Pakistan is considering handing over terminals at the Port of Karachi to the United Arab Emirates, in what could be the first such transfer under legislation enacted last year to help the embattled government raise emergency funds.
The Pakistani Finance Ministry recently announced the creation of an interagency body tasked with negotiating the handover, following a series of meetings by a cabinet committee on intergovernmental deals, reports Nikkei Asia.
Further details remain unclear, including whether Pakistan is looking to transfer operational rights or sell the port to the UAE.
Located on the northern Arabian Sea and just east of the Gulf of Oman, the Karachi port is the largest in Pakistan, handling about 60% of the nation's cargo. The UAE is likely aiming to bolster logistics ties with Pakistan through the potential deal.
Shipments from a UAE port facing the Gulf of Oman to Karachi would be faster and more efficient than shipments passing through the Strait of Hormuz, Arab media reported an Emirati port executive as saying in May.
Pakistan's economy has been driven to the brink of collapse by inflation and extensive flooding. Facing potential default, the government recently received a $1 billion loan from China, which holds around 30% of Pakistan's foreign debt.
Pakistan has also begun importing cheap Russian crude oil for the first time.
The situation in Pakistan has been compared with that in Sri Lanka, where mounting debt forced the government to hand over operations of its Hambantota port to China on a 99-year-lease. Sri Lanka defaulted on its debt last year.
