Pakistan and China are set to sign an operational agreement for handing over control of Gwadar Port to the latter within a month, which may deal a big blow to the United States and India who fiercely oppose Chinese presence in the region.
Prime Minister Nawaz Sharif will take up this issue during his upcoming visit to Beijing and the two sides will sign a final agreement following negotiations on a profit-sharing formula.
Talking to The Express Tribune, Federal Ports and Shipping Minister Kamran Michael said a draft agreement was being finalised about the functions of Gwadar Port and the issue would come up for discussion with Chinese authorities during the premier’s trip starting from July 4.
“The previous government signed a memorandum of understanding with China in 2012, however, final agreement is yet to be reached,” he said.
The port will be the property of the government of Pakistan whereas China will be the operator on a profit-sharing basis.
Earlier, Pakistan had handed over control of Gwadar Port to Singapore Port Authority which later sold its rights to a Chinese company.
According to Michael, China will make investments to make the port functional and turn Pakistan into a regional trade hub. China will invest in construction of berths to handle cargo ships.
“We have to finalise terms and conditions and I along with my team will head to Beijing to negotiate the agreement,” he said, adding the port operator would be the shareholder in the port.
He also welcomed any investment from neighbouring countries including Iran and Russia in Gwadar Port. Road infrastructure for the port will also be constructed and it will be linked with China through a railway link.
Stressing that the PML-N government wants ‘trade not aid’, Michael expressed the hope that if the port started operating it would not only attract investment, but also enhance trade with neighbouring countries.
An official alleged that the previous government invested billions of rupees in dredging work at the port, but it turned out to be a mega scandal as investment was shown on papers only and even ships could not arrive at the port.
Recently, a Chinese ship also could not reach the port because of heavy silt in the sea. The official expects the new government to take action soon and expose the people involved in the alleged scandal.
Published in The Express Tribune, July 2nd, 2013.