It is expected that Pakistan may soon strike a deal with the United Arab Emirates (UAE) to hand them over the operations of Karachi Port Terminals. Pakistan will have the right to take over the terminals in case of a national emergency or under supreme security conditions. A negotiation committee has been constituted to take the deal forward. It may mark the first intergovernmental transaction under a law enacted last year to raise emergency funds.
Pakistan’s Finance Minister Ishaq Dar chaired the meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions. A panel will be formed to make the negotiations between the Karachi Port Trust (KPT) and the UAE government and will be headed by Pakistan’s Minister of Maritime Affairs Faisal Sabzwari.
The committee members include the additional secretaries of Finance and Foreign Affairs, the special assistant to PM Jehanzeb Khan, the Chairman of the Karachi Port Terminal (KPT), and the general managers of the KPT.
The negotiation committee has also been permitted to finalise a draft operation, maintenance, investment, and development agreement under the government-to-government arrangements with a nominated agency of the UAE for handing over the Karachi port terminals
Pakistan aims to reach a deal to hand over the terminals to Abu Dhabi Ports (ADP), a subsidiary of the AD Ports Group.
Pakistan’s crumbling finances have been the talk of the town for almost a couple of years now. In fact, the inter-governmental transactions law was passed a year ago to help raise emergency funds, as the country struggles with record inflation, fiscal imbalances, and low reserves. The law was passed keeping in mind the expiry of Pakistan’s agreement for USD 6.5 billion with the International Monetary Fund. The agreement was signed in 2019 and is set to expire this month.
Initially, the UAE resisted giving Pakistan credit and had also pressurised it to sell shares. Moreover, it later pledged USD 1 billion, which has yet to be disbursed.