Karachi May 10 2023: Pakistan International Container Terminal (PICT) contract will expire next month for operating berths at KPT, according to company documents.
The existing Concession Agreement with KPT in respect of built, operate and transfer on existing berths 6 to 9 is for a period of twenty-one years commencing June 18, 2002. Under the terms of the agreement, in the event KPT does not intend to operate the terminal itself after the expiry date, it shall give the Company the first right of refusal to match the financial and other terms and conditions of the most successful bidder.
PICT is a subsidiary of ICTSI Mauritius Limited whereas its ultimate parent company is International Container Terminal Services Inc., a company incorporated in Philippines.
In April 2023, KPT published a notice that it is required to commence the bidding process and during the intervening period, KPT intends to operate the terminal on arrangements to be decided by the Board of KPT. The Company is currently in negotiations with KPT for finalizing the terms and conditions for operating during the intervening period.
Since the past several years, PICT has raised the matter for early extension in Concession term and expansion of infrastructure, with KPT and other relevant quarters of the Government of Pakistan based on the precedent existing whereby KPT had provided early extension in the Concession term and expansion in the infrastructure to another Container Terminal.
Further, to safeguard the PICT interest against KPT's inequitable actions, the Company instituted a legal suit before the Honorable High Court of Sindh (HCS). The HCS vide its order in December 2021, provided an interim injunction / stay order for status quo whereby KPT was restrained from terminating the Concession Agreement or inviting bids for award of contract for relevant terminal operation.
In March 2023, HCS dismissed the interim order with the observations that the Company has a right to exercise their right of first refusal to match the bid of a successful bidder, if so declared by KPT. Moreover, KPT may exercise their right to reject any bid before offering right of refusal to the Company if deemed fit and proper, subject to law. HCS also observed that the Company has no justification to continue occupying the terminal beyond 17 June 2023 and in case right of first refusal is exercised by the Company, it would be re-occupation and re-commencement of such fresh terms as agreed. The Company has filed an appeal before larger bench of HCS for setting-aside the order and restrain KPT from interfering in operations which is pending for hearing.
PICT has an approved future operational plan in place keeping in consideration any action by KPT as discussed above. Accordingly, the Company intends to and has sufficient resources as well as commitment of financial support from the ultimate parent entity, to continue functioning as a legal entity for the foreseeable future. This continuity is also required to pursue the legal rights available to the Company in terms of the Concession Agreement which provides the Company with the first right of refusal as more fully explained above.