Pakistan govt likely to hand over Karachi port terminals to UAE to raise emergency funds: Report

Cash-strapped Pakistan has constituted a negotiation committee to finalise a deal with the UAE for handing over its Karachi port terminals as it seeks to raise an emergency fund amid uncertainty over the revival of a stalled loan from the IMF, according to a media report on Tuesday. Finance Minister Ishaq Dar on Monday chaired the meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions.

The meeting decided to set up a committee to negotiate a commercial agreement between the Karachi Port Trust (KPT) and the UAE government, The Express Tribune newspaper reported.

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It quoted the decision of the meeting that the negotiation committee has also been permitted to finalise a draft operation, maintenance, investment, and development agreement under the government-to-government arrangements with a nominated agency of the UAE for handing over the Karachi port terminals. The negotiation committee set up to finalise a framework agreement will be headed by the Minister for Maritime Affairs, Faisal Sabzwari.

The committee members include the additional secretaries of Finance and Foreign Affairs, the special assistant to PM Jehanzeb Khan, the Chairman of the Karachi Port Terminal (KPT), and the general managers of the KPT. The UAE government had shown interest in acquiring the Karachi port terminals that were under the administrative control of the Pakistan International Containers Terminals (PICT) last year.

This move to constitute the negotiation committee may lead to the first intergovernmental transaction under a law enacted last year to raise emergency funds. Last year, Pakistan's coalition government enacted the Intergovernmental Commercial Transactions Act, aimed at selling state assets on a fast-track basis to raise funds.

The country is in dire need of additional money amid uncertainty over the revival of the $6.5 billion deal with the International Monetary Fund (IMF) which was initially signed in 2019 and is set to expire by the end of this month. Sources indicate that the government needs to be extra careful when finalising a deal with the UAE, as it will be the first transaction of its kind, and the outgoing operator is also posing some challenges, the report said.

Meanwhile, Prime Minister Shehbaz Sharif held a meeting with the ambassadors of key countries to get support for the revival of the stalled IMF deal. The government is making a last-ditch effort to get the unpaid portion of the $6.5 billion packages, which was signed in 2019 and would terminate on June 30.

The Express Tribune newspaper reported that the government on Monday 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. The prime minister apprised the foreign ambassadors about the efforts that Finance Minister Dar and he personally made during the past many months, a participant of the meeting told on condition of anonymity.

The prime minister again stressed that the government was keen to get at least the $1.2 billion IMF loan tranche out of the remaining $2.6 billion, which is attached with the completion of the pending 9th review of the program, said the sources. Some ambassadors sought clarifications from the government but assured that they would communicate Pakistan’s position to their capitals, according to another participant of the meeting.

The ambassadors are also in touch with the IMF staff, reported the paper. The government has not issued any official statement after the meeting.