Pakistan on Monday disapproved the United Arab Emirates (UAE) offer for the development of two Karachi seaports terminals, finding the current value of the future stream of payments over the next 25 years too low to be accepted.
According to the finance ministry, the Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) reviewed the UAE’s offer for the development of clean and bulk cargo terminals on the East Wharf of the Karachi Port.
The net present value of the UAE’s offer for 25 years was around $1.2 billion, which was below the government’s expectations, according to a negotiation committee member. He added that the committee directed the maritime affairs ministry to reengage the UAE authorities and ask them to increase the price.
The CCoIGCT considered and reviewed the progress of the negotiation committee, which held its negotiations on the four and 5th of August 2023, on the commercial agreement between Karachi Port Trust (KPT) and the Abu Dhabi (AD) Ports, UAE, for the development of Bulk and General Cargo Terminal at East Wharf, Karachi, according to the Finance Ministry.
The CCoIGCT “directed the negotiation committee to reengage with the AD Ports to improve the terms” offered by it”, the ministry added.
The officials stated that the UAE had initially offered terms with a net present value of just over $800 million. Subsequently, they added, the UAE authorities increased their offer by another $350 million. These payments will be made over 25 years. They said that the current value of the request is hardly $50 million per annum.