Islamabad:
Pakistan has called on Chinese operators in Gwadar Port and its free zone to fulfill their contractual obligations by submitting a time-tied business plan for industrialization aimed at making the jewel of the China Pakistani economic corridor (CPEC) fully operational.
The question of delays in the fulfillment of the Concession Agreement’s obligations from China Overseas Port Holding Company (COPHC) was raised during a meeting in CPEC Joint Working Group at Gwadar. The session took place more than a month before Prime Minister Shehbaz Sharif’s scheduled visit to China for the Shanghai Cooperation Organization (SCO) summit.
According to government sources, Chinese officials were informed that Pakistan was still waiting for a comprehensive Gwadar Free Zone business plan. Islamabad asked for investment plan, performance indicators and operational forecasts to guide industrialization.
Pakistan emphasized urging to complete design, financing, construction, operation and maintenance of North Free Zone. They called for a clear, time -bound implementation strategy to transform Gwadar into a competitive transformation nap and regional transit port, the Ministry of Planning Authorities said.
In August 2021, Express Pakinomist reported that the CPEC cabinet committee had found the Chinese Marketing Plan for Gwadar Port unsatisfactory. The case has been unresolved, although other projects, such as the international airport, allied services and the first phase of Eastbay Expressway, have emerged.
Pakistan urged COPHC to fully utilize the port by fully developing a ship-refugeing facility, LPG terminal and tank for ship systems. Officials noted that Gwadar Port and its free zone remain under -priesting due to several questions. They called for an investment and marketing plan with clear timelines and road shows to attract strategic Chinese investors and industries, sources added.
Chinese representatives opposed the port that the port needs more resources for sustainable operations. They suggested to increase shipping routes, policy support and transit trading and redirect part of the Karachi Port’s cargo to Gwadar.
Pakistan has already implemented supportive policies for operationalization of the port, but COPHC has not prioritized North Free Zone’s development and industrialization. During the meeting, the authorities in Gwadar Harbor pressed for accelerated construction of roads, water and power infrastructure in the northern free zone.
To make the port financially viable, Pakistan has drawn the requirement for bank guarantee requirements for Afghan transitgur. It has also given exceptions to export policy to potential Chinese investors, allowing the export of potassium sulfate.
According to the new regulation notified by the Ministry of Commerce, two Chinese companies, the AGVEN Private Limited and Hangeng Trade Company Private Limited, have been allowed to export fertilizer.
Authorities believe that the build-up of breakwatering and excavation areas will require significant means. These investments would not be viable without first speeding up transmission operations, shipping runoff and business activity.
Some progress has been made elsewhere. Feasibility studies for Gwadar Railway Link and the second phase of Eastbay Expressway, a 13.5 km project, were completed last December. The end of the second phase of this project will improve the connection between Port and Gwadar International Airport. Pakistan has proposed to sign the framework agreement for this phase either during the Prime Minister’s visit or at the 14th joint cooperation committee meeting. Negotiations with China are scheduled to secure grants for the Eastbay Expressway project.
Islamabad also called for Beijing to meet the remaining development responsibility under the concession agreement. These include building the internal infrastructure of the North Free Zone, submitting a five-year business plan and rapidly operationally port-based value-added services.
Chinese experts visited Gwadar last July to tackle bottlenecks. They identified poor connection, inadequate utilities and trading barriers as major problems. The acclaimed Pakistan’s efforts in the past year to accelerate operations, including regulatory approvals, support for transformation and tax exemptions.
Chinese officials recognized Pakistan’s measures in the past year to accelerate the operationalization of Gwadar Port and the free zone, including regulatory approvals, support for transformation and tax exemptions, the sources say.
Pakistan has committed to direct 60% of all public sector’s cargo through Gwadar. It has relieved Afghan transit trade, allowed up to 50% of the export proceeds to be used in foreign currency and withdrawn the minimum tax. However, China has asked Pakistan to further increase the public sector’s freight share in addition to the agreed 60%, sources said.
Officials reported that infrastructure for electricity and water supply is now complete for both the northern and southern free zones. These zones are connected to the national grid via the Gwadar network. A desalination system that produces 1.2 million gallon per day. Day, is fully operational, with two dedicated water supply lines added to North Free Zone’s door step.
