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Ministry directs KPT to recover royalty of $50m from M/s Hutchison Port Holdings Ltd

Ministry directs KPT to recover royalty of $50m from M/s Hutchison Port Holdings Ltd

ISLAMABAD: Ministry of Maritime and Fisheries (Port & Shipping) directed Karachi Port Trust to recover royalty of $50 million from M/s Hutchison Port Holdings Limited.

According to the details, management of Karachi Port Trust awarded the contract of terminal operations of Pakistan Deep Water Container Port to M/s Hutchison Port Holdings Limited vide concession agreement but due to certain reservations, the company was reluctant to make advance payment of the lease rent as per the agreement.

In terms clause 8.2.4 of the agreement, the terminal operating contractor (TOC) would pay a fixed sum of $100 million as advance. The advance lease rent would be paid in four equal installments. 1st installment of $25 million will be within 30 days of the date of signing. Second installment of $25 million will be paid within 9 months after date of 1st installment.

Third installment of $25 million within 18 months after the date of the 1st installment, or within five days of the possession date of phase 1, whichever is earlier.

Fourth installment of $ 25 million will be paid within 27 months after the date of the 1st installment, or within 5 days of the possession date for phase 1C, whichever is earlier.

The ministry observed that 3rd and 4th installment of $50 million were not received so far from the firm. This is serious violation of the agreement which deprived the KPT of its share of receipts therefore outstanding dues should be recovered.