Too little too late?: Gwadar port transfer to China wins cabinet nod

Published: January 31, 2013
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“The Chinese will make more investment to make the project operational,” says Kaira.

“The Chinese will make more investment to make the project operational,” says Kaira.

ISLAMABAD: 

The federal cabinet used one of its final meetings to make some key decisions with potentially far-reaching implications for Islamabad’s ties with Washington.

During the cabinet meeting chaired by Prime Minister Raja Pervaiz Ashraf, the challenging multi-billion dollar Iran-Pakistan gas pipeline was approved, while a deal transferring the management of the Gwadar port from Singapore to China was also given the go-ahead.

“The cabinet today gave approval to transfer Gwadar port operations from Port of Singapore to Chinese Overseas Port Holdings Limited,” Information Minister Qamar Zaman Kaira told reporters after the meeting. “Both the companies have settled their deal,” he said, without giving a timetable for the transfer, adding that the decision was taken to meet the country’s soaring energy requirements.

Kaira said that Singapore’s PSA International could not develop or operate Gwadar “as desired” and said he hoped that under the new management the strategically located deep-sea port would soon contribute to Pakistan’s flagging economy. “The Chinese will make more investment to make the project operational,” Kaira said.

China provided about 75% of the initial $250 million in funding for the construction of the port in Balochistan. It is currently being operated by Singapore’s PSA International, but needs further development work to become fully operational. According to PSA’s Gwadar website, there has been no ship in the port since November.

According to defence and strategic analysts, China wants to use the port for commercial and defence purposes, which will undermine US influence in the Arabian Sea.

Iran-Pakistan pipeline project

Referring to the Iran-Pakistan pipeline project, Kaira said Iran is an important country for Pakistan while downplaying US pressure on Islamabad to scrap the project. An agreement on government-to-government cooperation on engineering and the procurement and construction of the pipeline on the Pakistani side was also approved.

Kaira said the cabinet has also constituted a four-member committee to finalise modalities for arranging finances for the pipeline. The committee will include the finance minister, petroleum minister, law minister and State Bank governor.

The cabinet also approved an agreement to obtain $250 million in loans from Iran to finance the $1.5 billion project. A petroleum ministry official said the government was also negotiating for another $500 million loan with Iran.

Analysts wary of decisions

A mechanism to enter into a financial agreement with Iran will be tough to manoeuver for Pakistan, since the United States has publicly said the pipeline project would violate US restrictions on major financial deals with Tehran.

Secretary of State Hillary Clinton had earlier called the project ‘inexplicable’, adding that it could invoke US sanctions that would further ‘undermine’ Pakistan’s “already shaky” economy.

Even though the cabinet’s decisions seem to have been taken in the national interests, analysts have questioned the timing of the approval.

“An outgoing government has no business to take decisions that have far-reaching implications for the country,” said former ambassador and foreign secretary Shamshad Ahmad Khan. Khan said the decision should have been taken five years ago, adding that the timing suggested it was a politically motivated decision.

Ombudsman office

The cabinet also approved the Ombudsman Institutional Reforms Bill 2013, which aims at providing vast powers to the Ombudsman Office for speedy justice.

Kaira said the existing 11 ombudsmen institutions will be unified under the proposed bill. “If Parliament approves the bill, it will empower the toothless tiger,” he said referring to the office, adding that there were over 45,000 appeals pending for disposal before the federal ombudsman.

Furthermore, a four-year term has been proposed for the ombudsman, who can only be removed according to the prescribed manner for the removal of a judge of the Supreme Court. All government departments will be obligated to respond to the ombudsman’s queries within a fortnight, while the ombudsman will also be bound to dispose appeals within 45 days.

Under the bill, appeals against the ombudsman’s decisions can only be filed to the president, who will be bound to dispose of the appeal within 120 days.

Apart from this, the cabinet also approved the Strategic Trade Policy Framework 2012-15.

Published in The Express Tribune, January 31st, 2013.

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Reader Comments (46)

  • S
    Jan 31, 2013 - 3:23AM

    This is great news INSHALLAH May ALLAH put barakah in these decisions

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  • Nasir Abbas
    Jan 31, 2013 - 3:25AM

    I pray for the completion of Pipe line. The task will be achieve if the money is spent under the supervision of Iran. We have heard many a times 10%7 percents.

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  • Arindom
    Jan 31, 2013 - 4:13AM

    hmm….selling of the country by bits and pieces — ports and markets to China, agriculture fields to Arabs, mountaneous regions to extremists…..

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  • John B
    Jan 31, 2013 - 4:28AM

    Arabian sea and access to warm waters of Indian ocean have been the central theme of WWII. So, PAK can forget about China operating that port with navel anchoring rights. China may be a part of investment group but that is all to it. The very reason, the Pashtuns and Balochs were separated between Afghanistan and Iran is to restrict the old central Asian powers from accessing the sea. Shipping lanes have not changed since.

    If port goes to China with navel rights, Balochistan will be a free nation or Pashtunistan will be born.

    PAK geo location pomp depends on playing this card and, unless PAK wants to entangle in another global game, hopefully it is a bargaining political ploy between US and India and to thump the chest in coming election.

    As far as Iran pipeline-how many times we heard this: not going to happen until the US embassy in Tehran is operational. So, make plans for alternative means of gas import for another 10 years.

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  • Hasan
    Jan 31, 2013 - 5:02AM

    sad day for the country.. one more prime resource handed to the shrewd chinese… we are slowly becoming a chinese colony.. no one is still clear, what was wrong with the Singapore company?

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  • Jan 31, 2013 - 5:42AM

    That’s too late but certainly not too little.

    With Chinese collaboration once this port starts running near full capacity the area will get huge business.It’ll become an economic hub.

    For Dubai, ships have to wait for days for the route clearance due to Strait of Hormuz, where only a few ships can cross at a time.The location of Gwadar Port is such that the whole world business converges and diverges at this place.

    Good for the people at Gwadar,Good for Balochistan and certainly Good for Pakistan.

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  • Asim
    Jan 31, 2013 - 6:05AM

    Should we call it another electioneering campaign ………. It’s too late

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  • Pragmatist
    Jan 31, 2013 - 6:56AM

    A nation that can build a nuke cannot manage a deep-water port? Something is wrong here.

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  • Fahad Hussain
    Jan 31, 2013 - 7:13AM

    Its better late than never .

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  • Abu Zulfiqar
    Jan 31, 2013 - 7:16AM

    Whatever is in our national interests, we must pursue it. Threats from “allies” shouldnt be taken lightly either. I-P pipeline is a Pakistan-Iranian venture. They have no locus standi over who we engage in trade with.

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  • Arijit Sharma
    Jan 31, 2013 - 7:39AM

    History repeats in different forms. Pakistan and Americans fought the Soviets to deny them access to the warm waters of the Arabian Sea. Now Pakistan gives similar access to the Chinese. I am afraid, India will have to team up with the Americans to deny the Chinese easy access.

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  • Jan 31, 2013 - 7:54AM

    The priority is what would be in ‘Pakistans’ best interests for its future. If its China so be it!

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  • Mika
    Jan 31, 2013 - 8:12AM

    Why it is too late?

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  • Raja
    Jan 31, 2013 - 8:13AM

    Pakistan could manage to build nuclear arsenal but can’t manage Gwadar port on its own? Interesting.

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  • polpot
    Jan 31, 2013 - 8:18AM

    ” During the cabinet meeting chaired by Prime Minister Raja Pervaiz Ashraf, the vexed problem of Load Shedding was also ordered to be stopped forthwith.
    ++++++++++++++++++++++++++++++++++++++++++++++++++
    If wishes were horses.

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  • mengal baloch
    Jan 31, 2013 - 8:53AM

    First our gas now our port. Does the government think balochis are non living being and dont have to be consulted atal.

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  • sabi
    Jan 31, 2013 - 9:15AM

    Gwadar port is a second defence line for Pakistan navy and permanent base for China to look after safe passage for her ships carrying oil from Iran.Its alleged purpose of bringing economic prosperity for Pakistan is a blatant lie and can be compared to water car kit fraud.Ruling elite should stop lying to its people who associate lot of hopes for this project which in fact is mirag in desert.There is extreme lack of criticle thinking in public which create unnecessarily hopelessnes.

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  • Jan 31, 2013 - 9:15AM

    The PPP thinks the whole nation is a damn fool and only PPP is the sensible option available. This is that what they think?
    The glory hunter Musharraf delayed handing over the Gwadar Port to China and the PPP has gone one-step further by delaying it for five years and granting approval at its outgoing. Of course, the consequences for Pakistan can take a hike.
    The Ombudsman Bill 2013 is another case in point. The Supreme and High courts cannot be circumvented. The Ombudsman office is a quasi-court and is being made to look like an institution above the courts. The appeal to the president with a decision to be given in 120 days is also out of order.

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  • Hairaan
    Jan 31, 2013 - 9:39AM

    Hurry up. Collect all the kickbacks before the Govt. ends.

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  • Shah
    Jan 31, 2013 - 10:06AM

    Oh… Very good :)

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  • O2
    Jan 31, 2013 - 10:09AM

    China taking over Gawadar will turn around things over there for good, things will improve once this Government leaves in a month or so. UAE, USA & India does not want Pakistan to devlop Gawadar since it is a deep sea port, China will be a major stakeholder & this port will become a major port in the world if it is managed properly, this is one of the few reasons why Baluchistan is in a mess as foreign powers do not want Baluchistan to be an important assest for Pakistan. I hope next Government thinks about Pakistans interest.

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  • DevilHunterX
    Jan 31, 2013 - 10:41AM

    @mengal baloch:
    Do Balochi have any plans to do something anything in Balochistan’s economy? Please do tell.

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  • O2
    Jan 31, 2013 - 10:52AM

    To all the Indian troll’s : Why are you guys so afraid of China & Pakistan working together lol? stop crying out, but what can i say since this is the culture of India, to cry about everything good or bad about Pakistan all the time :) Anyway, ports are managed by different frims all around the world, check out DP world ( which is owned by UAE) which manages many ports around the world & India has given its Jawarharlal Nehru Port to DP world. So this means India has sold out itself to UAE? lol grow up kids then present your arguements overe here :) We will keep you safe, don’t worry ;)

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  • syed baqar ahsan
    Jan 31, 2013 - 10:56AM

    Now doing what was asked five year back by the “establishment” in the national interest. During last five years remains confused about who made them to complete their duration,people in power corridors make them belief it is America,big NO,wasting 5 or 10 years of a nation is no problem for our politicians,

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  • IndianDude
    Jan 31, 2013 - 11:24AM

    @Pragmatist
    “A nation that can build a nuke cannot manage a deep-water port? Something is wrong here.”

    Go easy buddy! One can not import “deep-water port” capability from china in c-130 military plane and reassemble it (after doing necessary paint job)!

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  • Eric Kumar
    Jan 31, 2013 - 11:43AM

    Stragically speaking, It will much easiar for U.S. and India’s navies to take care of China and Pakistan. Lookin geographically also China is wayoff and to defend it’s assets esp.Gawadar. India and U.S. Air forces can eaily make Gawadar unoperateable. It is shame for Pakistan to hand over it’s stragic and important assets to other countries esp. China. History shows China is friend with snakes in it’s sleevs.It is shame Pakistan claime to make nueclar bombs and you can not manage your assets.

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  • Karim Javed
    Jan 31, 2013 - 11:48AM

    At Least They Will Run This Country Better Than Any One Else.

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  • Avatar
    Jan 31, 2013 - 2:58PM

    Great decsision from the governemtn, we can’t develop it ourselves so its better to give it to China the only real ally Pakistan has in Asia. Feels similar to what happened with Hong Kong :) I ma so happy :) Pak-Sino Brotherhood zindabad.

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  • MZ
    Jan 31, 2013 - 3:06PM

    @Hasan:
    worst wrong side of Singapore is that they are not operating as we required. just wasting time to create opportunities for gulf countries. Gulf countries growing rapidly with just their ports. Think again ……………… are we growing ??

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  • MZ
    Jan 31, 2013 - 3:10PM

    worst wrong side of Singapore is that they are not operating as we required. just wasting time to create opportunities for gulf countries. Gulf countries growing rapidly with just their ports. Think again ……………… are we growing ??

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  • MZ
    Jan 31, 2013 - 3:13PM

    @Eric Kumar:
    Shame on you guys too who are making trade deal with China first look your country………

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  • Jan 31, 2013 - 3:31PM

    @O2: ” DP world ( which is owned by UAE) which manages many ports around the world & India has given its Jawarharlal Nehru Port to DP world. So this means India has sold out itself to UAE?

    DP World is engaged in the activities of handling the operations of containers on the port . They do not manage the port . . For your kind information JNPT ( Jawaharlal Nehru Port Trust ) manages the port (fully manged by Indian officials) and not by the DP world . There is difference in the job of container handling and managing the port.

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  • QC
    Jan 31, 2013 - 6:38PM

    SALE! SALE! SALE!Recommend

  • usman
    Jan 31, 2013 - 8:49PM

    good decision about Gawadar. However.skeptical about gas pipeline in current global scene

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  • syed baqar ahsan
    Jan 31, 2013 - 9:14PM

    @Hasan:
    Singapore is a cover name for American, purpose was to deny access to all regional countries including Chinese and Russian .Delay in its further development in economic/transit/trade center.Even Dubai/GCC was not happy on new hub at the mouth of Persian Gulf.

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  • A Khan
    Jan 31, 2013 - 9:44PM

    look at the map of pakistan at PSA Gwadar’s website: http://www.psagwadar.com/pdf/Gwadar.pdf

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  • Mullah kuta
    Feb 1, 2013 - 2:19AM

    Pathetic decision by an outgoing government which didn’t have the guts to do this at the start of its term……this will be reversed by the new government …….as usual a waste of time , effort and money by our pathetic leaders

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  • Naresh
    Feb 1, 2013 - 4:56AM

    .
    Ports require a Hinterland for support.
    .
    What is the Hinterland supporting Gwadar?.
    .
    Cheers

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  • Gujesh
    Feb 1, 2013 - 9:25AM

    Let running the country also be outsourced to China. Yes, there will be price to it. But rest assured, they will solve all your major problems.

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  • antanu g
    Feb 1, 2013 - 3:36PM

    @DevilHunterX:
    fully agreed with you.

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  • Rex Minor
    Feb 1, 2013 - 5:33PM

    @John B:
    This is the take away present to USA for their exit from the warm waters to Pacific their future home.

    Rex Minor

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  • John B
    Feb 1, 2013 - 11:56PM

    @Rex Minor:
    Not going to happen. The US controls PAK purse. End of story.

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  • wali khan dogar
    Feb 10, 2013 - 3:02PM

    Iran agreed to offer $500 million loan in the Gawadar Port construction and offering Pak Iran gas pipe line at a reasonable price, doing all good in our favor they still not being giving the required strategic importance by the government just because of US interruption, they(US). have a problem and some reservation over Tehrans nuclear program, US threatening us not to deal with Iran on this gas pipe line project,and any other deal with Iran, now the question is that if the US have reservation over Iran nuclear program why we bear the loss. the solution is simple and straight that the government should to finalized the deal wiith and it should be functional as soon as possible, by keeping the energy requirements of the country in mind.

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  • wali khan dogar
    Feb 10, 2013 - 3:06PM

    Iran agreed to offer $500 million loan in the Gawadar Port construction and offering Pak Iran gas pipe line at a reasonable price, doing all good in our favor they still not being giving the required strategic importance

    Recommend

  • MZ
    Feb 11, 2013 - 2:32PM

    In 1962, Mao Zedong himself compared the Forward Policy to a strategic advance in Chinese chess:

    Their [India’s] continually pushing forward is like crossing the Chu Han boundary. What should we do? We can also set out a few pawns, on our side of the river. If they don’t then cross over, that’s great. If they do cross, we’ll eat them up [chess metaphor meaning to take the opponent’s pieces]. Of course, we cannot blindly eat them. Lack of forbearance in small matters upsets great plans. We must pay attention to the situation.

    India’s continually pushing forward is against Pakistan and China. You can all see above all comments of Indian. what do you assume with it?? what should we do??

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  • Feb 20, 2013 - 11:05PM

    I enjoyed irritated comments of Indians, the regional-super-power-in-daydreams doesn’t look much happy with this decision, they are one step back at defensive position … Basically it’s a strategic decision and may be too late but not too little. I hope and wish this decision will help improving the stability in region and bring peace and prosperity to Baluchistan

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