Singapore port operator on way out of Gwadar

[LRE]

ISLAMABAD:

The largely-static cranes at Gwadar port may start functioning again as the impasse on port operations is expected to be resolved very soon.

Pakistan and Port of Singapore Authority (PSA) are negotiating to end their $750 million agreement to operate the deep sea port at Gwadar and sources say a final deal is expected shortly.

Former dictator Pervez Musharraf had handed over Gwadar operations to the PSA, a global port operator, under a concession agreement for 40 years.

The move annoyed Chinese leadership who thought of Gwadar as the gateway for their products to international markets.

Stalemate after stay order

The deal between the Gwadar Port Authority (GPA), on behalf of the government of Pakistan, and the Singapore giant ran into trouble mainly because of two reasons.

Firstly, the security situation in Balochistan hindered the PSA from investing the money it had promised in the agreement for the development of the port and off-shore infrastructure.

Secondly, the Supreme Court had issued a stay order against the allotment of Gwadar land to a foreign company, back in December 2010, on petitions filed by some individuals, including the Balochistan governor.

Officials privy to the negotiations told The Express Tribune that the PSA was frustrated over the delay on the issue by the Supreme Court and had finally decided to give it up.

The apex court is yet to issue a verdict on the matter, despite the stay order being in place for more than a year and a half.

An official at GPA said the negotiations to scrap the deal have been going on for some time now but the announcement of the final outcome hinges on the decision by the Supreme Court.

Handing over to Beijing

A source close to the Pakistan Peoples Party (PPP) leadership said the future of Gwadar was on the agenda when President Asif Ali Zardari travelled to China recently and held bilateral meetings with top leaders in Beijing on the sidelines of a regional summit.

Chinese leaders, according to the source, had always been keen to take control of the port they built for their own interests.

Another source, who was part of a meeting to prepare the agenda for President Zardari’s visit to Beijing, said Islamabad was ready to hand over Gwadar to a Chinese company once the deal with PSA is scrapped.

A top official at the Ministry of Ports and Shipping said that Islamabad could not have ended the deal unilaterally because the agreement Musharraf signed with PSA was ‘heavily biased’ in favour of the Singapore giant.

PSA would have dragged Pakistan into international litigation and there might have been severe penalties for scrapping the deal, he said on condition of anonymity.

“That is why we were waiting for closing it with the mutual consent of both parties,” the official added.

Published in The Express Tribune, August 9th, 2012.