Pakistan hands over Gwadar port to China’s firm

Pakistan`s President Asif Ali Zardari said hand over of the strategic Gwadar deep sea port would give new impetus to Pakistan-China relations.

Updated: Feb 18, 2013, 21:25 PM IST

Islamabad: Pakistan and China on Monday signed an agreement to hand over control of the strategic Gwadar port on the Arabian Sea to a Chinese company, a move that has raised serious security concerns in India.

Under the agreement for transfer of concession rights, the deep sea port will remain the property of Pakistan while the Chinese company will share profits from its operation.

China Overseas Port Holdings Limited will fully assume responsibility for Gwadar port in Balochistan province.

Speaking on the occasion, Pakistan’s President Asif Ali Zardari said the agreement would give new impetus to Pakistan-China relations and take bilateral political cooperation into the realm of economic cooperation.

The handing over of the operations of Gwadar port to China is a manifestation of growing ties and shows the trust that Pakistan has in the Chinese ability to deliver on infrastructure projects, he said.

The development of a trade corridor linking Xinjiang to the Middle East through Gwadar port will enhance trade between the two countries and in the region, Zardari said.

Gwadar has strategic importance for China as around 60 percent of its crude oil comes from Gulf countries that are close to Gwadar, he said.

The agreement was signed by Gwadar Port Authority chairman Syed Pervez Abbas, Major General Asghar Nawaz of the Army-run National Logistics Cell, AKD Security chairman Aqeel Karim Dhedi, Leo Fong of China Overseas Port Holdings and Port of Singapore Authority representative Faisal Javed.

Beijing provided about 75 percent of the initial funding of USD 250 million for building the port.

On January 30, the Pakistan government had approved the transfer of the management of Gwadar port from Singapore to China, which played a key role in its construction.

Pakistan`s decision to hand over the strategic Gwadar port to China is a matter of "serious concern" for India, Defence Minister AK Antony had said earlier this month.

"Chinese are now constructing that port on Pakistan`s request. In one sentence, I can say that it is a matter of concern to us. My answer is simple and straightforward," he had said.

Gwadar port is situated at a strategic location as it is located at the apex of the Arabian Sea and the mouth of the Persian Gulf. It is also only about 400 kms away from the Strait of Hormuz, a key global oil supply route.

It was being operated by Singapore`s PSA International and needs further development to become fully operational.

Information Minister Qamar Zaman Kaira had said last month that PSA International could not develop or operate Gwadar "as desired".

The Chinese will make "more investments" to make the port operational, he said.

PSA International had signed a contract to manage and develop Gwadar for 40 years.

China, which is Pakistan`s closest ally, had for long been a front-runner for taking over the port.

Beijing has been working to develop a string of harbours in the Indian Ocean and Arabian Sea.

It has funded ports in Sri Lanka and has been approached to help build a port in Bangladesh.

Pakistan`s former defence minister Chaudhry Ahmad Mukhtar had said in 2011 that Islamabad would be "grateful" to the Chinese government if a naval base was built at Gwadar.