Why Pakistan is handing over Karachi port terminals to UAE? Cash-strapped Pakistan has formed a negotiation committee to finalize a deal with the UAE for the transfer of its Karachi port terminals as it seeks to raise an emergency fund amid uncertainty over the revival of a stalled IMF loan.
Finance Minister Ishaq Dar presided over a meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions on Monday.
According to The Express Tribune, the meeting decided to form a committee to negotiate a commercial agreement between the Karachi Port Trust (KPT) and the UAE government.
According to the meeting’s decision, the negotiation committee has also been authorized to finalize a draught operation, maintenance, investment, and development agreement under the government-to-government arrangements with a nominated agency of the UAE for the handover of the Karachi port terminals.
Why Pakistan is handing over Karachi port terminals to UAE?
Faisal Sabzwari, the Minister of Maritime Affairs, will chair the negotiation committee formed to finalize a framework agreement.
Members of the committee include the additional secretaries of Finance and Foreign Affairs, the special assistant to Prime Minister Jehanzeb Khan, the Chairman of the Karachi Port Terminal (KPT), and the KPT’s general managers.
Last year, the UAE government expressed interest in acquiring the Karachi port terminals that were administered by the Pakistan International Containers Terminals (PICT). The formation of the negotiation committee could result in the first intergovernmental transaction under a law passed last year to raise emergency funds.
Last year, Pakistan’s coalition government passed the Intergovernmental Commercial Transactions Act, which aims to sell state assets quickly in order to raise funds. The country is in desperate need of additional funds, as the USD 6.5 billion deal with the International Monetary Fund (IMF) that was signed in 2019 is set to expire at the end of this month.
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According to sources, the government must exercise extreme caution when finalizing a deal with the UAE because it will be the first transaction of its kind, and the outgoing operator is also posing some challenges, according to the report. Meanwhile, Prime Minister Shehbaz Sharif met with key country ambassadors to rally support for the resumption of the stalled IMF deal.
The government is making a last-ditch effort to recover the unpaid portion of the $6.5 billion packages, which were signed in 2019 and are set to expire on June 30. According to the Express Tribune, the government invited the ambassadors of the United States, the United Kingdom, France, Germany, the European Union, Japan, China, Saudi Arabia, Qatar, and the United Arab Emirates on Monday.
According to a meeting participant who requested anonymity, the prime minister informed the foreign ambassadors about the efforts made by Finance Minister Dar and him personally over the past several months.
According to the sources, the prime minister reiterated that the government was eager to receive at least the $1.2 billion IMF loan tranche out of the remaining USD 2.6 billion contingents on the completion of the program’s pending 9th review.
