Transferring of naval land to Gwadar Port Authority: PM again rejects summary

[LahoreEstate]

TAHIR AMIN
ISLAMABAD (May 10 2009): Prime Minister Yousuf Raza Gilani has once again rejected the summary for transferring of 584 acres of naval land at East Bay to Gwadar Port Authority (GPA). Prime Minister Gilani has given the decision in favour of Pakistan Navy against the Ports and Shipping Ministry for the second time, well placed sources in the Ministry of Port and Shipping told Business Recorder here on Saturday.

The sources revealed that the Law Ministry had ruled in favour of the Ports and Shipping Ministry's request to transfer 584 acres of naval land at East Bay to Gwadar Port Authority (GPA) to establish free industrial zones. This recommendation was then forwarded by the Port and Shipping Ministry for the second time to get the Prime Minister's approval.

According to the sources, earlier Prime Minister had rejected the summary after which the Ports and Shipping Ministry sought legal guidance from the Law Ministry to strengthen its case. The Law Ministry, in its recommendation, opined that if the land was not transferred to the GPA, it would be difficult for the Authority to fulfill its obligations of concessional agreement signed with Singapore Port Authority, the sources said.

"The Law Ministry had further opined that denial of land transfer would lead to legal complications with the SPA," said the sources. The Ports and Shipping Ministry informed the Law Ministry in its letter that the land was available for the Defence Ministry that could be used for Pakistan Navy.

The concessional agreement also provides that the free zone area would be customs-free and grants 20-year tax holiday to the businesses that may be established in the zone area. Under clause 5.3.3 of the concessional agreement, it is mutually agreed by both the parties that the GPA will acquire the land for the free zone area on or before specified dates.

In the letter, the Ports and Shipping Ministry proposed that if the Ministry desired transfer of Defence land to the GPA, on gratis basis, then the Prime Minister's approval might be obtained for the transfer of the said land in favour of the ministry on gratis basis, for further handing over to the GPA.

The sources said that free zone was a key to Gwadar port, meeting one of its primary objectives of transhipment. There could be no free zone without transhipment. "The purpose of the free zone is to augment and supplement port activities and to value-add cargo, thereby attracting more shipment into the port, which is the real source of revenue for any port," said the sources.

Realising the importance of the free zone area, the then President and the Prime Minister directed on February 2, 2007 that 584 acres of land in the possession of Pakistan Navy at East Bay, Gwadar, should be handed over to the GPA, for the said purpose as soon as possible. After protracted correspondence, the Ministry of Defence said that the land was transferred by the government of Balochistan to Pakistan Navy in 1960 on ownership basis.

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