China takes over Gwadar port from Singapore

Pakistan and China have signed an agreement to hand Gwadar Port over to a Chinese company. Under the agreement, the Chinese company will be fully responsible for Gwadar Port in Balochistan from now onwards. The deep sea port shall remain the property of Pakistan while the Chinese company will share profits to be earned by making it operational.
The signing ceremony was held in the Presidency on Monday, which was witnessed by President Asif Ali Zardari, Chinese Ambassador in Pakistan Liu Jian, Foreign Minister Hina Rabbani Khar, some federal ministers, members of parliament and senior government officials.
Pakistan formally awarded the contract for the operation of Gwadar port and the building of infrastructure around it to China. On this occasion, President Asif Ali Zardari said, "The Chinese provinces of Xinjiang (SHIN-KI-YANG) and Tibet are closer to Pakistani ports than to the ports in China. The development of a trade corridor linking Xinjiang (SHIN-KI-YANG) to the Middle East via Gwadar Port holds great promise. It will be of great benefit to both Pakistan and China. It will also benefit countries of Central Asia and Afghanistan. Gwadar Port will enhance trade and commerce not only between Pakistan and China but also in the region."
According to the Presidential Spokesman, Senator Farhatullah Babar, nearly 60 percent of China''s crude oil is imported from the Gulf countries which would increase in the next decade. Because of the proximity of the Gulf countries to Gwadar the oil flow from the Gulf to China would be greatly facilitated by the operation of this port. Babar said that the ceremony held on Monday actually marked the transfer of Concession Agreement from the Port of Singapore Authority to the China Overseas Port Holding Company and was hailed by the President as an auspicious development in Pak-China relations as well as for the people of Pakistan particularly Balochistan opening for them "new opportunities." Gwadar will soon be a "hub of trade and commerce in the region", the President remarked adding, "it holds the key to bring together the countries of Central Asia" and lending "new impetus to Pakistan China relations."
The President also highlighted the strategic significance of the port for China and central Asian republics and its potential of integrating the economies of the countries in the region. The Federal Minister for Ports and Shipping Babar Khan Ghouri could not attend the ceremony. The President however lauded Ghouri''s efforts in facilitating the transfer of port operations to China.
Agencies add: China took control Monday of a strategic Pakistani port on the Arabian Sea, as part of a drive to secure energy and maritime routes that also gives it a potential naval base, sparking Indian concern. The Pakistani cabinet approved the transfer of Gwadar, currently a commercial failure cut off from the national road network, from Singapore''s PSA International to the state-owned China company on January 30. It had not been clear when the actual handover would take place, but President Asif Ali Zardari presided over the signing of a memorandum of understanding on Monday that was broadcast live by local television.
The Pakistanis pitched the deal as offering an energy and trade corridor that would connect China to the Arabian Sea and Strait of Hormuz, a gateway for a third of the world''s traded oil, overland through an expanded Karakoram Highway. Experts say it would cut thousands of kilometres off the distance which oil and gas imports from Africa and the Middle East have to travel to reach China. "Gwadar port will enhance trade and commerce not only between Pakistan and China but also in the region," said Zardari.
China paid about 75 percent of the initial $250 million used to build the port but in 2007 PSA International won a 40-year operating lease. Then-ruler Pervez Musharraf was reportedly unwilling to upset Washington by giving control of the port to the Chinese. On February 6 Indian Defence Minister A. K. Antony said New Delhi was concerned by Pakistan''s decision to transfer management of the deep-sea port to China, which has interests in a string of other ports encircling India.
Pakistan foreign ministry spokesman Moazzam Ahmad Khan dismissed those concerns last week, telling reporters: "This is not something that any other country should have any reason to be concerned about." Zardari said the building of infrastructure around the port will also promote economic activity in Gwadar and Balochistan. But some analysts warn that it may be some time before Pakistan can benefit from China''s take-over of Gwadar, stressing that the connecting roads and an expanded Karakoram Highway still need to be finished. They also suggest that security concerns have made China more cautious about big investment projects in Pakistan.