News / Asia

Pakistani Handover of Gwadar Port to Beijing Draws Scrutiny

Pakistani Handover of Gwadar Port to Beijing Draws Scrutinyi
February 25, 2013 10:03 PM
Pakistan recently handed over management of its strategic deepwater Gwadar seaport to China. Both countries insist the deal is a “purely commercial venture.” But critics and financial analysts are skeptical about the remote port's economic viability and believe it will be used for military purposes. Ayaz Gul reports from Islamabad.
Ayaz Gul
Pakistan recently handed over management of its strategic deepwater Gwadar seaport to China. Both countries insist the deal is a “purely commercial venture.” But critics and financial analysts are skeptical about the remote port's economic viability and believe it will be used for military purposes.

The Gwadar port lies near the Strait of Hormuz, gateway for about 20 percent of the world’s oil. Beijing provided most of the port's initial $250 million construction cost, as part of a plan to establish a trade and energy corridor from the Gulf, through Pakistan and on to western China.

Since it was first handed over to a Singaporean operator in 2007, however, the isolated facility has been a commercial failure. Baluchistan's ongoing instability and local political opposition are largely responsible.

But Pakistani authorities blamed the Singaporean operator and decided to transfer control to a state-run Chinese company. President Asif Ali Zardari oversaw the signing ceremony in Islamabad.

“The award of this contract opens new opportunities for our people, particularly for the people of Baluchistan. It gives new impetus to Pakistan-China relations. It takes a step further our political cooperation into the realm of economic cooperation,” said Zardari.

Supporters of the deal, such as director of the privately-run Strategic Studies Institute, Fazal-ur Rehman, hope the Chinese intervention will speed up the critical improvements still needed at the port.

“It is still an ongoing project. It is not complete. So, by bringing in China means that we can ensure investment on the infrastructure, we can ensure investment on the up gradation and completion of the project,” said Rehman.

Many critics in Pakistan remain skeptical that anyone will be able to make Gwadar economically viable, given the instability and poverty of surrounding Baluchistan province. They say just building the road and rail links to the port could take years - if they are ever built at all.

Ishaq Baloch, a senior nationalist leader in Baluchistan, said federal authorities never consulted with local officials on the deal with China.

“When you will not give the sense of ownership to the native people, they will oppose the mega projects. They will oppose such economic activities if they are not getting benefit from them, and we have a very bitter experience about [previous projects run by] China [in Baluchistan]" said Baloch.

Independent analysts, like former ambassador Arif Ayub, say Pakistani policy makers long have warned about the challenges of developing the Gwadar port. He said handing control to China may not yield any economic benefits.

“It is purely a white elephant [expensive business venture without value], which we are trying to wash our hands of,” said Ayub.

In India, officials have called China's role in the port “a matter of concern” because of suspicions it will be used by the Chinese Navy.

“We try to maintain a balance in our country and there is a need to take steps to maintain this balance between India and China on this [Gwadar port] issue,” said Indian Foreign Minister Salman Khurshid.

Pakistan foreign ministry spokesman Moazam Ahmed Khan dismisses such concerns and insists the port remains a viable business opportunity, despite its challenges.

“I think we should only look at this venture as an economic and commercial venture solely focused on improving development of the area helping Chinese good[s] reach other markets, getting China a shortest route for its energy supplies,” said Khan.

If successful, the Gwadar port could be a key piece of China's growing energy infrastructure, cutting by half the distance between China's western provinces and the sea.

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Comment Sorting
by: Asad Khan from: Hyderabad
February 28, 2013 3:55 AM
The Participation of China in Gwadar will bring prosperity and socio economic uplift of the whole western region of Pakistan.
Pakistan in the past manage Balochistan province through different tribal leaders (Sardars) which was not a wise policy because these tribal leaders lacks vision and they are very clannish in nature. Now, due to emergence of youth and fresh ideas Balochistan showing signs of change and forwardness.

Although Karachi Port has got excellent facilities and it handles 90% of the maritime traffic of the whole Pakistan but it is already choked and 250+ Nautical Miles Eastward from Gwadar. So, the issue here is capacity and infrastructure building and Gwadar offers best of the two.

And all this ‘China taking over’ and ‘strings of pearls’ are just non-sense and lacks analytical approach. The World at large and this region in particular needs trade, development & peace. The two super powers (USSR in Past and USA current) brought nothing but war & destruction.
In Response

by: Asad Khan from: Hyderabad
March 01, 2013 8:28 AM
@ Malek Towghi/Tauqee

Sir, pardon any disrespect, the doctrine of yours defies common sense. Thx.
In Response

by: Malek Towghi/Tauqee, Ph.D from: USA
February 28, 2013 1:08 PM
A country that cannot manage a port that it claims to be its own does not have the right to exist. Pakistan is doomed to disintegrate. Sooner or later, Pakistan-occupied Balochistan will be free. Dr. Malek Towghi, Liaison, Baloch Human Rights International

by: Malek Towghi, Ph.D. from: USA
February 25, 2013 7:01 PM
With China well-established in Gwadar, Pakistan-occupied Balochistan, all of our efforts to protect our interests in the Far East /South East Asia will be neutralized. Only a revision in the West's trade policies concerning China -- a drastic decrease of imports from China -- may be somewhat effective.
In Response

by: Doda Malook from: Balochistan
March 02, 2013 7:42 AM
Distortion of historical fact: 'constitutional part'.......!!!!?. Is somebody talking of that constitution of Pakistan, for which the reps. from Balochistan refused to be signatories??????
For sure, after loosing the safe-evens in Afghanistan for its anti-human terrorist networks and their trafficking to destabilize regional peace, Pakistan enforces its presence on the occupied territory of Balochistan. This time it is bribing China and Iran, by selling out Baloch coast (Gwadar Deep-Sea Port) and Baloch territory (for lying IP gas pipeline), respectively, to ensure that no factor within and outside may stop ISI to create safe-evens for terrorist groups like Al-Qaida, Talibans, LeJ, etc. in and arround the mountains and desserts of Chagai, Kharan, Washuk, and Mekran. Appeal to the peace loving people, states, and governments of the world: If you want that no terrorist plans are made in such terrorist camps and implemented in your towns and cities, then strongly oppose these two so-called "economic" and "commercial" projects of Pakistani state. Remember only a free, democratic, and liberal Balochistan, after withdrawal from Afghanistan, may stop establishing new terrorist networks, and export of killers and bombers from this part of the world.
I am pretty sure that soon the world is going to hear about an Atomic Blast experiment carried-out by Iran in collaboration with Pakistan and China.......and the place would be none, but the territory of occupied Balochistan........catchment/project areas of the pipeline and the port. God save the humanity.
In Response

by: Hassan Hakeem from: Islamabad
February 28, 2013 3:57 AM
Firstly, Baluchistan is a constitutional part of Pakistan; not an occupied territory (although Baloch nationalists do not accept the state's writ, there are evidence of such movements being foreign funded). As for China Overseas Port Holdings taking over the Gwadar port, the agreement is to enhance the bilateral relations between Pakistn and China plus an opportunity to lift the economic viability of the port. It is, not in any sense, to neutralize West's interests in the region.

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