News Updates

Centre set to handover Gwadar Port to Chinese Firm

ISLAMABAD: The government is set to hand over Gwadar port to a Chinese company with the same concession, terms and conditions that were earlier agreed with Port Singapore Authority (PSA), informed sources revealed.

However, non-clearance of allocated land required for making the port fully operational led PSA to quit the project. The problem is likely to persist with the Chinese company, sources in the Ministry of Ports and Shipping told Business Recorder. The government issued NoC to PSA in August this year, allowing the Authority to withdraw from the agreement and leave the port but it will take some time to handover the port to the Chinese company due to some procedural hindrances, sources maintained.

It was agreed in the MoU signed with PSA that to fully operate the Gwadar Port, government of Pakistan will provide required land, occupied by Pakistan Navy and Coastal Guard; this remains pending which accounts for PSA decision to sell its share to a Chinese company.

Pakistan Navy (PN) argues that it is the legal owner of 584 acres of land at Shamba Ismail in Gwadar which was allocated to PN against payment to the government of Balochistan for defence/operational purposes. PN claims that land at Shamba Ismail was made part of the Gwadar Port Development Plan without consulting PN. Ministry of Ports & Shipping has been pursuing the case for transfer of PN land to GPA since almost a decade. 

The Ministry took up the case with the Prime Minister in 2008 and after thorough scrutiny of records he finally approved the retention of land at Shamba Ismail by PN. And only 30 acres of land for the rail/road link from Gwadar Port to Free Zone/Container Freight Terminal was to be spared by PN. 

The government decided in 2002 to construct port in Gwadar to take advantage of its natural shelter. The main objectives for development of the port were trans-shipment, transit trade, Gwadar’s industrial development and city growth. Under a Financial arrangement with the Government of China, the port was constructed at an estimated cost of $287.8 million. China contributed to the tune of $220.26 million. M/S Arthur D Little prepared a Master Plan of the Port and identified Strategic Zones and Land Bank requirements for next 35-50 years.

In February 2007 through a concession agreement with PSA Gwadar Pte Limited, the management, operations, maintenance and development of Gwadar port were transferred to the concession holder for a period of 40 years under the Landlord concept. GPA’s share in gross income was calculated as follows: PSA Gwadar International Terminal Limited 9%, Gwadar Marine Service Limited 9% and Gwadar Free Zone Company Limited 15 %.

After taking possession of the Port as concession holder the PSA installed 02 Gantry cranes, 200 meter of single rails and one Sub-Station. In accordance with Schedule-5 of the Concession agreement the PSA was bound to invest $775 million for the Development of Port, which did not materialise.

The Concession agreement envisaged the following: (a) Multi purpose Port Terminal handed over to the Concession Holder for 40 years (b) 923 hectares of prime land required to be handed over to the Free Zone Company on 40-years lease basis (c) freedom of operation and remittances.

Following tax exemptions were granted: (a) Corporate income tax for 20 years (b) Income tax on interest income of loans acquired (c) stamp duties on loans acquired, Sales tax, all provincial and local taxes, charges and levies for 20 years (d) Import duties and sales tax on all imports for materials / equipment required for construction / expansion and operations of Port for 40 years (e) duties on ship bunker oils.

Business Recorder

Review of Gwadar port feasibility report urged

GWADAR, May 13: The Planning Commission has assured the Balochistan government of its full support for making the Gwadar port fully functional and completing the road network to link it with other parts of the country.

However, the commission`s deputy chairman Dr. Nadeemul Haq has asked the provincial government to review the port`s feasibility report, keeping in view its economic viability. `Most development projects in the country have been launched without properly preparing a feasibility report,` he told Dawn after a meeting held in the port town on Sunday. When during the meeting Dr Haq asked the officials concerned about the feasibility report and who had prepared it, they said they would brief the Planning Commission on the matter at a coming meeting to be held in Islamabad.

The deputy chairman of the Planning Commission advised the provincial government to study the report and look into the prospects for its development in line with the progress made by ports in Iran and Dubai. `The provincial government should submit its recommendations to the centre before decisions are taken for making the Gwadar port operational in the near future,` he said, adding that the proposals would be reviewed at a meeting between the provincial cabinet and the prime minister to be held in Islamabad soon. He said the federal government was determined to make the port fully operational in the near future, but it was necessary to review its economic prospects. He said it should be ensured that it was a viable project instead of making ambitious proposals. Dr Haq said the federal government would issue directives to the National Highway Authority (NHA) for early completion of the Gwadar-Turbat-Ratodero highway. He asked officials of the Gwadar Port Authority to explain why the Singapore Port Authority, which had been awarded contract for port operation by the Musharraf government for 40 years, was not working there.

The meeting was informed that the work on the highway was likely to be completed in a couple of months and Rs15 billion of the Rs18 billion estimated cost had been spent on it. Dr Haq said the remaining Rs3 billion would be placed at the disposal of the Balochistan government for release to the NHA after reviewing the pace of the work. NHA`s representative Mohammad Musa said the contractor and laborers were reluctant to resume work because of security concerns. Balochistan Chief Secretary Fatah Yaqoob said all security agencies had promised their support for security of officials involved in development projects. He said failure of the port project would impact adversely on the province`s development. The official said it had been envisaged in the feasibility report that 6.2 million tons of cargo would be handled at the port by 2030. Chief Minister Nawab Aslam Raisani said elaborate security arrangements would be made for the contractors and laborers working on highways. He said NHA officials had written directly to the federal government instead of informing the provincial authorities about their problems. The chief minister complained about non-implementation of the Balochistan package.

He pointed out that a notification for appointing the Balochistan chief minister as chairman of the Gwadar Port Authority was pending without any reason. He said the NHA had committed to complete the Quetta-Karachi highway by June 2010, but the work was still incomplete.


Ahmadinejad gets assurance: Gas, power projects to

ISLAMABAD: Iranian President Mahmoud Ahmadinejad was assured by Pakistani leaders on Thursday that they remained committed to the gas pipeline and electricity import projects despite international sanctions on his country.

Although he couldn’t get a firm timetable for making the energy projects operational, he appeared to have been satisfied with pledges of speeding them up and, in return, offered to enhance bilateral trade to $10 billion in a couple of months.

More importantly, the two sides commenced discussions on currency swap and barter trade arrangements to circumvent the US sanctions for doing business with Iran in the dollar.

“The President (Asif Ali Zardari) reiterated commitment for expeditious implementation of Iran-Pakistan gas pipeline project, 1,000MW electricity transmission line and 100MW Gwadar power supply,” a statement issued by the presidency said.

The PM’s Office in a press-note on Prime Minister Yousuf Raza Gilani’s meeting with Mr Ahmadinejad said: “Both leaders agreed to pursue the energy projects including electricity and gas on fast-track basis. They also discussed the status of Iran-Pakistan gas pipeline.”

Iran has been worried that Pakistan could abandon the gas pipeline and electricity import agreements under pressure from the West because of sanctions and has been seeking categorical assurances from Islamabad about its continued commitment to the projects.

In the meetings at the presidency and prime minister’s house the two sides discussed ways of enhancing bilateral trade, including proposals for currency swap, barter trade, removing tariff and non-tariff barriers and improved border coordination for facilitating businessmen.

The statement from the presidency said: “President Zardari proposed for considering encouraging barter and trading in local currencies between the two countries besides removing tariff and non-tariff barriers.”

US sanctions on purchase of Iranian oil in dollars have already made several other countries, including Russia, India and Sri Lanka, to make payments in gold or their own currencies. During talks at the prime minister’s house, the Iranian delegation expressed its desire to import one million tons of wheat and 200,000 tons of rice from Pakistan within weeks. Following fresh sanctions, Iran has increased procurement of grain from the international market bypassing the banking restrictions by paying in currencies other than the dollar and euro.

Measures for controlling drug trafficking and fighting terrorism were also discussed at the meetings. Both sides agreed to boost mutual coordination for countering terrorism, drugs and narcotics control and human trafficking, an official said.

President Ahmadinejad thanked Mr Zardari for Pakistan’s “keen interest in further strengthening existing cordial equation with Iran.”


Gwadar shipping agents plea to ECC

KARACHI, Feb 7: The Gwadar Shipping and Clearing Agents Association has urged the government to continue with the policy of calling of ships with public sector bulk cargo, particularly urea imports, at Gwadar port.

Association`s president Abdul Rahim Zafar, briefing newsmen at the Karachi Press Club here on Tuesday, appealed to the Economic Coordination Committee not to divert urea import to Karachi ports.

He explained that import of 722,000 tons of urea through Gwadar port generated economic activity in the area and local people benefited a lot because such a huge quantity of bulk cargo demanded all sorts of logistic support, including long and heavy vehicles, trucks for movement of cargo within port area and dock labor.

It was only due to rapid operation and handling of urea at Gwadar Port in a record period of 40 days that it helped government ensure timely supply of fertilizer to growers across the country to meet Rabi crop demand.

The deep draft of the Gwadar port, Abdul Rahim Zafar said also helped government meet economies of scale because larger vessels with a capacity of up to 50,000 tons were given berths.

He said presently Gwadar port is the only port of the country which has a draft of 12.5 meters whereas Karachi port has a maximum draft size of 11.6 meters. If the ECC decision of diverting urea import to Karachi port materializes, it would deprive Balochistan of its right.

The ECC decision, Mr. Zafar said would incur extra costs on imports of urea through Karachi port because with a draft of 11.6 meters, ships with capacity of 35,000 tons could call and that will result in higher freight cost to the national exchequer.

Against this, larger vessels calling at Gwadar port with bigger load and shorter time-frame saves millions of rupees to the nation, he maintained.

He believed that by continuing urea imports and other bulk cargo of public sector from Gwadar port would help provide jobs to locals in Balochistan and generate development activity.


Govt asked to divert ATT to Gwadar port

KARACHI, Jan 31: The Gwadar Chamber of Commerce and Industry (GCCI) has urged the federal government to divert the Afghan Transit Trade (ATT) cargo handling to Gwadar port on permanent basis and initiate ferry service for intending pilgrims to Iran. GCCI President Mir Naveed Kalmati at a news briefing here on Tuesday said that the only way to counter insurgency in Balochistan was to provide jobs to the youth and create economic activity of permanent nature.

He further demanded that trade with Iran should also be allowed, which will not only encourage two-way trade through official channels but also discourage smuggling which is causing huge revenue losses.

He said the federal government should have diverted all cargo meant for allied forces in Afghanistan to Gwadar port from the day one as this would have not only helped to make the port operational but western nations’ assistance for developing road network should have also been sought.

“If a ferry service is initiated from Gwadar port for intending pilgrims to holy places in Iran it will not only reduce travelling cost but also the distance because within two hours pilgrims will reach Chabahar port in Iran,” Kalamti explained.

He said annually around 0.4 to 0.5 million pilgrims go to Iran from Pakistan and this would help generate permanent nature of commercial activity in Gwadar in particular and district Makran as a whole.

He referred to recent imports of around 722,000 tons of urea by the government and was handled at the Gwadar port. In total, he said 18 ships loaded with urea were handled in a record period of 40 days without paying a single penny towards demurrage. Never in the past huge quantum of any bulk commodity had been handled without paying millions in demurrage because ships had to wait for weeks at outer anchorage for berthing turn.

Mr. Kalmati said urea handling activity at Gwadar port created diverse economic activities starting from providing clearing and shipping services to unloading, trucking, transportation and other allied services to the workforce engaged in entire operation and movement of urea.

In short, he said many locals got involved in various trades and services because on an average 19,100 tons urea were daily unloaded from ships and around 15,000 to 16,000 tons were transported from the port area to Karachi through the Coastal Highway.

He said that it was highly encouraging that around 35 per cent of transport involved in urea haulage was owned by locals and remaining 65 per cent by people from other provinces.

Since the port had been creating job opportunities the law and order situation in the district Makran was far better than other districts of the province.


Pakistan Navy has set up a free medical camp in Gw

An ISPR (Navy) press release issued here on Friday said that in pursuance of its perpetual efforts to contribute towards welfare and provision of relief to Balochistan in line with the government policy, Pakistan Navy has established a free medical camp in Gwadar for the local populace.

This medical camp would extend medical facility to more than 6,000 low income people suffering from various ailments. Gynecologist, surgical, eye and child specialists are positioned at the camp to provide treatment and conduct minor surgeries. Along with free medicines, a laboratory has also been set up for blood, ultrasound and x-ray tests. 

The medical camp also aims at educating the locals on prevention from diseases, child healthcare and sanitation of living areas. The press release further pointed out that Pakistan Navy establishes free medical camps for the coastal region on biennial basis. In the last medical camp at Turbat, more than 5,000 patients were treated. Patients with acute medical, eye and skin diseases were registered. Pediatric health was a major concern and over 1,100 pediatric cases were reported.-APP


Oman grants $17m for Gwadar airport

QUETTA, Nov 20: Oman has given a grant of $17 million to the Balochistan government for building an airport of international standard in Gwadar. According to official sources, 43,000 acres of land have been acquired for the airport that will have latest facilities.

The Civil Aviation Authority`s Director General Air Marshal (retd) Khalid Chaudhry discussed the project with Balochistan Chief Secretary Mir Ahmed Bakhsh Lehri.

The airport will be designed for both passenger and cargo flights.

The sources said the provincial government was taking serious steps to make Gwadar the winter capital of Balochistan besides making the port functional.

“The chief secretary has issued directives to ensure reopening of a five-star hotel in the town that was closed a few months ago,” they said, adding that the hotel`s administration had been asked to take steps in this regard.

The chief secretary and the Chief Minister`s Principal Secretary Hafiz Abdul Basit have held meetings in Gwadar to increase the pace of the implementation of the government`s announcement that the town will be the provincial capital from October to March each year.

About 80 per cent construction work on a district and provincial complex and major portions of other official buildings have been completed and the government has asked contractor companies to accelerate the work. The government is also mulling over holding a session of the Balochistan Assembly in Gwadar and local officials have been asked to review arrangements in this regard.

The decision by Nawab Aslam Raisani`s government to make Gwadar the winter capital has increased the importance of the coastal town.

“The move will have a deep impact on the economy and trade of the region and will also help remove the sense of deprivation among local people,” provincial minister Mir Hamal Kalamati said.


Gwadar made winter capital of Balochistan

QUETTA: Balochistan Chief Minister Nawab Aslam Raisani has declared Gwadar as the winter capital of Balochistan.

“Gwadar will be the winter provincial capital of Balochistan from Oct 21 to March 3,” the chief minister announced here on Wednesday.

He directed all government departments to make necessary arrangements for implementing the decision.

The proposal of making the coastal town the winter capital of the province was made by Speaker Aslam Bhootani two years ago.


Iran offers Pakistan electricity to meet energy

ISLAMABAD: Federal Minister for Petroleum Dr. Asim Hussain said that Iran has made an offer to Pakistan regarding energy requirements and the government is working on the project with the active assistance of the Ministry of Water and Power.

Talking to VOA, Dr. Asim Hussain said that Iran offered Pakistan 1000MW electricity to cope with the energy crisis. For this purpose, a project for laying transmission line is also under consideration, he added.

He said Pakistan is making efforts to meet its energy requirements of gas and electricity through different sources adding that if Pakistan imports electricity from Iran, its cost will be affordable for Pakistan.

He said that Pakistan is currently importing 35MW electricity for Gwadar and work is underway on a project to enhance it up to 1000MW. It is also making efforts to implement proposed gas pipeline project from Iran since 1990.

Replying to a question regarding future of Pak-Iran gas pipeline project, Dr. Asim Hussain said that we are working on this project, but we are also looking at international scenario and will move on it accordingly.


7th NFC Award inked at Gwadar

GWADAR: The Chief Ministers of four provinces on Wednesday signed the historic 7th National Finance Commission Award, marking a great step forward to the strengthening of the federation. The ceremony at the picturesque Gwadar, in the Balochistan province, was witnessed by Prime Minister Yousuf Raza Gilani and members of the Cabinet. The venue was specially chosen to reflect the desire of all the provinces to end years of deprivation of the largest province of the country.

The Award was inked by finance ministers of the four provinces in the presence of Punjab Chief Minister Shahbaz Sharif, Sindh Chief Minister Qaim Ali Shah, NWFP Chief Minister Ameer Haider Hoti, Balochistan Chief Minister Aslam Raisani, and Finance Minister Shaukat Tarin. The new Award would come into effect from the next financial year and marks the agreement by all the federating units over the distribution of financial resources among the provinces by the federal government on annual basis. Under the award, the population will be given 82 percent weightage, poverty 10.3 percent, revenue collection 5 percent (2.5 percent revenue generation, 2.5 percent revenue collection), and area 2.7 percent. Under the new NFC Award, the federation met the demand of the provincial governments for a greater share in the national resources.

The provincial share of the divisible pool would increase from 47.5 percent to 56 percent in the first year of NFC, and 57.5 percent in the remaining years of the Award. Under the new formula, Punjab would get 51.74 percent from the divisible pool, Sindh 24.55 percent, NWFP 14.62 percent and Balochistan 9.09 percent. In the new award, Punjab has given up 1.27 percent, Sindh 0.39 percent and NWFP 0.26 percent, while Balochistan has gained.


Germany assures cooperation in railway, CDM, HRD s

ISLAMABAD: A German delegation Friday called on minister for Railways, Haji Ghulam Ahmed Bilour and discussed matters of mutual interests and future cooperation in railways, Clean Development Mechanism (CDM) and human resources development. The delegation comprised German Consular Head Press and Economic Section Dr Gregor Schotten and Minister Counselor Deputy Head of Mission Stephan Roken. During the meeting, the Railways’ Minister sought German cooperation in CDM and infrastructural development including signaling, environment and low carbon emission. He requested the German government to provide grants or soft loans in these sectors and also sought cooperation in freight train management, adding that in 1970, the Islamabad Carriage Factory was established following technical and economic cooperation by the German government. The delegation assured the government of Pakistan for maximum possible cooperation in CDM, human resource development and hinted at support for standard gauge for new railway lines from Gwadar to Afghanistan, Iran and Havelian to China. The delegation said Pakistan railways is environment friendly so it could be realised that investment could be made by German government in Pakistan’s railways sector to make it more environment friendly and pollution-free. The delegation also reassured cooperation in Rolling Stock and highlighted various aspects of Pak-German historic ties in economic and other sectors, hoping that these relations would enrich in future. Secretary Ministry of Railways and chairman Pakistan Railway briefed the delegation about functioning of Pakistan Railways and its ongoing projects with the cooperation of different international partners.


Rs 6.18 billion for Gwadar airport

ISLAMABAD: The government has decided to provide Rs6.18 billion for construction of an international airport in Gwadar, despite an earlier decision that the airport would be built by the Civil Aviation Authority (CAA) from its own resources.

The total cost of the project is Rs7.5 billion. The government of Oman will provide a grant of $17.5 million.

Under the earlier decision taken at the beginning of the last fiscal year the CAA was to build the airport on the pattern of the Shaheed Benazir Bhutto International Airport in Islamabad.

The PC-1 of the project approved in July 2008 stated that CAA would use its own funds in addition to the Omani grant.

While an amount of Rs750 million was allocated in the development budget of the current fiscal for schemes forwarded by the defence ministry, the Central Development Working Party (CDWP) approved local financing of Rs6.18 billion for the airport.


Status of Golden Palms

The present status is that our NOC is in process of restoration which can be confirmed by GDA website. Once the NOC is restored we will continue the development work. Simultaneously, we will be in a position to handover the plot to the client.

Team Golden Palms