AD Ports signs deal for bulk, general cargo terminal at Karachi Port

AD Ports Group announced the signing of a new 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 of Karachi.

Under the terms of the 25-year concession agreement, Karachi Gateway Terminal Multipurpose Limited (KGTML), a Joint Venture between AD Ports Group, as a majority shareholder, and Kaheel Terminals, a UAE-based company, will develop, operate and manage the Bulk and General Cargo terminal berths 11-17 at Karachi Port’s East Wharf, further enhancing Karachi’s position as a key player in the maritime industry.

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 2023.

In addition to the 800 meters quay for the container terminal, this new concession grants the Joint Venture 1,500 meters 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.

The Joint Venture plans to invest approximately ₹75 million in the first two years, including upfront fees, prepayments and investments in superstructure and equipment, followed by further investment of USD 100 million within 5 years which will be used to increase efficiency and capacity by 75%, enabling the terminal to handle up to 14 million tonnes per annum.

As part of the agreement, the Joint Venture 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 USD 30 million and EBIDTA of around USD 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.

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.

Mohamed Juma Al Shamisi, managing director and Group CEO, AD Ports Group, 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.”

Pakistan plays a crucial role as a gateway to landlocked nations throughout Asia. The Commonwealth of Independent States (CIS) have become a significant trade corridor between East and West in the current global geopolitical context. This new concession further consolidates AD Ports Group’s position as a highly invested and cost effective enabler of trade for the CIS countries by contributing to the supply chain extending to that region creating competitive access to World markets.