June 22, 2023 [Link News]- AD Ports Group (ADX:ADPORTS), a global leader in trade, logistics, and industry, has signed a concession agreement with Karachi Port Trust (KPT), the Pakistani federal government agency that oversees the operations of the Port of Karachi.
Under the terms of the 50-year concession agreement, a Joint Venture between AD Ports Group, as a majority shareholder, and Kaheel Terminals, a UAE-based company has been formed to manage, operate and develop the Karachi Gateway Terminal Limited (KGTL), berths 6-9 at Karachi Port’s East Wharf.
The JV will undertake significant investments in infrastructure and superstructure over the next 10 years, with the bulk of it planned for 2026.
The development works will include deepening of berths, extension of quay walls, and an increase in container storage area.
As a result, the terminal will be able to handle Post Panamax class vessels of up to 8,500 TEUs (Twenty-Foot Equivalent Units) and container capacity will increase from 750,000 to 1 million TEUs per annum.
This expansion and enhancement will further cement the Terminal and Karachi’s position as a key player in the maritime industry.
The Terminal’s operations are all dollarised with no foreign exchange exposure to the Pakistani Rupee. Historically, the terminal has been generating revenue of around $55 million and EBIDTA or around $30 million annually.
This strategic agreement follows the preceding signing of a Memorandum of Understanding, which inked both entities shared vision to drive growth, promote trade diversification, and strengthen bilateral ties between the UAE and Pakistan.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group said, “AD Ports Group is delighted to embark on this landmark concession agreement with KPT, which exemplifies AD Ports Group’s strategy of investing in key maritime trade routes for the UAE.
He added, “Replicating our successful integrated business model in regions that offer long-term, sustainable growth prospects.
This agreement has the potential to unlock a new chapter of growth and progress for both the UAE and Pakistan, enabling to strengthen ties with key trading nations and leading to increased economic growth and prosperity.
“We foresee significant opportunities ahead, together, in line with our wise leadership’s vision, we will redefine the maritime landscape and create value for all stakeholders.” He further added.
Faisal Subzwari, Pakistan Minister for Maritime Affairs, said, “The UAE and Pakistan have a strong and long-standing relationship, which is experiencing continuous growth in the areas of trade and investment due to our leadership’s commitment to further strengthen ties.”
The signing of this agreement underscores both nation’s shared vision for the development of port infrastructure and sets the stage for a prosperous global maritime ecosystem.
Syed Syedain Raza Zaidi, Chairman, KPT, said, “This landmark agreement between AD Ports Group and KPT marks a significant milestone and holds big potential for the growth and development of Karachi Port.”
“By joining forces, we are paving the way for a thriving container terminal that will enhance efficiency, attract investment, and stimulate the economy.” Syed Syedain added.
The UAE was Pakistan’s number one regional trading partner in 2021, accounting for over 40% of Pakistan’s trade with Arab countries, with non-oil exports from the UAE to Pakistan valued at nearly AED 4.8 billion ($1.3bn) in 2022 according to Pakistan’s Ministry of State for Foreign Trade.
Additionally, re-exports from the UAE to Pakistan amounted to AED 10.6bn (US$ 2.9bn), reflecting a 7.7% growth compared to 2021.
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