Finance Minister Ishaq Dar chaired the meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) today.
The CCoIGCT considered a summary of the Ministry of Maritime Affairs regarding the G2G agreement between the governments of the United Arab Emirates and Pakistan on Cooperation for the Development of Bulk and General Cargo Terminal at East Wharf at Karachi Port under Inter-Governmental Commercial Transaction Act, 2022.
The Ministry of Maritime Affairs (MoMA) informed the CCoIGCT that Karachi Port consists of Wharves East, West, and South containing five terminals. Three docking terminals are outsourced to Terminal Operating Companies (TOC) while the remaining two i.e. Oil Terminal and Clean Bulk Cargo Terminal (CBCT) are presently operated by the KPT.
The CBCT was handed over to KPT in 2016 after the same was built with a loan from the World Bank. In 2019 KPT proceeded to outsource the CBCT by inviting E01 from TOCs. In the pre-qualification stage, eleven TOCs were declared qualified by NESPAK whereas only Q-Terminal submitted technical proposals.
KPT decided to go for international bidding but at the time the consultants finalized the tender documents, the AD Port approached the government of Pakistan and KPT through UAE’s Ambassador expressing its interest in the operation of the two terminals on East Wharf.
KPT further informed that the gross revenue of CBCT is Rs. 3,100 million per annum and repayment of the loan is Rs. 3,000 million while operating expenses are Rs. 675 million.
The KPT ends up with a deficit amount of Rs. 575 million per annum. The MoFA has also been tracking the progress of KPT’s outsourcing efforts since 2022 for offering CBCT to the State of Qatar.
In May 2023 SAPM for Foreign Affairs informed that CBCT can be offered to Saudi Arabia. The KPT also on its own approached the Q-Terminal and indicated interest to the extent of participating in the bidding.
In the meantime, MoFA forwarded the UAE Ambassador’s letter enclosing the G2G Agreement between the Government of the United Arab Emirates and the Government of Pakistan for the Development of Bulk and General Cargo Terminal at East Wharf, Karachi Port.
Framework Agreement Committee, therefore, recommended that the draft Agreement may be placed before the Cabinet Committee on inter-governmental Commercial Transactions for consideration and recommendation for the Federal Cabinet for granting approval in terms of Rule-16(1)(h) of Rules of Business, 1973.
Moreover, CColGCT during its meeting held on 19-7-2023 had desired that sponsoring the ministry of the proposal must ensure that the transaction is being carried out with a Government owned entity as required under G2G Agreement. Therefore, MoFA was requested to confirm that AD Port is a UAE government entity.
MoMA asked the CCoIGCT to approve the criteria for the purpose of price discovery by the negotiation committee to be nominated by the CColGCT. In addition, a committee may be constituted to negotiate price discovery on criteria indicated in para-6 and frame a Commercial Agreement to be signed between KPT and AD Port, UAE.
The price negotiation committee may submit its recommendations for the approval of the Cabinet through CColGCT.
Federal Minister for Maritime Affairs Syed Faisal Ali Subzwari, Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir, Minister of State for Petroleum Musadik Malik, SAPM on Finance Tariq Bajwa, Secretary Finance, Secretary Maritime Affairs, Secretary Law & Justice, Secretary Commerce, and other senior officers attended the meeting.
