ISLAMABAD: After the transfer of container terminal, the government has decided in principle to hand over the bulk and general cargo terminal at Karachi Port’s East Wharf to Abu Dhabi Ports through a government-to-government deal under the Inter-Governmental Commercial Transaction Act, 2022.

To implement the decision, the cabinet committee on inter-governmental commercial transactions (CCoIGCT), led by Finance Minister Ishaq Dar, on Wednesday allowed negotiations on a framework agreement with the UAE and constituted a committee, comprising the secretaries of law and maritime affairs, as well as representatives of the foreign affairs and finance ministries, to finalise a draft framework agreement with the government of UAE.

The CCoIGCT meeting was attended, among others, by Minister for Maritime Affairs Faisal Ali Subzwari, Commerce Minister Naveed Qamar, Power Minister Khurram Dastgir Khan, Minister of State for Petroleum Musadik Malik, SAPM on Finance Tariq Bajwa and SAPM on Revenue Tariq Mehmood Pasha briefed the meeting that Ministry of Foreign Affairs (MOFA) had forwarded a draft Framework Agreement and Expression of Interest (EOI) to be signed between the AD Port, Government of the United Arab Emirates and Karachi Port Trust (KPT), Government of the Islamic Republic of Pakistan for the ’Development of Bulk and General Cargo Terminal and developing associated infrastructure at East Wharf Karachi Port.

The draft framework agreement, received from MoFA, was sent to KPT for scrutiny. The KPT board recommended to the MOMA to take up the matter further in accordance with prevailing laws. Simultaneously, the draft framework agreement was also shared with MoFA and the Law Division.

The law ministry did not raise any objection and stated that the maritime affairs ministry should take a decision on administrative aspects.

The Ministry of Foreign Affairs “granted NOC from a political point of view”.

The meeting was informed that in terms of Section 3 of the Inter-Governmental Commercial Transactions Act, “the federal government may enter into an agreement with any state for the purposes” of commercial transactions. These include broad parameters and mechanism for execution of intended commercial transaction.

Under the same act, the cabinet committee had constituted the CCoIGCT and empowered it to authorise negotiations for concluding an agreement with any country, constitute committees and recommend approval of the agreement to the cabinet.

The cabinet committee constituted the CCoIGCT to discuss a framework agreement and commercial terms with the UAE and the AD Ports.

The KPT has already handed over the control of container terminal (berths 6 to 9 at East Wharf) to AD Ports of UAE for 50 years after negotiations for an upfront $50 million price for existing fixed infrastructure and a $102m investment in five years for infrastructure development, $18m royalty and an annual rent of Rs1,100 per square metre ­— just Rs7 higher than for previous operators of container terminal — without any independent assessment.

Published in Dawn, July 20th, 2023