AD Ports Group, Karachi Port Trust extend collaboration with 25-year concession deal

Pakistan’s maritime industry is set for expansion with AD Ports Group signing a deal to boost bulk and general cargo operations at Karachi Port Trust’s East Wharf.

The 25-year concession agreement with Pakistan’s federal government agency overseeing operations signifies a pivotal deal aimed at developing, operating, and managing cargo terminal berths 11-17 at East Wharf.

The latest contract builds on the partnership secured by AD Ports Group in June 2023, extending their engagement in the development, operation, and management of container terminal berths 6-10 at Karachi Port Trust’s East Wharf, known as Karachi Gateway Terminal Multipurpose Ltd.

In accordance with the agreement, KGTML — a joint venture primarily led by AD Ports Group and co-partnered with Kaheel Terminals, a UAE-based company — will oversee the development, operation, and management of bulk and general cargo terminal berths 11-17 at Karachi Port’s wharf.

This new concession, complementing the existing 800-meter quay for the container terminal, will provide the joint venture with an additional 1,500 meters of quay wall for general cargo and bulk operations adjacent to the container terminal, granting full operational control of the wharf.

General cargo operations will primarily involve steel, paper, and clinker, while the clean bulk terminal will focus on grains and fertilizers.

The joint venture plans to allocate approximately $75 million in the initial two years, covering upfront fees, prepayments, and investments in infrastructure and equipment.

Moreover, a subsequent investment plan of $100 million within the next five years is envisioned. This funding aims to boost efficiency and capacity by 75 percent, enabling the terminal to handle up to 14 million tonnes annually.

As part of the agreement, the joint venture will assume control of East Wharf’s existing operations, ensuring immediate earnings accretion upon completion.

In the short term, the bulk and general cargo terminal, overseeing around 8 million tonnes annually, is expected to generate approximately $30 million in revenue and around $10 million in earnings before interest, taxes, depreciation, and amortization.

The operations of the terminal are conducted in dollars and are anticipated to expand in the medium term as investments in upgrades and capacity become tangible.

In the press statement, the UAE’s Minister of State for Foreign Trade, Thani bin Ahmed Al-Zeyoudi, expressed that the agreement is an extension of the robust 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,” he added.

Al-Zeyoudi further emphasized that the deal underscores the shared vision of the two countries regarding the significance of bolstering the maritime sector and enhancing its capabilities to advance development goals.

“We look forward to continuing to work with the Pakistani side to foster industrial growth, and unlock new avenues for investment and economic development, whilst realizing our wise leaders’ shared vision of progress and prosperity,” the minister concluded.

In his statement, Mohamed Juma Al-Shamisi, managing director and CEO at AD Ports Group, highlighted that by extending cooperation with KPT and investing in key maritime trade routes for the UAE, his group is reaffirming its commitment to strengthen connectivity within the region.