Pakistan to hand over Karachi Port to UAE over low reserves

Islamabad : Pakistan established a Cabinet Committee on Inter-Governmental Commercial Transactions to negotiate the commercial agreement of handing over its Karachi Port Terminals (KPT) to the United Arab Emirates (UAE), as the country struggles With record inflation, fiscal imbalances and low reserves, Afghanistan-based Khaama Press reported.

It is the first inter-governmental transaction permitted by a law passed last year to raise emergency funds. Finance Minister Ishaq Dar chaired the meeting on Monday and decided that a committee would be required to negotiate a commercial agreement between the Karachi Port Trust (KPT) and the government of the United Arab Emirates, The Express Tribune reported.

The negotiation committee has also been permitted to complete a draft operation, maintenance, investment, and development agreement under the government-to-government agreements with an organisation designated by the UAE to transfer the Karachi port terminals, Khaama Press reported.

Since the agreement with the International Monetary Fund (IMF) has expired with Pakistan, the country is in dire need of extra funding, per Khaama Press.

Initially, the UAE resisted giving Pakistan credit and had also pressurized it to sell shares. Moreover, it later pledged USD 1 billion, which has yet to be disbursed, according to The Express Tribune.

By the end of this month, the agreement is expected to be completed.

While Pakistan is in need of major foreign inflows but these small transactions may not resolve the issue. Pakistan will have the right to take over the terminals in case of a national emergency or under supreme security conditions, as per Express Tribune.