China to run Pakistani port

A Chinese company is expected to take over the operation of the strategic Gwadar Port in Southwest Pakistan and at the door of the Strait of Hormuz, after Pakistani authorities alleged its previous operator from Singapore failed to develop the port as desired.

Qamar Zaman Kaira, Pakistan's information minister, said Wednesday that the Pakistani cabinet gave approval to transfer Gwadar Port operations from the Port of Singapore Authority (PSA) to Chinese Overseas Port Holdings Ltd.

Kaira said that Singapore's PSA International could not develop or operate Gwadar "as desired" and hoped that under new management the port would soon contribute to Pakistan's flagging economy, according to AFP.

A PSA spokesperson told the Global Times the company had "no comments" on the issue.

The Gwadar Port is situated near the strategic Strait of Hormuz and is the nearest warm-water deep-sea port to the landlocked but energy-rich Central Asian republics as well as Afghanistan.

China, which has long been seeking an alternative to the Strait of Malacca, through which over 80 percent of China's imported oil passes, financed 75 percent of the initial development cost of $248 million for Gwadar Port.

"Six years after they reached an agreement to let the Singapore company operate Gwadar Port, the Pakistani government has become more and more impatient about the company's slow pace in tapping the full potential of the port," said Humayun Khan, an analyst based in Islamabad.

"Our government eagerly hopes the completion of Gwadar Port could bring a large number of employment opportunities and swell the income of the people in the less-developed Baluchistan Province," Khan told the Global Times. "And now, the Chinese company has shown its capability and willingness to spend more money to continue with the construction and operation of this port. The Pakistani people hope to get a ride on this development."

Chinese foreign ministry spokesman Hong Lei said on Thursday that Chinese companies have been actively involved in Pakistan's foreign cooperation projects and China will always support projects conducive to China-Pakistan bilateral friendship and Pakistan's development and prosperity.

While granting the operation rights of Gwadar Port to the Chinese company, the Pakistani cabinet also approved a government-to-government cooperation agreement with Iran to start work on building an Iran-Pakistan gas pipeline.

"The port has the potential to make Pakistan the trade corridor for Central Asian states, China and the Gulf states," Khan said.

Worsening security in the extremist-ridden Baluchistan, a lack of warehouse facilities, and slow pace in building rail and road links have clouded prospects that the port can soon be fully operational.

"As far as I know, there is no timetable on when the construction of the port will be completed or when to open it for business," a Pakistani source who is familiar with the matter and asked not to be identified told the Global Times.

Government approval is not enough to guarantee the acquisition of the port's operations by the Chinese firm, and a green light from Pakistan's Supreme Court or the parliament is still needed, the source added.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said he believed that the injection of Chinese investment could soon vitalize the port with strategic importance.

"The Singapore company put more value in the commercial benefits in operating the port, but for China, its strategic values is greater than the commercial significance," Lin said. "I do believe China will build the port at the astonishing 'Chinese speed' to materialize the port's strategic values."