Pakistan is undergoing negotiations with the United Arab Emirates (UAE) to hand over operational management of the port terminals of the city of Karachi, as Islamabad continues to seek emergency funds to pay off its debt to the International Monetary Fund (IMF).
According to the Pakistani media outlets, the government yesterday constituted a committee to negotiate the finalisation of a deal to transfer control and operations of the Karachi Port terminals to the UAE, in a move which would be the first inter-governmental transaction under a law Pakistan enacted last year to raise emergency funds.
The meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions, chaired by Pakistan’s Finance Minister, Ishaq Dar, had decided to set up the negotiation committee for the purpose of reaching a commercial agreement between the Karachi Port Trust (KPT) and the Emirati government, reports stated.
Having operated the Karachi terminals from June 2002 for a period of 21 years, the Pakistan International Containers Terminals’ (PICT) term ended last Saturday, leaving the position vacant and providing the Pakistani government with an opportunity to potentially profit from handing over the ports to Abu Dhabi Ports (ADP) – part of AD Ports Group – which owns or operates 10 ports and terminals in the UAE.
The initial plan was for the KPT to run the Karachi terminals, but the cabinet committee was reportedly informed that the KPT lacks the sufficient capacity to do so. It was subsequently decided that PICT should resume operations of the terminals until 30 June, by which time the government is expected to have finalised the deal.
Pakistan’s coalition government enacted the Inter-governmental Commercial Transactions Act last year in an effort to provide it with wider avenues of acquiring emergency funds amid the ongoing and worsening economic crisis within the country.
Islamabad’s foreign reserves have particularly been dwindling in recent years, and its troubles have only deepened after its negotiations for a deal with the IMF have lapsed over the past week, leaving it more indebted to other foreign creditors, such as China.