Islamabad:
Pakistan has urged Chinese operators from the port of Gwadar and its free zone to fulfill their contractual obligations by subjecting a business plan limited to time, aimed at making the jewel of the Chinese-Pakistani Economic Corridor (CPEC) fully operational.
The question of delays in making commitments of the concession agreements of the China Overseas Port Holding Company (COPHC) was raised during a meeting of the joint working group CPEC on Gwadar. The session took place more than a month before the planned visit to Prime Minister Shehbaz Sharif in China for the Shanghai cooperation organization (SCO).
According to government sources, Chinese officials have been informed that Pakistan was still expecting a complete business plan for the free area of Gwadar. Islamabad asked for the investment calendar, performance indicators and operational forecasts to guide industrialization.
Pakistan highlighted the urgency of finalizing the design, financing, construction, operation and maintenance of the North free area. They called for a clear and time implementation strategy to transform Gwadar into a competitive transhipment center and a regional public transport gateway, the Ministry of Planning Authorities said.
In August 2021, L’Express PK Press Club reported that the CPEC cabinet committee had found the Chinese marketing plan for the port of Gwadar unsatisfactory. The case remained unresolved, although other projects, such as the International Airport, the Allied services and the first phase of the Eastbay Expressway, have progressed.
Pakistan has urged COPHC to fully use the port by developing a ship refusal installation, a GPL terminal and shipping ships. Officials noted that Gwadar Port and its free zone remain underperformants due to several problems. They called for an investment and marketing plan with clear deadlines and shows to attract strategic Chinese investors and industries, additional sources.
Chinese representatives replied that the port needs more resources for sustainable operations. They proposed the increase in shipping routes, support for policies and public transport trade and diverted part of the Karachi Port freight in Gwadar.
Pakistan has already implemented support policies to operationalize the port, but COPHC has not prioritized the development and industrialization of the North Free Zone. During the meeting, Gwadar port authorities prompted the accelerated construction of roads, water and electrical infrastructure in the northern free zone.
To make the port economically viable, Pakistan has withdrawn the requirement of bank guarantee for Afghan public transport freight. He also granted exemptions from the export policy to Chinese investor potentials, allowing the export of potassium sulfate.
According to the new regulation notified by the Ministry of Commerce, two Chinese companies, Agven Private Limited and Hangeng Trade Company Private Limited, have been authorized to export the fertilizer.
The authorities believe that the construction of the observation areas of the break-up and dredging will require significant funds. These investments would not be viable without first accelerating transhipment operations, freight flow and commercial activity.
Some progress has been made elsewhere. Feasibility studies for the Gwadar rail link and the second phase of the Eastbay Expressway, a 13.5 km project, were completed in December from last year. The completion of the second phase of this project will improve connectivity between the port and Gwadar International Airport. Pakistan proposed to sign the framework agreement for this phase either during the Prime Minister’s visit, or during the 14th meeting of the joint cooperation committee. Negotiations with China are planned to obtain subsidies for the Eastbay Expressway project.
Islamabad also urged Beijing to assume the remaining development responsibilities under the concession agreement. These include the construction of the internal infrastructure of the North Free Zone, the submission of a five -year business plan and the quickly operationalization of value -added services on the port.
Chinese experts visited Gwadar in July from last year to tackle bottlenecks. They have identified poor connectivity, inadequate public services and commercial obstacles as major problems. They recognized Pakistan’s efforts in the past year to accelerate operations, including regulatory approvals, support for transhipment and tax exemptions.
Chinese officials have recognized Pakistan measures in the past year to accelerate the operationalization of the port of Gwadar and the free zone, including regulatory approvals, support for transhipment and tax exemptions, according to sources.
Pakistan is committed to sending 60% of all cargoes in the public sector via Gwadar. It facilitated Afghan public transport trade, granted up to 50% of export products to be used in currencies and withdrawn the minimum rolling tax. However, China has asked Pakistan to further increase the share of public sector goods beyond the 60% contained, sources said.
Officials have indicated that electricity and water supply infrastructures are now complete for free areas in the North and South. These areas are linked to the national grid via the Gwadar grid. A desalination plant producing 1.2 million gallons per day is fully operational, with two dedicated water supply lines placed at the door of the free zone of North.
