Pakistan wants PSA out of Gwadar Port

http://www.dawn.com/wps/wcm/connect...ovt-urged-to-scrap-gwadar-port-deal-310-hh-03

Govt urged to scrap Gwadar port deal
By Kalbe Ali
Sunday, 03 Jan, 2010



ISLAMABAD: The Planning Commission’s task force on maritime industry has urged the government to cancel the deal with the Port of Singapore Authority (PSA) to operate the Gwadar port.

According to a presentation before Deputy Chairman of the Planning Commission Sardar Aseff Ahmed Ali, the Gwadar port project is a disaster, as the 40-year concession agreement with the PSA has not yielded any results in its first three years.

“The government and the PSA are in default of commitments. No commercial vessel (has) arrived at Gwadar port in three years and there is no possibility of any (docking there) for many years.”

The task force said the port would be made approachable by road in four years, and a rail link would take between 15 and 20 years.

A rail network that could connect the port with Afghanistan, and through Afghanistan, with Central Asian Republics and China, in addition to cities and towns in Pakistan, was badly needed.

The task force said that goods from 72 ships had been unloaded at the port at a rate of Rs2,000 per ton, which translated into a revenue of about Rs220 million for the PSA.

According to the presentation, the government was to purchase 2,281 acres of land on the waterfront for the PSA. This land was to be given to the port operator for 40 years.

“But purchasing the land does not seem possible because doing so would cost at least Rs15 billion,” said the task force. “And without this land, the PSA is unwilling to invest.”

The PSA had undertaken to spend $525 million in five years, but nothing was spent in the last three years. The PSA was not likely to invest even in the next two years, said the task force.

The concession agreement could be revisited. The best option would be to cancel the agreement, said the task force.

If this happened, a penalty of only $8-10 million would have to be paid. Negotiations with the port operator could be initiated on this issue, said the task force.

The use of three berths at the port was the best alternative, according to the presentation.

Building infrastructure was vital for attracting investments in areas like petroleum storage and refining, oil field-related equipment, construction and fabrication.

The concept of a logistics port should be introduced with appropriate industries, using the only Ro-Ro (roll-on, roll-off) berth in Pakistan, said the task force.

If Gwadar was to be used for government cargos, “trans-shipment to Karachi should be considered”. With the existing berth structure, according to the presentation, there “is no possibility of the … port achieving break even and the government will have to subsidise it for many years”.

The Balochistan government was opposed to the concession agreement with PSA because the Baloch people were not gaining anything from it, said the task force.

The port would not be viable for transshipment or transit until the law and order situation in Afghanistan improved and China was connected via road and rail links with Gwadar, according to the presentation.

The task force pointed out that no facility for supporting the oil industry existed even though the port was on the mouth of Gulf. “Due to this, Pakistan is unable to attract investment in Gwadar from Gulf countries … in the oil and gas sector”.

http://www.dailytimes.com.pk/default.asp?page=2010\01\03\story_3-1-2010_pg5_1

Gwadar Port deal with PSA
Task force recommends govt to cancel deal

* ‘Deal a disaster as it contains 40-year concession with the port operator and only three years have passed’

ISLAMABAD: Planning Commission’s Task Force on Maritime Industry has strongly recommended the government to cancel the Gwadar Port’s operation deal signed with Port of Singapore Authority (SPA).

According to a presentation of the task force, the Gwadar operation deal has been termed a complete disaster as it contains the 40-year concession agreement with the port operator and just three years have passed.

Recommendations prepared by the task force included that the concession agreement can be revisited and the best option would be to cancel the agreement. In this case penalty potential is estimated at only $8 to $10 million which can be negotiated with the port operator. It has also been recommended that viable alternatives for use of three berths at Gwadar be opted.

There must be infrastructure available for attracting investment in petroleum storage, refinery, pipeline, oil filled related equipment, construction fabrication and repair etc. It has also been proposed that only Ro-Ro berth in Pakistan should be used. Logistics port concept should be introduced, with appropriate industries. If the government’s cargos have to come to Gwadar, transshipment to Karachi should be considered.

According to the presentation, both the government and PSA are in default on many counts and are unable to perform their agreement obligations. It has been disclosed in the presentation that no commercial vessel has arrived at Gwadar Port in the last 3 years and apprehensions has been expressed that there is no possibility of arrival of any commercial vessel for many years to come. The Gwadar Port was supposed to be connected by construction of road links and a timeframe of four years after reaching port operation agreement. Gwadar Port is also to be connected through establishment of rail network with the rest of the country as well as with neighboring countries especially Afghanistan, and through Afghanistan to Central Asian Republics (CARs) as well as China. According to the presentation, Gwadar Port rail connectivity would take some 10-15 years to complete.

Till date, some 72 ships brought government cargo via Gwadar Port and the federal government had to subsidise such imports by giving subsidy to the tune of Rs 2,000 per tonne. Apart from subsidising cargo imports, the government has also paid PSA Rs 220 million as subsidy.

The presentation revealed that under Gwadar Port operation agreement the federal government is required to purchase 2281 acres of land on water front and transfer this land free of cost to PSA for 40 years. Subsequently, PSA would be able to lease out 2281 acres of land on water front for 99 years.

Apprehension has been expressed that there is no possibility of land purchase in the near future and the cost of land that the federal government would be required to pay is estimated at Rs 15 billion.

On the other hand, without getting free of cost land PSA is unwilling to make further investment in Gwadar Port, as PSA had earlier committed for making investment to the tune of $525 million in five years. PSA has not invested during the first three years, and it is not likely to spend any during the next 2-year period, the presentation stated. It has been disclosed that with present berths there is no possibility of Gwadar Port Authority achieving breaking and the government will have to subsidise GPA for many years to come. On the political side, it has been stated that Balochistan government has strongly opposed to the present Gwadar Port Concession Agreement with PSA as the Baloch people are not gaining anything from it. The presentation further disclosed that Gwadar Port is not viable for transshipment, as well as not for transit until political and law and order situation in Afghanistan stabilises and Western China is connected by road and rail with Gwadar. staff report

If PSA put in a single cent into Pakistan, they will be the laughing stock of the world. It is not just whether there are traffic from Pakistan. All containers from Pakistan will be put apart to check for terrorists before being allowed into any country.

FuckSamLeong said:

Let's wait for the Singapore Government's side of the story.

Click to expand...

My side of the story is (of coz with the help of my daughter-in-law HO CHING); anything that can make money I am not interested; but anything that I can lose a lot of money; I am VERY INTERESTED ah!!!

Get it ah???