AD Port approached the government of Pakistan and KPT through UAE’s Ambassador expressing its interest in operation of the two terminals on east Wharf.
KPT further informed that gross revenue of CBCT is Rs 3100 million pa and Repayment of loan is Rs 3000 million, operating expenses is Rs 675 million.
The KPT ends up with a deficit amount of Rs 575 million pa. MoFA has also been tracking the progress of KPT’s outsourcing efforts since 2022 for offering CBCT to the State of Qatar.
In May, 2023 SAPM for Foreign Affairs informed that CBCT can be offered to Saudi Arabia (KSA). The KPT also on its own approached the Q-Terminal who indicated interest to the extent of participating in bidding.
In the meantime, MoFA forwarded UAE Ambassador’s letter enclosing G2G Agreement between the Government of the United Arab Emirates and Government of the Islamic Republic of Pakistan for the Development of Bulk and General Cargo Terminal at East Wharf Karachi Pon.
Framework Agreement Committee, therefore, recommended that the draft Agreement may be placed before the Cabinet Committee on inter-governmental Commercial Transactions for consideration and recommendation for the Federal Cabinet for granting approval in tem. of Rule-16(1)(h) of Rules of Business, 1973.
Moreover, CColGCT during its meeting held on 19-7-2023 had desired that sponsoring the Ministry of the proposal must ensure that the transaction is being carried out with a Government owned entity as required under G2G Agreement. Therefore, MoFA was requested to confirm that AD Port is a UAE government entity.
MoMA asked the CCoIGCT to approve the criteria for the purpose of price discovery by the Negotiation Committee to be nominated by the CColGCT.
In addition, a Committee may be constituted to negotiate price discovery on criteria indicated as in para-6 and frame a Commercial Agreement to be signed between KPT and AD Port, UAE.
The Price Negotiation Committee may submit its recommendations for the approval of Cabinet through CColGCT.
