Amid govt, navy war, China to get Pak port

China appears all set to take over the reins of Pakistan's strategic Gwadar port in Balochistan, with the Singapore Port Authority (SPA) and its partners intending to pull out of a 40-year management and development contract.

The SPA and its partners, the National Logistics Cell and AKD Group, have been allowed to quit the project after the government failed to transfer 584 acres at the mouth of the port that are currently in the possession of the Pakistan Navy.

'We have not been able to meet contractual obligations and resolve land issues. As a result [the SPA and its partners] have gone under duress and we issued them a no objection certificate yesterday to give up their contract,' the ports and shipping minister Babar Khan Ghauri told a meeting of the Senate's Standing Committee on Ports and Shipping. 'Now the Chinese will take over Gwadar Port,' Ghauri said.

He indicated that China will invest USD 10 billion to develop the port in Balochistan and manage its operations but did not give details. After its development by the Chinese government at a cost of USD 288 million, Pakistan's only deep-sea port was handed over to the SPA under a 40-year agreement in February 2007.

Ghauri said that while many people in Pakistan blamed international players for unrest in Balochistan and competing regional port operators for the lack of progress in the Gwadar port, it was 'shameful' that a friendly foreign operator had to leave the port because of the navy's 'changing positions' on vacating land despite a clear decision by the government.

He said the armed forces should not behave like 'real estate companies' and realise that the land belonged to Pakistan. The navy sought Rs 10 million per acre for land which it had purchased at Rs 180 and then demanded an alternative plot of 1,000 acres. It then increased the demand to 1,615 acres and finally to 2,200 acres, Ghauri said.

The Chinese had turned down a request to take part in the bidding for operations of Gwadar before the agreement was signed with the SPA but they were now interested in the project, he said.