Gwadar port to be taken over by Chinese company: Minister informs Senate body
The Port Singapore Authority (PSA) has decided to leave Gwadar Port due to non-handing over of allocated land required by the Authority for making the port fully operational, according to Federal Minister for Ports and Shipping Babar Khan Ghauri.
Copyright Business Recorder, 2012
"The denial of land at Gwadar Port forced PSA to leave the port, which will be taken over by a Chinese company," the Federal Minister informed the Senate Standing Committee on Ports and Shipping that met with Sardar Fateh Mohammad Hassani in the chair here on Tuesday.
It was agreed in the MoU signed with PSA that the government would provide the required land to make the Gwadar Port fully operational, which was in the possession of Pakistan Navy and Coastal Guard. However, that commitment did not materialise, which led PSA to leave the port, said Ghauri, adding that the government had issued an NoC to PSA in this regard, which was going to sell its shares to a Chinese company.
Hassani said that due to government's mistakes, PSA was going to leave the port and if corrective measures were not taken the Chinese company could also follow suit. The Committee recommended that GPA, Pakistan Navy, Coast Guard, Balochistan government and Planning Commission should resolve the land issue in three weeks and report to the committee. It further recommended that as an alternative, Pakistan Navy should take the available 300 acres of land from government of Balochistan and vacate 584 acres of land at Gwadar Port.
Pakistan Navy (PN) officials informed the committee that the PN was a legal and legitimate owner of 584 acres of land at Shamba Ismail Gwadar, which was allocated to PN against payment by the Government of Balochistan for Defence/operational purposes. However, PN land at Shamba Ismail was made part of Gwadar Port Development Plan without its consent. Hence, Ministry of Ports and Shipping had been pursuing the case for the transfer of PN land to GPA since long.
The Ministry also took up the case with Prime Minister in 2008, who after thorough scrutiny of records, finally approved the retention of land at Shamba Ismail by PN. However, only 30 acres of land for the rail/road link from Gwadar Port to Free Zone/Container Freight Terminal was to be spared by the PN. Therefore, the PN's possession of Shamba Ismail land has been well before Gwadar port project was launched, according to the PN.
In lieu of the land at Shamba Ismail, the government of Balochistan had offered two pieces of land at Pishukan and Shabi Tehsil to PN. Later in January 2012, the Prime Minister constituted a committee under the chairmanship of Chief Minister Balochistan to resolve the issue. Subsequently, a feasibility study of both pieces of land was carried out by the PN and land offered at North Bay of Pishukan was considered suitable for the PN. The PN also conveyed that the size of alternate land should be approximately 1000 acres instead of the offered 584 acres and that the PN would retain 84 acres of land at Shamba Ismail.
As a future course of action, M/o P & S is requested to undertake necessary action in line with PN stance on the issue. PN being the legal owner is in the possession of the land at Shamba Ismail since 1980 and this land is essentially required by the PN for Defence/operational purposes due to its strategic location. However, PN may consider handing over the land to GPA in the greater national interest provided suitable alternate land meeting all essential PN requirements was offered, PN officials told the committee.
Chairman Gwadar Port informed the committee that the government of Pakistan had decided in year 2002 to construct Port in Gwadar due to its naturally sheltered location from south - westerly monsoons. The main objectives for development of the port were trans-shipment, transit trade, Gwadar industrial development and Gwadar city growth.
Under a Financial arrangement with the Government of China, the port was constructed at an estimated cost of $287.8 million. The Chinese government made a $220.26 million contribution to the project. M/s Arthur D Little prepared a Master Plan of the Port and identified Strategic Zones and Land Bank requirements for the next 35-50 years.
He further said that in February 2007 through a concession agreement with PSA Gwadar Pte Limited, which is a subsidiary of PSAI, the management, operations, maintenance and development of Gwadar port were transferred to the concession holder for a period of 40 years under the 'Landlord' concept. GPA's share in Gross Income was calculated as follows: PSA Gwadar International Terminal Limited 9%; Gwadar Marine Service Limited 9% and Gwadar Free Zone Company Limited 15 %.
The chairman said that after taking the possession of Port as a concession holder, the PSA installed two Gantry cranes, 200 meter of single rails and one Sub-Station. In accordance with Schedule-5 of the Concession agreement, the PSA was bound to invest US $775 million for the development of port, which did not materialise, he added.
The construction of East Bay Expressway on East Bay of existing Gwadar City had been proposed to link the Gwadar Port with existing Makran Coastal Highway, he said and added that the Port, at present, was connected to Coastal Highway through existing city road due to which city population as well as Port cargo traffic faced huge problems. According to him, the existing city road is designed only for city traffic and it is unable to be used for heavy port traffic. During the Port Operations the road is totally congested with the traffic and there is high risk of accidents due to low capacity of the road for bearing the heavy port traffic. There are also observations of the city government as well as existing population of the city for the shifting of heavy port traffic to some other places. Due to prevailing law and order situation in the country as a whole and especially in Balochistan, the existing road is insecure for port traffic.
The 584 acres of land allotted to Pakistan Navy at Shamb-e-¬Ismail Gwadar is to be transferred to GPA. The Prime Minister has constituted a committee headed by the Chief Minister of Balochistan, which held a meeting under the chairmanship of Chief Minister Balochistan in March 2010 to resolve the issue. Pakistan Navy consented to vacate the 584 acres of land at Shamb-e-Ismail Gwadar, and requested for an alternate piece of land at Pishukan having an adequate sea frontage.
In this regard, the last meeting was held in April 16, 2012 at Gwadar chaired by the Commissioner Makran Division. Both parties agreed that 584 acre of land at East Bay Gwadar allotted to Pakistan Navy would be transferred to GPA and in lieu thereof around 1000 acres of land, both government and private, will be allotted to Pakistan Navy at Pishukan as identified by the concerned naval authorities. The revenue authorities the Gwadar have indicated the price of land to be around Rs 744 million, which would be required to be paid by GPA in this respect, the chairman informed the committee.