Pakistan port transferred to China

February 19, 2013 - 12:25:12 am

ISLAMABAD: China yesterday took control of a strategic Pakistani port on the Arabian Sea, as part of a drive to secure energy and maritime routes that also gives it a potential naval base, sparking Indian concern.

The Pakistani cabinet approved the transfer of Gwadar, a commercial failure cut off from the national road network, from Singapore’s PSA International to a state-owned China company on January 30.

It was not clear when the handover will take place, but Pakistan President Asif Ali Zardari chaired the signing of a memorandum of understanding yesterday, broadcast live by local television.

“The contract of operation of Gwadar port is formally given to China. Today, the agreement is transferred from the Port of Singapore Authority to China Overseas Ports Holding Company Limited,” Zardari said.

“The award of this contract opens new opportunities for our people... It gives new impetus to Pakistan-China relations.”

The Pakistanis pitched the deal as offering an energy and trade corridor that would connect China to the 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 cut thousands of kilometres off the distance oil and gas imports from Africa and the Middle East have to travel to reach China.

“Gwadar will enhance trade and commerce not only between Pakistan and China but also in the region,” said Zardari.

China paid about 75 percent of the initial $250m used to build the port but in 2007 PSA International won a 40-year operating lease.

Then-president Pervez Musharraf was reportedly unwilling to upset Washington by giving control of the port to the Chinese.

On February 6, India’s Defence Minister A K Antony said New Delhi was concerned by Pakistan’s decision to transfer management of the deep-sea port to China, which has interests in a string of other ports encircling India.

Pakistan foreign ministry spokesman Moazzam Ahmad Khan dismissed the concerns last week. “This is not something that any other country should have any reason to be concerned about.” Gwadar is part of the southwestern province of Baluchistan, the most deprived part of Pakistan despite being rich in oil and gas deposits. The province is gripped by a separatist insurgency and record levels of violence.

Zardari said the building of infrastructure around the port will also economic activity in Gwadar and Baluchistan.

But analysts warn that it may be some time before Pakistan can benefit from China’s takeover, stressing that connecting roads and an expanded Karakoram Highway are yet to be finished.

They suggest that security concerns have made China cautious about big investment projects in Pakistan. In 2004, three Chinese engineers helping build Gwadar were killed in a car bombing.