Islamabad:
Pakistan has urged the Chinese operators of the port of Gwadar and their free zone to fulfill their contractual obligations presenting a business plan for industrialization, with the aim of making the jewel of the Chinese-Pakistan economic corridor (CPEC) (CPEC) completely operational.
The issue of delays to comply with the commitments of the China Concession Agreement Overseas Port Holding Company (COPHC) was raised during a meeting of the Joint Working Group of CPEC in GWADAR. The session took place more than a month before the scheduled visit of Prime Minister Shehbaz Sharif to China for the Shanghai Cooperation Organization (SCO).
According to government sources, Chinese officials were informed that Pakistan was still waiting for a comprehensive business plan for Gwadar’s free zone. Islamabad requested the investment schedule, performance indicators and operational forecasts to guide industrialization.
Pakistan emphasized the urgency of finishing the design, financing, construction, operation and maintenance of the Northern Free Zone. They requested a clear and limited implementation strategy for the time to transform Gwadar into a competitive transhipment center and a regional traffic link, the Ministry of Planning Authorities said.
In August 2021, the Express PAkGazette reported that the CPEC Cabinet Committee had found the Chinese marketing plan for the port of dissatisfactory Gwadar. The matter has remained unsolved, although other projects, such as the International Airport, Allied Services and the first phase of the Eastbay Highway, have progressed.
Pakistan urged Cophc to completely use the port by developing a boat reinforcement, a LPG terminal and subsidizing operations of shipping fuel. The authorities indicated that the port of Gwadar and its free zone remain low performance due to multiple problems. They requested an investment and marketing plan with clear deadlines and roads to attract strategic Chinese investors and industries, added Fuentes.
Chinese representatives responded that the port needs more resources for sustainable operations. They proposed to increase shipping routes, policy support and traffic trade, and divert part of the charge of the port of Karachi to Gwadar.
Pakistan has already implemented support policies to operationalize the port, however, CothC has not prioritized the development and industrialization of the Northern Free Zone. During the meeting, Gwadar’s port authorities pressed the accelerated construction of roads, water and energy infrastructure in the Northern Free Zone.
In order for the port to be economically viable, Pakistan has withdrawn the bank guarantee requirement for Afghan traffic load. It has also granted exemptions from the order of the export policy to possible Chinese investors, which allows the export of potassium sulfate.
According to the new regulation notified by the Ministry of Commerce, two Chinese companies, Agven Private Limited and Hannng Trade Company Private Limited, have been allowed to export fertilizer.
The authorities believe that building the breakwaters and the dredging bearing areas will require significant funds. These investments would not be viable without first accelerating transford operations, load performance and commercial activity.
Some progress have been made in other places. Viability studies for Gwadar’s rail link and the second phase of the Eastbay highway, a 13.5 km project, were completed in December last year. The completion of the second phase of this project will improve connectivity between the port and the Gwadar International Airport. Pakistan has proposed to sign the framework agreement for this phase, either during the visit of the Prime Minister or at the 14th Meeting of the Joint Cooperation Committee. Negotiations with China are planned to obtain subsidies for the Eastbay expression project.
Islamabad also urged Beijing to comply with the remaining development responsibilities under the concession agreement. These include the construction of the internal infrastructure of the North Free Zone, presenting a five -year business plan and quickly operating the value -based value -based services.
Chinese experts visited Gwadar in July last year to address bottlenecks. They identified poor connectivity, inadequate public services and commercial barriers as important problems. They recognized Pakistan’s efforts during the past year to accelerate operations, including regulatory approvals, transfront support and tax exemptions.
Chinese officials recognized Pakistan’s measures during the past year to accelerate the operationalization of the port of Gwadar and the free zone, including regulatory approvals, support for transfordation and tax exemptions, sources said.
Pakistan has pledged to enruta 60% of the entire public sector burden through Gwadar. He has facilitated Afghan traffic trade, has allowed up to 50% of export income to be used in foreign currency and withdrew the minimum billing tax. However, China has asked Pakistan to increase even more the public sector loading beyond 60%agreed, the sources said.
The authorities reported that the electricity and water supply infrastructure is now complete for the free and south areas. These areas are connected to the national network through the Gwadar grid. A desalination plant that produces 1.2 million gallons per day is in full operation, with two water supply lines dedicated to the door of the free area of the north.
