Law ministry for transfer of naval land to Gwadar Port Authority

[LahoreEstate]

ISLAMABAD (April 02 2009): Law ministry has given a go ahead to Ports and Shipping ministry to transfer 584 acres of naval land at East Bay to Gwadar Port Authority (GPA) to establish Free Industrial Zone.

Ports and Shipping ministry will move a summary within few days to seek Prime Ministers approval for transfer of land to GPA in the light of the opinion given by Law ministry, well placed sources in the ministry of Ports and Shipping told Business Recorder here Wednesday.

Sources revealed that earlier Prime Minister had rejected the summary and the P&S ministry has now sought legal guidance from the Law ministry that has backed the transfer of land to GPA.

Law ministry has said that if the land is not transferred to GPA, it would be difficult for the Authority to follow the confessional agreement signed with Singapore Port Authority (SPA), sources maintained. "The ministry further said that denial of land transfer would lead to legal complications with the SPA" sources added. Ports and Shipping ministry had informed the Law ministry in its letter that land was transferred to Defence ministry that could be used for Pakistan navy.

The ministry in a letter addressed to the Law ministry said that Balochistan government had 9000 acres with sea access to 278 acres, which is available for the ministry of Defence to shift its infrastructure to safeguard the coastal belt of Gwadar, sources added.

On the other hand sources said P&S ministry in its letter opined that by not transferring the Free Zone land to the Port of Singapore Authority (PSA) in accordance with the terms of the agreement is tantamount to breach of the pact.

The concession Agreement also provides that the Free Zone Area will be custom free and grants may be established in the Zone. Under clause 5.3.3 of the concession Agreement, it is mutually agreed by both the parties that GPA shall acquire the land for the Free Zone Area on or before the following dates.

In the letter, the P&S ministry has proposed that if the ministry desires transfer of Defence land to GPA on gratis basis, then PMs approval may be obtained for the transfer of the said land.

Sources further added that the port was formally inaugurated on March 20, 2007 and is presently handling wheat and urea shipments successfully. The operation of the port has been assigned to the PSA, the operators of international repute, for a period of 40 years under a concession Agreement signed between GPA and the PSA on February 6, 2007. The scope of the concession agreement includes cargo/terminal operations at the existing facilities and development of additional berths on 4.2Km space, which is available for this purpose.

Sources said that Free Zone is key to meeting Gwadar ports primary objective of transshipment. There could be no Free Zone without transshipment. The purpose of the free zone is to augment and supplement port activities and to value-addition of cargo, thereby attracting more shipment into the port which is the real source of revenue generation, sources maintained.

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 GPA, for the said purpose as soon as possible.

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