The Karachi Gateway Terminal Ltd (KGTL) is planning up to $100 million in new investment within five years as Pakistan tries to cut freight costs and turn a cargo surge triggered by the Iran war into longer-term regional shipping gains.

KGTL, backed by Abu Dhabi Ports Group, has already completed a $60m dredging project at Karachi Port and is expanding container and bulk-handling facilities, Chief Executive Officer (CEO) Khurram Aziz Khan told Reuters in an interview.

“We are targeting another $75 million to $100 million” within five years, Khan said, adding that the next phase would focus on expanding the container terminal, enhancing yard capacity, larger ship and yard cranes, dedicated bulk export infrastructure, silos, warehouses and automated conveying.

KGTL is also exploring investment in rail freight, including locomotives, rolling stock and storage hubs near agricultural areas, to link those areas to ports and help Pakistan export products such as corn and rice more competitively, he said.

“For transit as well, you need to provide a complete solution,” Khan said.

“We are ready to invest in that as well, to bring our own rolling stock and locomotive for the freight trains business.”

Disruption in traffic

The disruption in maritime traffic due to the US-Israel war on Iran created a new opportunity for Pakistan to act as a transshipment hub, as cargo was rerouted through Karachi for onward shipment to other destinations during the conflict, Khan said.

“Pakistan has never really handled transshipment volume,” he said.

“This conflict has created this opportunity for Pakistan.”

The dredging project is expected to allow Karachi Port to handle bulk vessels of up to 120,000 metric tonnes, from about 60,000 tonnes previously, once Karachi Port Trust (KPT) issues revised handling parameters expected within days, Khan said.

KGTL is upgrading its bulk terminal to cut handling time for a 60,000-tonne vessel to about 2.5 to 3 days from 12 to 15 days, while building silos with annual capacity of 8.5m tonnes for clean bulk cargo to secure national food security, bulk-export warehouses and systems for fertiliser imports.

But sustaining the gains will depend on better road and rail links, the KGTL CEO said.