UAE’s AD Ports signs 50-year concession deal with Karachi Port Trust

UAE’s AD Ports Group has signed a 50-year concession agreement with Karachi Port Trust to operate and develop the Karachi Gateway Terminal, berths 6 to 9 at Karachi Port.

Under the terms of the agreement, AD Ports, as a majority shareholder and UAE-based Kaheel Terminals, have formed a joint venture (JV) to undertake significant investments in infrastructure and superstructure over the next 10 years, with the bulk of it planned for 2026.

“This joint venture signifies our dedication to investing in increasing capacity and advanced infrastructure that will not only benefit trade and maritime business but will also enhance the region’s connectivity and drive the objectives of both nations towards economic resilience and diversification,” said Suhail bin Mohammed Al Mazrouei, the UAE Minister of Energy and Infrastructure.

The development works will include the deepening of berths, the extension of quay walls, and an increase in the container storage area.

Following the investments, 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 one million TEUs per annum.

The expansion and enhancement are expected to further cement the terminal and Karachi’s position as a key player in the maritime industry.

AD Ports said in a statement that the Karachi Gateway Terminal’s operations are all dollarised with no foreign exchange exposure to the Pakistani Rupee. Historically, the terminal has been generating revenue of around $55m and earnings before interest, taxes, depreciation and amortisation (EBITDA) of around $30m annually.

AD Ports boosts Pakistan presence

AD Ports also signed three MoUs with Pakistan to establish a framework for cooperation in improving transportation infrastructure, facilitating efficient cargo movement, reducing logistics costs, and enhancing the competitiveness of Karachi Port or any other projects of mutual interest.

“This milestone agreement will bolster the terminal’s capacity, further enhancing its attractiveness to international trade partners to contribute to the growth of Karachi’s position as a key player in the global trade industry,” said Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade.

“AD Ports is not only investing in the development of the Karachi Gateway Terminal but also setting the stage for greater cooperation and mutual benefit between the UAE and Pakistan.”

The ports operator will provide technical expertise, advice, and support to the Government for the planning, design, and implementation of trade, customs and logistics infrastructure projects within the country.

Under the rail connectivity deal, AD Ports and the Pakistani government agreed to collaborate under a bilateral framework of cooperation to develop and upgrade the connectivity of Karachi Port to the railway systems. The parties agreed to cooperate to develop digital trade and logistics solutions including customs digitalisation.

AD Ports also partnered with Port Qasim Authority to develop, operate and manage industrial and/or free zone facilities in the Port Qasim area.

“The signing of the concession agreement with Karachi Port Trust, and the three MoUs, exemplify AD Ports Group’s strategy of investing in key maritime trade routes for the UAE, replicating our successful integrated business model in regions that offer long-term, sustainable growth prospects,” said Mohamed Juma Al Shamisi, managing director and Group CEO of AD Ports Group.

Al Shamisi said the concession agreement, has the potential to unlock a new chapter of growth and progress for both the UAE and Pakistan. The UAE was Pakistan’s number one regional trading partner in 2021, accounting for over 40 per cent of South Asia’s trade with Arab countries. Non-oil exports from the UAE to Pakistan are valued at nearly $1.3bn (Dhs4.8bn).

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