KARACHI, Aug 26: Port Qasim has made great achievement on getting its royalty enhanced for the existing container terminal from $4 per move to $9.2 per move.

This is on a par with the changes agreed on for new terminal being constructed by the Dubai Ports World on `built operate and transfer’ basis at a cost of Rs211 million and expected to be completed in a period of three to five years.

The DP World, which is presently operating first container terminal -– Qasim International Container Terminal (QICT) -– after purchasing its rights from P&O Australia, has also agreed to transfer the terminal back to the PQA along with the new terminal after 30 years of commercial operations.

This will be the first terminal of the country to be entirely built and developed by the private sector and thereafter operate it. So far most of the container terminals have been developed by ports themselves and later handed over on a long-term lease to the private operators.

Under the recently concluded agreement between the DPW and the PQA, once the 2nd container terminal was completed the royalty charges of the existing terminal would also be matched with the new terminal rate at $9.2 per move from the current rate of $4 per move. This would mean that the PQA would be increasing its income by $14.2 per move when both terminals come into operations.

It is a green field project, as the DPW will have to under take entire development work while the PQA will only hand over water front measuring around 25 hectare which has to be totally reclaimed for constructing two jetties of 711 metres length.

The new container terminal would be in a position to accommodate post-Panamax category vessels with 290-metre length, and the PQA will have to dredge the approach to the depth of 14 metres.

Although the agreed completion period was seven years, the DPW intends to complete it in three to five years time. However, under the original plans the DPW will have to complete phase one in three years and start handing 0.3 million TEUs, and in second phase 0.75 million and third phase 1.15 million TEUs.

The existing terminal QICT was originally handed over on `built operate and own’ basis, but under the new agreement with the DPW it will also be given back to the PQA after the expiry of 30 years lease or commercial operational period. It is annually handing around 0.6 million TEUs per annum against its designed capacity of 0.5 million TEUs.

Port Qasim Authority Chairman Vice-Admiral M. Asad Qureshi told Dawn that the government awarded the 2nd container terminal to the DPW on a condition that royalty and changes of existing terminal should be enhanced and that its terms of BOO be converted to BOT with 30 years as commercial operation period, which was in conformity with landlord concept of port operation.

He said the average annual income out of these two terminals for 30 years would come to around Rs2 billion. Mr Qureshi said since both the terminals would be charged $9.2 per move their total annual turnover of TEUs would come to around 1.7 million TEUs. This means that annual income for the PQA from these two containers would be around $1 billion (Rs60 billion), and for a period of 30 years it would come to around Rs2 billion per annum.

In reply to a query, the PQA chairman said so far no tender was issued for the 2nd container terminal and only expressions of interest (EoIs) were invited. The last date for EoIs was August 31, 2006. However, the withdrawal of EoI was also notified on the advice of legal expert.

Above all, Mr Qureshi said in the original EoI there was a clause that gave the PQA the right to accept or reject any or all bids and offers without assigning any reason thereof and no claim of whatsoever nature in this regard shall be entertained.

He said further that presently the PQA handled around 42 per cent of country’s external trade and there was a big scope of further rise in container cargo tariff, as fairly a large quantity of cargoes were still coming in bulk and had to be containerised in due course. Citing an example, he said presently sugar, wheat, cement and pulses had come in bulk, whereas in developed countries the concept of bulk cargo had been totally eliminated.

He said the PQA was integrated industrial port operating under the landlord concept. Accordingly, the port infrastructure and terminals have been established through private sector investment. Mr Qureshi said there were specialised terminals such as FOTCO oil terminal, QICT container terminal, EVTL liquid chemical terminal.

An LPG terminal has been recently constructed by PROGAS of Malaysia and presently under going testing and commissioning. Furthermore, he said the ground-breaking ceremony of a liquid cargo terminal was held on July 25 this year. New terminals like LNG, grain and fertiliser and coal, cement and clinker are in the pipeline.

The PQA chairman said the port had attracted direct foreign investment to the tune of $1.5 billion and other investment is in the pipeline. This is in addition to local and indirect investment.

In the port’s industrial estate, he said, 90 industrial units had been established and 73 are under construction.