Karachi Port's Bulk, General Cargo Terminal development gets go-ahead with $50mn concession agreement

August 10, 2023 (MLN): The Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) on Wednesday approved the recommendations of the negotiation committee for the development of Bulk and General Cargo Terminal, at Karachi Port, said a press release issued on the same day. 

Under the approved terms, the prospective concessioner is mandated to make a substantial upfront investment of $25 million as a non-refundable and non-adjustable goodwill gesture. The UAE government-owned firm, a crucial player in this partnership, will further contribute an upfront payment of $25mn.

This sum is designed to be adjustable against revenue sharing for the subsequent seven years. The revenue-sharing model stipulates an annual payment of $3mn for the first five years, followed by a higher contribution of $5mn for the ensuing two years.

The development of the terminal is slated to commence in September 2023, as part of the concessioner's commitment to modernization. This initiative marks a pivotal step toward upgrading the facilities, ensuring they align with contemporary industry standards.

In a bid to establish a seamless operational framework, the Committee also reached a decision designating AD Ports with the responsibility for all liabilities associated with the Karachi Dock Labor Board (KDLB). 

With the negotiation committee's recommendations now approved with amendments, the commercial agreement will be forwarded to the Federal Cabinet for the final endorsement, highlighting the government's commitment to fostering strategic and sustainable growth in the region.

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