ISLAMABAD: The Karachi Port Trust (KPT) has served a $2 million recovery notice to Hutchison Ports Pakistan (HPP) — the operator of the deep-water Karachi International Container Terminal (KICT) since 1998 – for not fulfilling the terms of the agreement.

According to the sources, HPP was to pay a $21.6m royalty to KPT under the agreement but Hutchison paid only $19.6m related to rental charges and royalties for land leased to the company in 2005.

Non-payment by the KICT has allegedly caused a significant financial loss to the national exchequer and the National Accountability Bureau (NAB) is investigating the allotment of land to KICT.

The initial reports suggest that malpractices by both the KPT and the KICT have caused a staggering financial dent of Rs22 billion to the national exchequer.

NAB was investigating the alleged illegal allotment of additional berths and other areas totalling 10,000 square metres in 2005 through the execution of an amendment agreement at a lower rate of royalty charges without public bidding.

Besides, a complaint has also been registered at NAB, Karachi against the officers of KPT for handing over 24,126 square metre to KICT without fulfilling proper regulatory requirements, and without enhancing the royalty amount, which caused financial loss to the KPT.

A KPT spokesperson declined to comment on the recovery notice served on HPP saying the matter was pending in the courts and under investigation at NAB.

Published in Dawn, March 26th, 2023