KARACHI (May 18 2003) : A loan agreement between International Finance Corporation (IFC) and Pakistan International Container Terminal Limited (PICT) was signed at a local hotel on Saturday afternoon.
Dr Abdul Hafeez Sheikh, Federal Minister for Privatisation, who was the chief of honour, in his brief remarks, said that there was good lesson in this project, which needed to be highlighted.
He said that infrastructure development is needed to attract foreign investment in Pakistan.
He praised the efforts of PICT in undertaking this project and assured it that other such projects, if launched by the company in future, would not face any problem in getting government support.
He also praised the PICT's efforts to secure IFC financing for investment in the ports, and called this a landmark occasion and a trend-setter for the private sector shipping industry to follow.
Haleem Siddiqui, PICT's Chairman, earlier regretted that over a decade was lost in getting the present project through due to problems created by government functionaries in undertaking it.
Under the agreement, IFC, the private sector arm of the World Bank Group, will provide a senior loan of $ 7.75 million and a subordinated loan of $ 1.5 million to the PICT for development and operation of a container terminal at Karachi Port under a 21-year concession agreement granted by Karachi Port Trust.
Besides this, Opec fund is also expected to provide a parallel senior loan of $ 7 million.
Premier Mercantile Services (Pvt) Ltd, a long time Pakistani container operator firm at Karachi port, is the project sponsor. Hamburg Port Consulting is expected to provide technical services.
Haleem Siddiqui in his address said that PICT would be the first infrastructure project financed by IFC in Pakistan.
“I am delighted that through PICT, IFC has pioneered Opec Fund to private sector in the country.
In addition, it also makes me very proud that through AKD Securities support, PICT would be the first port infrastructure project in the history of the country to be listed on Karachi Stock Exchange.”
This project will improve container-handling efficiency at Karachi port and would benefit shipping lines, exporters and importers through low transport costs and high service levels.
“IFC's investment will encourage trade and contribute to the overall economic growth in Pakistan,” said Francisco Tourteilles, Director of IFC's Infrastructure Department.
“IFC's support is essential to catalyse interests of other investors. This is especially critical, given the current uncertainties faced by the region,” noted Sami Daddad, Regional Director of IFC.
Investing in port projects has been a key part of IFC's strategy in promoting private sector participation in the infrastructure sector.
Over the past 10 years, IFC has invested almost $ 300 million in 22 ports across 13 countries.