KGTL plans up to $100m more for Karachi port expansion after Iran war cargo spike

KARACHI: Karachi Gateway Terminal Ltd (KGTL) plans to invest a further $75 million to $100 million over the next five years after a rise in cargo flows linked to disruption during the Iran war opened what the company sees as a chance for Pakistan to strengthen its position in regional shipping.

In an interview with Reuters, KGTL chief executive officer Khurram Aziz Khan said the company, which is backed by Abu Dhabi Ports Group, has already completed a $60 million dredging project at Karachi Port and is also expanding its container and bulk-handling facilities.

Speaking about the next phase of investment, Khan said it would centre on enlarging the container terminal, increasing yard capacity, adding bigger ship and yard cranes, and developing dedicated bulk export infrastructure, including silos, warehouses and automated conveying systems.

Khan also said KGTL is considering investment in rail freight, including locomotives, rolling stock and storage hubs near agricultural areas, with the aim of linking those regions to ports and helping Pakistan export commodities such as corn and rice more competitively.

He said the company was looking beyond port handling alone and wanted to support the wider logistics chain.

“We are targeting another $75 million to $100 million”

He added that KGTL was also prepared to enter freight rail operations.

“For transit as well, you need to provide a complete solution,” Khan said. “We are ready to invest in that as well, to bring our own rolling stock and locomotive for the freight trains business.”

Transshipment opportunity

According to Khan, maritime disruption caused by the US-Israel war on Iran redirected cargo through Karachi for onward shipment to other destinations, creating an opening for Pakistan to handle transshipment traffic that it had not previously managed in a meaningful way.

“Pakistan has never really handled transshipment volume,” he said. “This conflict has created this opportunity for Pakistan.”

He said the dredging work is expected to enable Karachi Port to handle bulk vessels of up to 120,000 metric tonnes, compared with about 60,000 tonnes previously, once the Karachi Port Trust issues revised handling parameters, which he said were expected within days.

Bulk terminal upgrade and logistics constraints

KGTL is also upgrading its bulk terminal to reduce the handling time for a 60,000-tonne vessel to around 2.5 to 3 days from the current 12 to 15 days, Khan said.

He said the company is building silos with annual capacity of 8.5 million tonnes for clean bulk cargo, which he said would help support national food security. The expansion plans also include bulk-export warehouses and systems for fertiliser imports.

At the same time, Khan said that maintaining the benefits of the recent cargo surge would depend on stronger road and rail connectivity to and from the port.