AD Ports Group, a global leader in trade, logistics, and industry, has announced the signing of a new 25-year concession agreement for bulk and general cargo operations with Karachi Port Trust (KPT), the Pakistani federal government agency that oversees the operations of the port.
Under the terms of the deal, Karachi Gateway Terminal Multipurpose Limited (KGTML), a joint venture between AD Ports Group and Kaheel Terminals, a UAE-based company, will develop, operate and manage cargo terminal berths 11 to 17 at Karachi Port’s East Wharf.
This agreement builds upon the concession agreement secured by AD Ports Group to develop, operate and manage Karachi Gateway Terminal Limited (KGTL) container terminal berths 6-10 at Karachi Port’s East Wharf in June last year, stated the Emirati group in its statement.
In addition to the 800m quay for the container terminal, this new concession grants the JV 1,500 m of additional quay wall for general cargo and bulk operations adjacent to the container terminal and thus gives full operational control of Karachi Port’s East Wharf.
General cargo operations will primarily handle steel, paper and clinker, while the clean bulk terminal will focus on grains and fertilisers, it stated.
As per the deal, the AD Ports Group JV plans to invest $75 million into the project over the first two years, including upfront fees, prepayments and investments in superstructure and equipment.
This will be followed by a further investment of $100 million within five years which will be used to increase efficiency and capacity by 75%, enabling the terminal to handle up to 14 million tonnes per annum, stated the Emirati group.
Dr Thani bin Ahmed Al Zeyoudi, the UAE Minister of State for Foreign Trade, said: “This agreement comes as an extension of the strong bonds between the UAE and Pakistan. It also reflects the UAE’s openness to trade and investment globally, expanding its network of trade partners, and creating trade routes that link the world.”
It also highlights the shared vision of the two countries on the importance of supporting the maritime sector and enhancing its capabilities to serve the development goals, he added.
As part of the agreement, the AD Ports JV will take over East Wharf’s existing operations, ensuring the transaction will be earnings accretive immediately upon completion.
The bulk and general cargo terminal, which has been handling around 8 million tons per annum historically, is expected to generate revenue of around $30 million and ebitda of around $10 million annually in the short term, with the terminal’s operations being dollarised, and grow in the medium term as upgrade and capacity investments materialise.
Group Managing Director and CEO Captain Mohamed Juma Al Shamisi said: “By extending our cooperation with Karachi Port Trust and investing in key maritime trade routes for the UAE, AD Ports Group is reaffirming its commitment towards strengthening its connectivity within the region.”
“We aim to transform Karachi Port into a dynamic hub for global trade, equipped with leading-edge infrastructure and innovative digital solutions. AD Ports Group remains aligned with our wise leaders’ vision and will continue to spearhead strategic partnerships that drive economic diversification,” he added.