Tag: Concession Agreement

  • Planning to travel on the motorway? You’ll be paying more for it now

    Planning to travel on the motorway? You’ll be paying more for it now

    The toll tariff for the Lahore-Islamabad Motorway (M2) underwent a 10 per cent increase, with the new rates becoming effective starting from Saturday, August 26th, 2023.

    The decision to revise the toll rates comes as the National Highways Authority (NHA) releases an official notification, citing the execution of a concession agreement with M/s Motorway Operations and Rehabilitation Engineering (Private) Limited, a subsidiary owned by the Frontier Works Organisation (FWO). 

    The agreement, which was formalised on April 23, 2014, pertains to the modernisation and overlay of the Lahore-Islamabad Motorway (M-2) under the Build-Operate-Transfer (BOT) framework. The agreement spans two decades.

    As per the terms stipulated in the concession agreement, an escalation of 10 per cent in toll rates is set to be implemented from the second operational year onward. Thus, from the 26th of August 2023 to the 25th of August 2024, the revised toll rates are set to take effect.

    According to the official notice provided by the NHA, the revised toll rates are outlined as follows:

    • Car/Jeep/Pickup: Rs1,100, equivalent to Rs3.07 per km
    • Van: Rs1,840, equivalent to Rs5.15 per km
    • Coaster: Rs2,590, equivalent to Rs7.22 per km
    • Coach: Rs3,690, equivalent to Rs10.29 per km
    • Truck: Rs4,800, equivalent to Rs13.39 per km
    • Trailer: Rs6,170, equivalent to Rs17.22 per km

    The decision to raise toll rates by 10 per cent reflects the ongoing economic trends in Pakistan, where a range of commodities and services have experienced notable price increments. 

    The revised toll rates are envisaged to contribute to the sustainability and enhancement of the Lahore-Islamabad Motorway infrastructure, supporting ongoing operational and maintenance efforts.

    As Pakistan grapples with economic dynamics, this adjustment in toll rates underscores the authorities’ focus on maintaining and improving critical transportation networks across the country.

  • UAE-based company to oversee operations and development of Karachi Gateway Terminal for 50 years

    UAE-based company to oversee operations and development of Karachi Gateway Terminal for 50 years

    The AD Ports Group, based in the United Arab Emirates (UAE), has entered into a 50-year concession agreement with the Karachi Port Trust (KPT) to manage and develop the Karachi Gateway Terminal Limited (KGTL).

    The group will invest $220 million in infrastructure development over the first 10 years of the agreement. This agreement is particularly significant as Pakistan seeks external financing to support its struggling economy.

    According to the terms of the agreement, a joint venture has been established between AD Ports Group and Kaheel Terminals, a UAE-based company, with AD Ports Group as the majority shareholder. The joint venture will oversee the management, operation, and development of the KGTL, specifically berths 6-9 at Karachi Port’s East Wharf.

    The infrastructure investment will focus on deepening berths, extending quay walls, and expanding the container storage area. These enhancements will enable the terminal to accommodate larger vessels and increase its annual container capacity from 750,000 to 1 million TEUs.

    Captain Mohamed Juma Al Shamisi, the Managing Director and Group CEO of AD Ports Group, expressed enthusiasm about the concession agreement, stating that it aligns with the group’s strategy of investing in strategic maritime trade routes. He believes that this agreement has the potential to bolster the economies of both the UAE and Pakistan, foster stronger relationships with key trading partners, and drive economic growth and prosperity.

    The terminal’s operations are denominated in US dollars, minimising exposure to fluctuations in the Pakistani rupee. The terminal has historically generated revenues of approximately $55 million and an annual EBIDTA of around $30 million.

    The UAE and Pakistan have a robust trade relationship, with the UAE serving as Pakistan’s leading regional trading partner in 2021. Bilateral trade between the two countries accounted for over 40 per cent of Pakistan’s trade with Arab nations. In 2022, non-oil exports from the UAE to Pakistan amounted to nearly AED 4.8 billion ($1.3 billion), while re-exports from the UAE to Pakistan reached AED 10.6 billion (US$2.9 billion), demonstrating a 7.7 per cent growth compared to 2021.

    According to Geo, the agreement between AD Ports Group and KPT has been hailed as a significant milestone by Syed Syedain Raza Zaidi, Chairman of Karachi Port Trust. Zaidi believes that this collaboration will pave the way for a thriving container terminal, driving efficiency, attracting investment, and stimulating economic development in Karachi.