ISLAMABAD: Foreign Direct Investment (FDI) to the tune of $ 1.22 billion is expected over a period of five years through development projects at the Port Qasim Authority (PQA).
“Currently, all development projects at the port are being undertaken in private sector on Build–operate–transfer (BOT) basis without costing a penny to PQA” a well placed source at Ministry of Ports and Shipping told Customs Today here on Thursday.
The terminology BOT is a form of project financing, wherein a private entity receives a concession from the private or public sector to finance, design, construct, and operate a facility stated in the concession contract. This enables the project proponent to recover its investment, operating and maintenance expenses in the project.
Due to the long-term nature of the arrangement, the fees are usually raised during the concession period. The rate of increase is often tied to a combination of internal and external variables, allowing the proponent to reach a satisfactory internal rate of return for its investment. Traditionally, such projects provide for the infrastructure to be transferred to the government at the end of the concession period.
PQA has already completed a number of development projects on BOT basis including 2nd container terminal which became functional in 2011 while the implementation agreement was signed in 2006 with QICT for establishment of 2nd container terminal on BOT basis, having capacity of 14 million tons per annum at an estimated cost of US $ 211 million. The terminal is designed to accommodate 6,000 TEUs container vessels.
Similarly, former Prime Minister inaugurated in October 2010 a specialized Grain & Fertilizer Terminal developed by Fauji Akbar Portia at a cost of US$ 135 million with handling capacity of over 4 million tons per annum.. This terminal was created by reclaiming 22 acres of water and has a 300 meter long jetty.
Moreover, Liquid Cargo Terminal (LCT) was inaugurated in August 2009, this terminal with design capacity of 4 million tons per annum has been developed in private sector on BOT basis at a cost of US$ 15 million to cater for edible oil imports. To meet the energy demands, an LNG Floating Terminal is being developed by GasPort at a cost of US$ 160 million with handling capacity of 3 million tons per annum.
A dedicated Coal, Clinker & Cement Terminal is being undertaken at a cost of US$ 180 million with handling capacity of 8 million tons per annum with a storage capacity of 0.9 million tons. An Implementation Agreement has been signed in November 2010 with PIBT (Pakistan International Bulk Terminal).
Another LNG Terminal is planned to be developed by Granada group of Companies at a cost of US$ 274 million with handling capacity of 3.5 million tons per annum. Technical & Financial proposals are currently being evaluated. To handle increased volume of POL imports, a second Oil Terminal is planned to be developed at a cost of US$ 51.4 million with handling capacity of 9 million tons per annum. Technical & Financial proposals are currently being evaluated.
With the objectives to handle increased volume of Pakistan Steel Mills and to accommodate Al-Twarqui Steel Mills imports, a second Iron Ore & Coal berth is planned to be developed at a cost of US$ 150 million with handling capacity of 8 million tons per annum. Outsourcing of the terminal is under active consideration. The development of the Terminal will be linked with Pastel Expansion program.
Engro Vopak Liquid Chemical Terminal has been developed to cater for liquid chemical imports by Engro Chemical Pakistan in collaboration with Vopak of Netherlands, on BOT basis, at a cost US$ 76 million. Operational since January 1998, the terminal can accommodate 75000 DWT class vessels with designed capacity of 4 million tons per annum.
PQA is equally concerned for provision of infrastructure facilities in its industrial zones to gear up development of port based industrial and commercial activities, to facilitate the traffic flow PQA plans construction of 26 KM long Dual Carriageway from National Highway T-junction passing through PQA commercial areas (Western Industrial Zone and Eastern Industrial Zone), ending at Sassui Bridge Ghaghar Railway Crossing inclusion up-gradation of Main Access Road and construction of two flyover on BOT basis at the estimated cost of Rs. 6.00 billion.
PQA has also awarded contract for development of Infrastructure facilities i.e. Roads, Water Supply, Sewerage and Drainage in Eastern Industrial Zone to FWO and NLC at the cost of Rs. 8.88 billion and work in progress.
