KARACHI, May 17: International Finance Corporation (IFC) will give $9.25 million for development and operation of a container terminal in Pakistan. The amount includes $7.75 senior loan and $1.50 sub-ordinate loan.

Pakistan International Container Terminal Ltd. which is going to set up a container terminal at Karachi Port signed an agreement with IFC here on Saturday to get $9.25 million funding.

PICT Chairman, Captain Haleem A Siddiqui and Regional Director of IFC for the Middle East and North Africa Sami Haddad signed the agreement.

Sami said that the $9.25 million loan would be the first IFC financing in an infrastructure project in Pakistan. Capt. Haleem A Siddiqui said the $30 million container terminal would be constructed at berths no 6-9 of Karachi Port, and handle 150,000 TEUs container cargo per year from April 2004. He said that OPEC (organization of petroleum exporting countries) Fund had also committed $7.75 million loan for the project. “This will be the first ever OPEC Fund financing here,” he said.

Capt. Siddiqui said PICT container terminal, the second one to be built at Karachi Port, would improve container handling at the port and benefit the shipping lines and exporters and importers. He said that PICT would be listed on Karachi Stock Exchange and would be the first such port infrastructure project in Pakistan.

Federal Minister for Privatization and Investment Dr. Abdul Hafeez Shaikh who was present at the signing ceremony said there was a need to lure private sector investment into infrastructure projects. “Because that is where the government cannot make huge investment...and that is also where the rewards are,” he said.

The minister shared the views of Capt. Siddiqui on the need for simplifying procedures and removing bureaucratic hassles to attract private sector investment into infrastructure projects.

“Regulatory framework must be simplified or at least made less complex,” he observed. Capt. Siddiqui had lamented in his speech that it took him 14 long years to get the final approval for this project.

Karachi Port Trust chairman, Vice Admiral Ahmad Hayat, could not resist the urge to clarify that Karachi Port is not costlier than those in this region. “I agree that in some sector we may not be providing the state of the art services but we are not...I repeat we are NOT more expensive than other regional ports,” he claimed.

IFC Regional Director Sami Haddad had said earlier that the operations at Karachi Port were slow and costlier than many other ports in the region. He had also said that the total impact of the inefficiencies at ports was causing Pakistan an annual loss equal to 1.5 per cent of its GDP.

The KPT chief told the audience that the port management was going to privatize bulk cargo terminal soon—and would also set up a cargo village. He said all efficiency improvement efforts of Karachi Port were primarily aimed at capturing regional markets.

Eighty per cent of all container cargo is handled at Karachi Port — the premier port of Pakistan. Container traffic currently at 950,000 TEUs per annum is growing at a rate of 8 per cent.