KARACHI: A planned $3 billion foreign investment to expand container handling facilities at Karachi’s ports has become stalled by regulatory and contractual hurdles, officials of the company involved with the project said on Thursday, potentially delaying efforts to boost Pakistan’s ambitions of becoming a regional trade and transshipment hub.
The investment, proposed by Hong Kong-based Hutchison Ports, aims to expand operations at the South Asia Pakistan Terminal (SAPT) and Karachi International Container Terminal (KICT) and develop new logistics facilities as Islamabad seeks to position Pakistan as a regional transit and transshipment hub connecting South Asia, Central Asia and the Middle East.
The project gained momentum after Hutchison Ports Chief Executive Officer Eric Ip met Prime Minister Shehbaz Sharif in May 2025, after which the company increased its proposed investment from $1 billion to $3 billion.
But progress has slowed amid disagreements over whether a concession agreement governing Karachi Gateway Container Terminal (KGTL), operated by UAE-based AD Ports Group, and public procurement regulations allow the expansion to proceed.
“They tell us that Pakistan’s government has signed a concession with KGTL which provides that no new terminal can be built until we reach four million containers handling level,” a Hutchison Ports official involved in the discussions told Arab News on condition of anonymity, referring to discussions with government authorities.
Another obstacle relates to regulations administered by the Public Procurement Regulatory Authority (PPRA).
“When we talk to the ministry of maritime, on secretary level, they say PPRA rules will apply which require them to float a tender for the project to materialize,” the company official said.
Maritime affairs ministry spokesperson Muhammad Arshad and Karachi Gateway Container Terminal (KGTL) Chief Executive Officer Khurram Aziz Khan did not respond to requests for comment.
Under Hutchison Ports’ proposal, around $1.8 billion would be invested over the next five to seven years, with the remainder allocated to refurbishment and expansion over the longer term.
The plan includes a logistics park near SAPT featuring warehousing, container freight station operations, Ro-Ro handling, distribution centers and bonded areas, while berthing and yard capacity at both SAPT and KICT would also be expanded.
According to the proposal, SAPT’s berthing facilities would be extended by about 900 meters, while KICT would expand into currently unused KPT land at West Wharf, increasing both berthing length and backup yard capacity.
Another Hutchison Ports official said the additional capacity would be needed if Pakistan is to capitalize on future regional trade opportunities.
Major container terminals in Karachi and Port Qasim, including SAPT, KICT, KGTL and Qasim International Container Terminal (QICT), were already operating at up to 80 percent capacity, he said.
Another Hutchison Ports official said the company expected demand for port services to increase if Afghan transit trade resumed, Central Asian trade expanded and commercial links with Iran recovered.
“To capture all these things, we need to create additional capacity in the country,” he said. “For additional capacity, we pitched that we want to expand SAPT and KICT, both.”
The government has sought to attract greater foreign investment into the maritime sector and recently announced measures aimed at reducing costs at Pakistani ports, including tax reductions on terminal and port services and a freeze on a proposed increase in Karachi Port tariffs.
