ISLAMABAD, July 30: Pakistan and the United States will sign on Tuesday the bilateral memorandum of understanding (MoU) on transit of cargo.

US Chargé d’Affaires Ambassador Richard Hoagland and Additional Secretary of the Ministry of Defence Rear Admiral Farrokh Ahmed will sign the agreement on behalf of their governments.

Once initialled, the MoU would replace the existing arrangement for Nato supplies, which was reportedly based on a ‘verbal understanding’.

Nato supplies were resumed on July 3 as per the previous arrangement after a seven-month suspension in the aftermath of Nov 26 Salala border attack in which 24 Pakistani troops were killed.

The new agreement that runs through 2015 can be subsequently renewed.

The accord has provision for other Nato/Isaf countries to accede to the arrangement that would be defence-led. A concept of Central Coordination Authority, which would oversee the implementation of the pact, has been introduced.

The federal cabinet had last week approved the draft of the memorandum.

US Embassy spokesman Mark Stroh told Dawn that the US had been given the understanding that the MoU was in line with the parliamentary recommendations approved in April on new terms of engagement with the US/Nato.

He said the agreement was only about transportation of supplies with no preconditions.

Accordingly, the MoU that would govern the transit of US military supplies through Pakistani territory has provisions barring transportation of lethal equipment and inspection of the cargo.

However, shipment of weapons and ammunition consigned for the Afghan National Army has been allowed. Two routes, via Chaman and via Torkham, have been designated for transporting supplies in containers.

During the course of negotiations, Pakistan tried to introduce provisions for demurrages and charges for special services, but had to drop them because of US reluctance to pay any fee.

The US will now only be paying to its contractors, while the facility will be completely free of any charge on the part of Pakistan.

The arrangement has a mechanism for dispute resolution. All issues, it says, will be resolved through bilateral discussions without any third-party involvement.

Defence officials from both countries will regularly meet to discuss operational matters.