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Singapore, others to sell their stakes in Gwadar port to China
KARACHI: The Port of Singapore Authority (PSA), Aqeel Kareem Dedhi (AKD) Group and the National Logistic Cell (NCL) have decided to sell their shareholding in the Gwadar Port to China, sources said.
A senior port official said that the government of China has agreed to take charge of the Gwadar Port and it is expected that the deal will be finalised by the end of this month. A Chinese delegation is expected to arrive soon to visit the Gwadar Port Authority and signed the deal. Since last year negotiations were going on between the shareholders and the Chinese officials, sources said.
PSA holds 60 percent shares in the Gwadar port while AKD Group and NLC hold 20 percent shares each.
The Gwadar Port is envisioned to become a major trans-shipment port and a shipping hub for the landlocked Central Asian States (CAS), Afghanistan and Western China. The Gwadar deep seaport is strategically located at the crossroads of the increasing important regions of the world that is the oil rich Middle East, resource-rich Central Asian Republics and populated South Asia.
The official said some amendments will be made in the concession agreement for the new operator.
It may be pointed out that China not only constructed the Gwadar Port but also provided 80 percent of the initial funds worth $248 million for the construction. Out of $248 million extended by China, $50million was given as grant to mark the 50-year of Pak-China friendship while $198 million was given as a soft loan. The port construction got started in 2002 and was completed in 2007. However, the port is yet to become fully operational.
The running of the port affairs was given to Port of Singapore Authority (PSA), one of the biggest port operators in the world 40 years so that it will fetch considerable business for making Gwadar port a success.
However, PSA and the government both failed to fulfil their commitments.
According to the concession agreement if any of the parties, either government or PSA withdraws from the agreement, it will have to pay the penalty or the amount will be double that of investment. As a result, both the parties were reluctant to withdraw. However, to resolve the issue it was decided to handover the port to the Chinese by transferring shares. A legal expert said that it was a typical share purchase agreement and would be executed as per regulations defined by the regulator.
He said that there was no legal or constitutional glitch in such a deal where all stakeholders had reached an understanding.
Ports and shipping experts believe that if Gwadar port is marketed well, other regional ports will lose considerable business. Gwadar has the strategic value once it is properly connected through an extended road network.
They said the its right decision to change the port operator otherwise the Gwadar port is losing this opportunity vis-a-vis fast developing Iranian port of Chabahar and other regional ports. If this deal materialises than there would be no difficulty in changing the port operator and it is a good step that China will run this port, they said and added in the current scenario China is the only country which is working actively in Pakistan on different projects. Ports experts believe that Balochistan government cannot run the port affairs as it is a commercial port and it needs commercial ports & shipping experts to make the port operational as per its original master plan.
Singapore, others to sell their stakes in Gwadar port to China - thenews.com.pk
So will there be some programs to sell plots in Gawadr? in near future???
Any updates on Gawadar... I have investment there
Urea shipment reaches Gwadar port
KARACHI: Two consignments of urea, imported by Trading Corporation of Pakistan (TCP) to meet demand in Rabi season, have reached Gwadar Port.
In August this year, the Economic Coordination Committee (ECC) of the Cabinet asked TCP to import 0.3 million tons of urea to avoid any shortage during Rabi crop as the domestic urea plants were unable to produce commodity due to gas curtailment.
Following the ECC directives, TCP successfully opened tender for urea import on August 27, 2012 and finally awarded the contract letters to four international suppliers, which were agreed to supply urea at lowest price of $399.38 per ton.
Out of 12 participants, M/s Key Trade AG Switzerland offered the lowest price of $ 399.38 per ton for 100,000 tons and accordingly got contracts letter. To complete the procurement of total targeted quantity of 300,000 tons, TCP invited other bidders to match the lowest bid, hence the import contracts for balance quantity were awarded to three other bidders namely M/s Dreymoor Fertilizer Overseas (PTE) Ltd, Singapore for 100,000 tons, M/s CHS Europe, Switzerland for 50,000 tons and M/s Transammonia AG Switzerland, for 50,000 tons.
As per schedule, submitted by the successful bidders, the two ships namely “Mandrin Glory” and “Marie Paul” carrying about 50,733 tons and 47,640 tons urea, respectively has reached Gwadar Port and both ships are now under discharge port.
Sources said another ship Namely Shan Dong Hai Tong carrying some 52,447 tons of urea has also arrived at FAP. In addition, three more ships are expected to reach Pakistan in first and second week of October 2012. With timely arrival of first consignment, it seems that TCP will complete urea import operation in specified time period to avoid any shortage in Rabi season. “Urea operation, being conducted by TCP, is likely to be completed in third week of October 2012,” they added.
Urea shipment reaches Gwadar port
A great game begins as China takes control of Gwadar port
China is set to take operational control of Gwadar, the deep-sea port built with financial and technical assistance from China on Pakistan's south-west coast, after the Port of Singapore Authority (PSA) has decided to pull out of a 40-year port management and development contract signed in 2007. Now China will also operate the port, which is strategically located close to the Pakistan-Iran border and the Strait of Hormuz in south-western Balochistan province.
Pakistan's ports and shipping minister, Babar Khan Ghauri, has confirmed that the government has issued a no-objection certificate to quit the contract held by the PSA, which is going to sell its shares to a Chinese company. The Singaporean firm decided to quit the Gwadar project after Pakistan's government failed to transfer land needed to develop a free zone, as was promised under a 40-year concession deal signed in February 2007 during former president Pervez Musharraf's regime. Since its official opening in March 2007, the Gwadar port has been unable to become fully operational because of the unsettled issues between Islamabad and the PSA.
Gwadar is an important coastal town in Balochistan. The port has the potential to serve as a secure outlet as well as a storage and transshipment hub for the Middle East and Central Asia oil and gas supplies through a well-defined corridor passing through Pakistan. China has contributed about $198 million (Dh727 million) of the initial investment for the port project.
Under the development plan, Gwadar port will be connected with China's western province of Xinjiang through rail and road links. China's eastern seaboard ports are 3,500 kilometres away from the city of Kashgar in western China, whereas the distance from Kashgar to Gwadar is only 1,500 kilometres. The port facilities are thought to be ideal for China's booming economy. Even if Chinese companies and exporters handle their own cargo, it would make Gwadar port one of the busiest in the region.
Gwadar gives China a land-based oil supply port that is not controlled by superior US naval power. The first thing China is supposed to do as operator is to relaunch the Gwadar oil refinery project, which was halted in 2009, probably because of security concerns in the volatile province. The refinery will have a total capacity of 19 million tonnes of oil per year. The petroleum products produced in Gwadar refinery may be transported to Kashghar in western China by pipeline. The proposed refinery and the oil pipeline is actually a part of a planned Pakistan-China energy corridor.
Gwadar port, through the proposed energy and trade corridors, gives western China access to the sea. Crude oil imports from Iran, the Arab Gulf states and Africa could be transported overland to north-west China through the port.
China considers Gwadar very important for its oil trade, as the present choke point is the Strait of Hormuz, which is becoming congested. In particular, a strategic pipeline from Gwadar to China's borders enables Beijing to import oil from Saudi Arabia. In 2006, King Abdullah reportedly asked Islamabad to help Saudi Arabia to extend oil exports to China.
China is the world's second largest importer of oil, with 80 per cent of imports going through the unsafe Strait of Malacca. A railroad and oil pipeline linking Gwadar with Kashi in western China provides Beijing with the shortest possible route to the oil-rich Middle East, avoiding the Strait of Malacca and the dangerous maritime routes through the South China Sea, the East China Sea and the Yellow Sea. Chinese engineers have already completed a feasibility study for a railroad and oil pipeline, which would enable Gwadar to handle most of the oil tankers headed to China.
The operational control of the port will also enable the dragon to swim in the Indian Ocean, which is strategically important for China as it expands its influence across the region. To ensure the security of shipments along existing routes, a Chinese naval presence at Gwadar could also patrol the Indian Ocean sea lanes. What upsets Washington and New Delhi is the Chinese naval presence near the Strait of Hormuz and its strategy of building a "string of pearls" presence on the Indian Ocean rim.
The US considers Chinese presence in Gwadar a threat to its fleet in the Middle East and also to the strategic oil trade to the Far East and Europe. The US military bases on the Arabian Peninsula expect an interception threat to their communications from Chinese bases in Gwadar.
The quest for energy security has made India and China competitors in the global energy game. China's involvement in Gwadar is believed to be guided by its interest in turning the port into a transit terminal for Iranian and African crude oil imports. Beijing's growing stakes in the port send ripples of anxiety in New Delhi, which interprets it as a move to control strategically important energy sea lanes.
As a competitor of China, India is engaged in developing Chabahar port in Iran that also provides access to the countries of Central Asia and Afghanistan bypassing Pakistani territory. With Chinese involvement in Gwadar and Indians in Chabahar, the two ports are likely to emerge as strategic competitors in the region.
The players of the new great game are struggling to control the proposed transnational energy pipeline routes, and Gwadar is China's key node in the game. It enables China to become a regional policeman monitoring the supply routes for its energy shipments from the Middle East. In fact, China is going to have a key card in its hands as Gwadar port will play a pivotal role in all the major trans-regional pipelines originating from the Middle East, Iran or Central Asia.
The Iran-Pakistan gas pipeline was originally planned to extend from Pakistan to India in 1993. The United States has been opposing the project because of Tehran's nuclear ambitions. After India's withdrawal in 2009, Beijing showed interest to join the project and to build an Iran-Pakistan-China gas pipeline, which could provide a secure overland gas supply.
Very interesting points made. ^
980 million Gawadar water plant project will be completed by December 31
Gwadar cooperation opens up Central Asia to global marketplace
Global Times | 2012-10-16 20:25:04
By Aftab Hussain
There have been hot discussions since Pakistan decided in September to provide operational control of the Gwadar port to China.
The decision has been welcomed by many in Pakistan and is seen as a giant step in further consolidating Pakistan-China friendship. With its critical strategic location, the port provides the shortest possible sea route to the Central Asian republics and connects the Middle East with China, Central Asia and Russia.In 2007, operational control of the port was given to Singaporean company PSA International for 40 years, but the firm could not fulfill the commitments made, and decided to pull out.
Much of the world's oil moves through the Strait of Hormuz, close to Gwadar, giving it the potential to be turned into an energy hub.China is heavily dependent on oil from the Gulf to fuel its expending economy and production. At present, the oil it receives passes through a very long route. It starts in the Strait of Malacca from where it reaches China's east coast and is transported overland to western China. This transportation is very costly. Gwadar provides a cheaper and shorter route.
Nevertheless, China is not the only beneficiary of the Gwadar port. Landlocked Central Asian states are also set to make significant gains. Tajikistan can transport its gas to the world, once the pipeline is extended to the port. For Uzbekistan and Turkmenistan, the shortest possible route to the sea is through Gwadar.And Afghanistan's gateway to the world has always been through Pakistan. For a stable economy, this land locked country needs an opening to the sea, and Gwadar has the potential to provide that. Pakistan and China will not get the sole benefits of the development of Gwadar. Instead, the whole region will prosper.
The two countries intend to build a railway link between Xinjiang and Gwadar. This will not only enhance the mobility of goods, but also cut the cost of transportation by road.There is an existing railway link between Pakistan, Iran and Turkey, and the three countries have decided to extend this railway link to Europe.If China agrees, the railway link from Xinjiang to Gwadar can be connected to the current Iran, Pakistan and Turkey rail link.
This will provide Chinese goods with another route to European markets.The development of the port is a cause of concerns for many countries in the region, especially India. The port and a naval base at such an important strategic location enhance the importance of Pakistan. India is already trying to increase its influence in the Arabian Sea and does not want any competitor. It feels threatened by the development of the port.
New Delhi is pressing hard to increase its influence in Afghanistan and the rest of Central Asia, but once the port is developed, all these states will be dependent on Pakistan and will no longer remain under Indian influence.The closer Pakistani-Chinese strategic partnership is already seen by India and the US as a threat to their interests in the region.
The US is increasing its influence in the Asia-Pacific region, especially in the Strait of Malacca, and is empowering India to stand against China. The superpower has concluded many defense and strategic agreements with countries in the region. This is seen by defense analysts as an attempt to contain China and block its mobility in the Southeast Asian region.
According to Pakistan Economy Watch, a "willingness on the part of Beijing to take control of the port will encourage investment and professional handling of port operations. It will bring two countries closer and promote social and economic development." Gwadar remains the only safe and feasible option which provides China an opportunity to counties with its economical activities to the external world.
The author is a researcher at Islamabad Policy Research Institute. [email protected]
Gwadar cooperation opens up Central Asia to global marketplace - Globaltimes.cn
Gwadar linkage road delayed: revised PC1 cost rises to Rs 12 billion
Due to delay in completion of the project, the cost in revised PC1 of Gwadar linkage road increased from Rs 7 billion to Rs 12 billion, incurring unnecessary loss of Rs 5 billion to the national exchequer. This was revealed by the officials of National Highway Authority (NHA) while briefing the National Assembly Standing Committee on Communication regarding infrastructure network at Gwadar vis-à-vis National Trade Corridor (NTC).
The committee which met with Seed Zafar Ahmad in the chair Thursday, expressed serious reservations over the delay in completion of Gwadar network. The chairman of the committee said China may have signed or going to sign an agreement with the government of Pakistan under which $10 billion would be spent on the development of Gwadar Port. NHA officials said due to security reasons the completion of Khuzadar-Ratodero section has been delayed and the cost of revised PC1 has increased from Rs 7 billion to Rs 12 billion.
The committee rejected the proposal of the Communication Ministry and NHA to include security cost in the project cost on the plea that if once this precedent was set, it would be demanded for every project being initiated in the country. The committee lashed out at the Ministry and NHA for not completing the portion of Khuzadar-Ratodero road section in Sindh where there were no security issues.
NHA officials said FC has demanded Rs 1 billion per annum as security cost to provide security on different road projects in Balochistan. Due to security reasons, local contractor has also not been able to complete the project, officials maintained. NHA officials informed the committee that timely completion of Gwadar linkages is only possible if requisite funding is made available with proper security. The government of Balochistan should ensure provision of security while FC be deployed on M-8 project, they maintained.
The committee observed that all the oil and gas exploration companies were doing their work in the province, but they arrange their security themselves. Therefore, NHA should award these contracts to FWO, if they could not carry out these projects. The committee directed to call on Chief Secretary, Home Secretary, IG Balochistan and FC Commandant in the next meeting to prepare a proper roadmap for completing these important road projects in the province.
The committee observed that NHA may take the matter of provision of security, for its employees and contractors to government of Balochistan through proper channel to timely complete Gwadar-Hoshab Road (M-8). The completion of Gwadar linkages (National Trade Corridor) will bring the economic upheaval in the lives of people.
Earlier, secretary communications briefed the committee members about the strategic importance of NTC improvement programme. The vision of the NTC improvement programme is to plan to improve logistics, develop business and achieve sustained economic growth; to upgrade existing transport infrastructure and create new assets; to create greater synergies among rural, provincial and federally supported transport infrastructure; to develop broad range of support services such as shipping, freight management, bucking, insurance and banking; and to bring about substantive and qualitative changes to industrial and services base by better economic mix. Among the programme's targets are to reduce 50 percent travel time; to decrease 50 percent transportation losses and to reduce 70 percent road fatalities, the secretary added.
The committee was also apprised that in compliance with Public Accounts Committee (PAC) directives, NHA has adjusted outstanding liabilities with FWO and letters to this effect have been written to FWO on September, 6 & 24, 2012. Describing the adjustments, Member Finance (NHA) apprised the committee that FWO has deposited Rs 791.450 million on account of Motorway revenue for July, August & September, 2012. Correspondingly, NHA has paid O&M charges of Rs 138.061 million to FWO, he added. The committee directed Member Finance to provide the copy of written agreement to National Assembly Secretariat within 10 days for the perusal/examination by committee members.
Gwadar-Turbat-Hoshab section in Balochistan
ISLAMABAD: Due to law and order situation and urgency to complete the vital national projects on priority basis, Frontier Works Organisation (FWO) has been tasked to complete the construction work of Gwadar-Turbat-Hoshab section in Balochistan province.
The decision to this effect was taken by Prime Minister Raja Pervez Ashraf recently, senior officials of National Highway Authority (NHA) and Ministry of Communication informed the Senate Sub-Committee on Finance, on Monday. The meeting presided over by the prime minister was reviewing progress of development projects in Balcohsitan especially aimed at linking Gwadar Port with rest of the province and country. The committee expressed displeasure over the delay in completion of the development projects as well as considerable increase in the cost.
The meeting was informed that PC original cost was estimated at Rs 5.687 billion, which was revised upward to Rs 18.379 billion with allocation of Rs 3.302 billion in the Public Sector Development Programme (PSDP) for the current fiscal year.
The construction work on the three sections was started in 2004 with the completion date of September 2006 for the first two sections and September 2007 for the third section. However, date of completion was revised upward in the revised PC-1 to June 2008 for the first section and February 2012 for the second phase and September 2007 for the third. None of the sections were completed in the revised date and all of them are now expected to be completed in June 2013.
The chairman of the sub-committee directed the Ministry of Communication and NHA to present a list of projects in November and sites of these projects where security is needed for the early completion of projects under implementation in Balochistan for Gwadar Linkage. He also accepted the proposal of NHA for inviting inspector general of police along with Balochistan chief secretary for having discussion on security arrangements at project sites. He was also of the view that the Ministry of Interior can be provided funds for security arrangements at the proposed sites of the projects.
Ministry of Communication secretary and NHA chairman informed the committee that there is a dire need to have security arrangements in place at main highway projects that are under construction to link Gwadar Port to other provinces. They also requested the Senate’s sub-committee to have joint sitting with National Assembly’s Standing Committee on Communication for reaching a consensus on inclusion of cost of security arrangements at project sites in the province of Balochistan.
Finance Additional Secretary Nazrat Bashir fully supported the proposal for including cost of security arrangements in the initial project plan (PC-1) and said that it depends on how well the proposal is drafted by the NHA and how the Planning Commission proposes it to the Finance Ministry. However, she informed that the current fiscal year’s PSDP is already under implementation and allocation for security could be over and above the already made allocations for the projects of NHA in Balochistan linking Gwadar Port with the provinces. The Ministry of Finance has also to examine from where the additional funds would be arranged for security arrangements on the project sites at Balochistan.
Planning Commission Deputy Chairman Dr Nadeem-ul-Haq informed the committee that a total paradigm shift is needed in the system and reforms are the solution in early completion of the projects with no further escalation in their costs.
However, he proposed that Planning Commission has already finalised national economic growth and development strategy and Balochistan province is required to prepare according to its own needs development strategy, which help the province come back on economic prosperity and is able to attract investment.
Gwader Civic Centre
According to media reports, the prime minister of Pakistan is visiting Gwadar on November 9 or 11, 2012 to inaugurate the Gwadar Civic Centre, constructed by the Gwadar Port Authority. If the details of the project and previous expenditure on its inauguration are revealed, an amazing picture will emerge. The Gwadar Civic Centre project is a very small project, costing only Rs 188 million and comprising of a ground and mezzanine plus three floors. Its construction was started in March 2007 and was to be completed by the end of September 2008. However, it was actually completed during April 2012 and is now being inaugurated by the PM.The interesting part of the story is that the ground ceremony of this small project has already been carried out twice — once by the then president of Pakistan, General Pervez Musharraf and again by the then PM of Pakistan, Mr Shaukat Aziz. A huge amount of money was spent on these events; we are talking about billions of rupees. At the time of Musharraf’s visit, it was learnt that a C-130 craft had brought the president’s special car from Islamabad to Pasni. Due to some defect, the car was taken back to Islamabad and another car was brought from Islamabad to Pasni and then driven to Gwadar for the use of the president in Gwadar, which lasted only a few hours. Everyone knows that a visit by the president or PM to a place like Gwadar entails extraordinary security and unimaginable cost; apart from the VVIP and his team, a number of federal ministers, senators, MNAs, federal secretaries and the entire administration of the provincial government, including the chief minister, ministers and chief secretary also attend the ceremony. Now, one can only imagine how much money has been spent on the previous two inaugurations and will be spent on the upcoming one. It is not understood why there is so much hypocrisy in the case of Balochistan where small results are highly exaggerated and projected as big achievements. It is not understood why these huge amounts are not spent on the construction of vital roads, which have been lying in a half complete state for many years, and on the establishment of colleges and universities also in dire need of financial aid. Can anyone tell me what justification exists for spending billions of rupees to inaugurate a project worth Rs 188 million, which should actually have been inaugurated by the commissioner of the district?HAFEEZ BALOCH, Turbat, November 7.
Gwadar Port control goes to China today
ISLAMABAD – Chinese Ambassador to Pakistan Liu Jian has maintained that no one should be worried or annoyed by Pakistan’s handing over Gwadar Port to China.
Talking to Nawa-i-Waqt at a function here, the foreign dignitary disclosed that the agreement regarding the transfer of management of the deep-sea port was to be signed on Monday (today).
Jian said no third country should have reservations over this bilateral arrangement which had been decided by Pakistan and China mutually. About India's criticism and concerns regarding the handing over of the port, he replied that no country should have apprehensions over Pak-China cooperation. “This bilateral arrangement is in the economic interest of the peoples of China and Pakistan,” he went on to say. Asked that certain countries were thinking China would use this port for military purposes, the diplomat said this hypothesis was absolutely baseless.
To another query that whether China was worried because of the law and order situation in Balochistan, Jian said security was the responsibility of the Pakistan government. He said at present China had been working on at least 120 different projects in Pakistan; the government had given them security and they were not worried at all.
Asked if the change in government in Pakistan after the elections would have any impact on Pakistan-China ties, the ambassador said the friendship of the two countries was time-tested. “The leadership changed in China, but it did not impact the bilateral ties and friendship between the two states.”
Jian further said China wanted Pakistan’s solidarity and economic development and it would continue helping it. He was of the view that Pakistan should give more attention to its economic development, saying that Gwadar Port would play an important role to this end. He also said that China did not want any clash with any country because it had diverted its total attention to economic development.
AFP adds: China's acquisition of strategic Gwadar Port is the latest addition to its drive to secure energy and maritime routes and give it a potential naval base in Arabian Sea, unsettling India. The Pakistani cabinet on Jan 30 approved the port’s transfer, a commercial failure cut off from the national road network, from Singapore's PSA International to the state-owned China Overseas Port Holdings Limited.
The Pakistanis pitched the deal as an energy and trade corridor that would connect China to 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 slash thousands of kilometres off the distance oil and gas imports from Africa and the Middle East have to be transported to reach China, making Gwadar a potentially vital link in its supply chain.
China paid about 75 per cent of the initial $250 million used to build the port, but in 2007 PSA International won a 40-year lease with then-ruler Pervez Musharraf who was reportedly unwilling to upset Washington by giving it to the Chinese.
Andrew Small, an expert on China-Pakistan relations, told AFP "In the near-to-medium term, it appears that China's interests in this part of the world lean far more towards developing capacities to deal with threats to sea lanes of communication, Chinese citizens overseas and so on."
Plenty of Indian naval strategists are highly sceptical of the likelihood of many of the locations... actually being used as military facilities by China."
But Small does believe that Gwadar is the most mostly likely port to be developed by China for use by the Pakistan Navy, and potentially their own.
"Pakistan is probably the only government where the level of trust between the two militaries is high enough to make that a completely reliable prospect," he said.
Other Pakistani experts suggest that Islamabad is more likely to give the Chinese navy access to its existing naval bases of Karachi or Qasim. "China can always use those. So they do not have to build another naval base at this stage," said Hamayoun Khan, who teaches at the National Defence University in Islamabad.
Fazul-ul-Rehman, former director of the China Studies Centre at the Institute of Strategic Studies Islamabad, dismisses the prospect of China going to war in the Indian Ocean and calls Indian concern "propaganda".
But he says China has become more cautious about big investment projects in Pakistan due to security concerns. Taliban, sectarian and separatist violence blight Balochistan.
Gwadar Port control goes to China today | The Nation
Handing over ceremony shown live .. Finally it has happened......
Congrats on Seucurity of Pakistan , and arrival of new development and prosperity to Pakistan with our Friend China
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