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KARACHI: Pakistan International Container Terminal Ltd (PICT) said on Monday it has found no “immediate financial viable business opportunity” in a review exercise it held recently to look for possible business avenues.
One of the four container-terminal operators in Pakistan until recently, PICT lost its principal line of business when its 21-year concession agreement with the Karachi Port Trust (KPT) expired on June 17. The company operated a container terminal on berths six to nine, which were taken over by the port authority on June 18. “Resultantly, the fundamentals of future business operations have ceased with the expiry of the concession agreement,” the company told investors.
The original concession agreement with the KPT requires that PICT must keep its legal existence for a minimum of three years following the expiry of the contract. However, the company is allowed to “scan the market” on a regular basis for any financially attractive business opportunities compatible with related provisions in its constitutional document.
For the time being, PICT is involved in a complex handover procedure with KPT, including the smooth transition to the new concession holder. “Works are being performed on a cost compensatory basis,” it said, adding that the firm is making efforts to secure future employment opportunities for its employees.
In an interview with Dawn in March, PICT CEO Khurram Aziz Khan, who resigned on Monday, said the company expected to bring in “more than $100 million” in fresh foreign direct investment “within a short span of time” in case KPT removed the “procedural glitches” hindering the extension of its concession agreement.
He also highlighted that the country’s only listed entity handling containerised cargo brought in a net FDI of $20m in 2022.
PICT went to court in December 2021 to stop KPT from terminating the concession agreement or inviting bids for the award of a new contract. Its reason for going to court was based on the global practice in which port authorities either renegotiate commercial terms with a terminal operator towards the end of its concession period or go for fresh bidding altogether. In the latter case, the existing operator reserves the first right of refusal, which means it’ll be asked to match the best bid to retain the mandate for terminal operations.