Mr. Ishaq Dar, our finance minister, whenever asked about the stalemate with the IMF and the country’s economic difficulties, he used to reply, “we have a lot of assets”. At the time, no one understood what he meant until one fine morning; we learned that a significant part of Karachi port, which is a major trade gateway, facilitating economic growth, providing employment, and ensuring regional connectivity for Pakistan, had been sold to Dubai Group without a second thought. I am certain that the government must have conducted a more in-depth investigation, held a public hearing, and provided an answer to the question of why a profit-making entity that was not only crucial to our economic well-being but also to the security and sovereignty of the country was sold off so quickly when there are many State-owned enterprises that are incurring losses or are idle and a burden on government coffers and were ready to be sold.
Many Pakistanis, who are sensitive to the gravity of this apparently hasty decision, were astonished by the abrupt agreement to sell berth 6 to 9 of Karachi Port which are important because they are the dedicated container terminals of the Pakistan International Container Terminal (PICT) which handles 60% of the country’s containerized cargo. The berths are equipped with modern cargo handling equipment, including gantry cranes, reachstackers, and forklifts. They are also able to accommodate large container ships, with a maximum draft of 13 meters. In addition they provide jobs to thousands of people, contribute to the economic development of the country and help to connect Pakistan with the global economy. They generate substantial revenue through customs duties, port fees, and other charges that contribute to national development, infrastructure projects, and public welfare initiatives. They are the key component of the China-Pakistan Economic Corridor (CPEC), a flagship project of the Belt and Road Initiative (BRI), and a primary entry point for Chinese goods destined for Pakistan and Central Asia, further enhancing its significance in regional trade.
I am certain that the Special Investment Facilitation Council (SIFC) had calculated the specific implications of such a sale, must have approved mutually agreed upon terms and conditions, and evaluated the intentions and strategies of the acquiring party. It must also have evaluated the potential political repercussions of such a decision, taken into account the long-term strategic and economic implications of selling national assets and must have established a mechanism to mitigate the risks and maximize the benefits for the nation.
The agreement has both positive and negative aspects. It is likely that the transaction will bring substantial capital and expertise to modernize and expand the port’s facilities, thereby improving its efficiency and capacity.
Dubai is also known for its advanced technology and innovation, and they may introduce cutting-edge technologies and systems to enhance port operations, such as automated processes, smart logistics, and digital connectivity. The influx of investment and improved infrastructure could potentially stimulate economic growth in the region, upgrade port facilities to entice more international trade, enhance cargo handling capabilities, and generate employment opportunities. The strategic location of Dubai as a significant trading hub could bolster Karachi Port’s position in global supply chains. Existing trade connections and networks in Dubai could facilitate increased trade volumes and improved connectivity with other locations and markets. A few countries have sold their main port operation to a foreign country due to financial difficulties, a desire to attract foreign investment, or a strategic decision to partner with a major trading nation. China’s COSCO Shipping acquired a 67% stake in Greece’s main port, the Port of Piraeus, in 2008. Sri Lanka leased China Merchants Port Holdings the Hambantota Port for 99 years in 2017. Pakistan licensed the Gwadar Port to China Overseas Ports Holding Company for a period of forty years in 2015. In 2018, Djibouti leased the Doraleh Container Terminal for 50 years to DP World of the United Arab Emirates. China Merchants Group purchased a 51% stake in the Port of Bar from Montenegro in 2017.
However, there are also negative aspects. There are underlying concerns that these deals could give foreign countries too much control over critical infrastructure and could lead to job losses and economic dependence and may compromise the sovereignty and jeopardize the country’s decision-making authority over the port’s operations and policies. Dubai would consolidate its influence in the region and potentially establish a dominant market position, which could lead to monopolistic practices, price control, and limited competition, which could have repercussions for the interests of other stakeholders. In the course of modernizing and optimizing the port, there may be a reorganization of operations and personnel, which may result in job cuts or altered employment conditions. During the transition, labor unions and employees may be concerned about their rights, employment security, and fair treatment. Controlling and monitoring imports and exports is essential for a nation’s security, as are port operations. Transferring ownership to a foreign entity may raise concerns regarding the potential impact on national security and the capacity to protect sensitive or strategic information. If the new owner prioritizes profit over social considerations, the local community could be negatively affected and If it does not adhere to stringent regulatory standards, for instance, job losses, changes in labor conditions, and environmental problems may occur. It could have geopolitical ramifications, modifying regional dynamics or impacting relations with neighboring nations.
The only reason for the lightning-fast mechanism was because all stakeholders, including all component parties of the PDM and establishment were on the same page. Chaired by Finance Minister Ishaq Dar, the cabinet committee meeting began on Wednesday evening and continued until Thursday morning to finalise the commercial agreement, subsequently, the KPT and ADP signed a concession agreement for the operations, maintenance, investment, and development of berths 6 to 9 on the East Wharf of the Karachi Port. It was the first intergovernmental transaction authorized by a law passed the previous year to raise emergency funds without disclosing the full terms of the agreement. Interestingly, the agreement signed under this law cannot be challenged in court of the country. The Pakistani government approved the agreement without consulting the public, with an initial investment of $220 million. Many peoples are rightly astound by the fact that Mr. Ishaq Dar’s personal net worth is increasing exponentially while the country’s assets are diminishing at the same rate. His asset, which was worth $ 307,200,000 in 2019 doubled to $ 600,000,000,000,000 in 2023, indicating that he employs a distinct financial and economic model for his asset and the country’s assets.
According to credible reports, the transaction was structured as a 40-year lease (according to some other reports 50-year ) with an option to purchase at the end of the term. The lease agreement contained a number of provisions that granted Dubai extensive control over the port. These clauses included the authority to appoint the port’s management, determine the port’s fees, and veto any alterations to the port’s operations. According to reports, the deal was worth $3.5 billion, but the precise terms of payment were not disclosed. Critics argued that the agreement gave Dubai too much control over the port and was not in Pakistan’s best interests. However, the government defended the agreement, arguing that it would bring much-needed investment to the port and contribute to the economic growth of the country.
Interestingly, this transaction cannot be called in question or challenged in any court of law under the Inter-Governmental Commercial Transactions Act, 2022. This is an overriding Act which has authorized the government to negotiate, and supervise signing of agreements between the government of Pakistan and the government of a foreign state aimed at promoting , attracting, and encouraging foreign states to have economic and business relations with Pakistan. According to the Act, no court shall entertain an application, petition or suit against any process or act undertaken or done, intended or purported to be undertaken or done under this Act. No court shall grant an injunction or entertain any application for an injunction against any process undertaken, intended or purported to be undertaken for a commercial transaction or agreement under this Act. It says that no suit, prosecutions or any other legal proceedings or action in damages shall lie for anything done, procedural lapses or omission in exercise or performance of any functions, power or duty conferred or imposed by or under this Act or any administered legislation unless the act or omission is shown, beyond reasonable doubt to have been in bad faith.
The agreement signed under this act is also out of the ambit of National Accountability Act as it bars any investigating agency, anti-graft agency, law enforcement agency or a court to inquire into or initiate investigation for any procedural lapse or irregularity by any person in a commercial transaction or agreement under this Act. The law also provides total immunity to all characters who were in any manner or conduct involved in processing or signing of the agreement. The relevant section says “No person shall be sued in his personal capacity for action taken in his official capacity. Any procedural irregularity or lapse shall not affect, vitiate, set-aside, annul or rescind a commercial transaction or a commercial agreement under this Act,”
This crucial transaction is now complete, regardless of whether it was completed hastily or after careful consideration. Whether it was awarded to the Dubai group through an international auction or without one. Nothing can be undone by any court of law or anti-corruption agency. In addition, this transaction has the approval of the establishment, so it is a complete and definitive transaction. Therefore, the government, its subordinate institutions, other pillars of the state, and the entire nation should work together to ensure its success. In the meantime, we should put our house in order and develop the capability, competence, and the will to operate the remaining assets with maximum efficiency and productivity in order to improve our financial and economic prognosis and preserve the assets we still possess.
