ISLAMABAD: The government on Monday decided to hold formal negotiations with the UAE’s Abu Dhabi Ports (ADP) for the speedy transfer of the Container Terminal from Karachi Port Trust (KPT).

This may be the first commercial transaction for the divestment of public sector assets to friendly countries under a recently enacted law – Inter-Governmental Commercial Transaction Act 2022 – through direct negotiations in a speedy manner without going through the tedious and long-drawn process under the privatisation law.

The KPT has already taken over the control of the Container Terminal (Berths 6 to 9 at East Wharf) from Pakistan International Container Terminal (PICT) whose 21-year agreement expired on June 17 and has signed a short-term services contract with the same firm until June 30 to maintain operations without any extra management fee.

PICT’s share price in the Pakistan Stock Exchange plunged by a massive 31pc to about Rs91 per share amid lower locks from about Rs132 since the federal government empowered the KPT to take over the terminal on June 12.

The Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) met for the second time in a week and constituted an inter-ministerial committee “to negotiate the draft framework agreement between governments of the UAE and Pakistan to further strengthen the relations between the two countries in the maritime sector”, said an official statement after Finance Minister Ishaq Dar presided over the meeting.

The committee led by Secretary Law and Justice Raja Naeem Akbar would comprise the secretary Ministry of Maritime Affairs (MoMA) and senior representatives from ministries of finance, commerce and foreign affairs. The meeting was informed that the ADP has shown interest in operating the terminal.

A rather strange state of affairs was presented before the committee that showed KPT had been unprepared for the event that was known for 21 years to happen and was now unable to handle the situation.

The MoMA told the committee meeting that KPT after taking over the charge of the terminal last week had considered requests from three parties to operate the container terminal during the transition period with effect from June 18. They included PICT, Multimodal Transport International (MTI) and Premier Mercantile Services.

“KPT was of the view that they couldn’t operate the terminal due to lack of time and resources and interface with the clients/shipping lines and the timeframe for bidding had lapsed and the events have created an unforeseeable situation where the time limits laid down for open or other methods of procurement cannot be met”, the MoMA said and went on to report that “the (KPT) has, therefore, recommended that in the given circumstance only PICT is in a position to provide management services to keep the terminal operational”.

Published in Dawn, June 20th, 2023