Chinese Firm Will Run Strategic Pakistani Port at Gwadar

The minister, Qamar Zaman Kaira, said that control of the port at Gwadar, near Pakistan’s border with Iran, would pass from the Port of Singapore Authority to a company he identified as China Overseas Port Holdings, in a move that had been anticipated for some time.

Mr. Kaira said the Chinese company would inject money into the Gwadar port, which has failed to meet the lofty goals set by the military ruler Gen. Pervez Musharraf on its completion in late 2006 and now lies largely unused.

“We hope that the Chinese company will invest to make the port operational,” Mr. Kaira said, according to Reuters.

A spokesman for the Singaporean company declined to comment, as did the Chinese government. However, at a news briefing in Beijing on Thursday, a Foreign Ministry spokesman noted that China would “actively support anything that is beneficial to the China-Pakistan friendship.”

The fate of Gwadar, once billed as Pakistan’s answer to the bustling port city of Dubai, United Arab Emirates, has been a focus of speculation about China’s military and economic ambitions in South Asia for the past decade. Some American strategists have described it as the westernmost link in the “string of pearls,” a line of China-friendly ports stretching from mainland China to the Persian Gulf, that could ultimately ease expansion by the Chinese Navy in the region. Gwadar is close to the Strait of Hormuz, an important oil-shipping lane.

But other analysts note that Gwadar is many years from reaching its potential, and they suggest that fears of creeping Chinese influence might be overblown. “There may be a strategic dimension to this, where the Chinese want to mark their presence in an important part of the world,” said Hasan Karrar, an assistant professor of Asian history at the Lahore University of Management Sciences, referring to the management transfer at Gwadar. “But I wouldn’t go so far as saying this implies a military projection in the region.”

The supply lines for the American-led coalition forces in Afghanistan mainly pass through ports farther east in Pakistan and do not involve Gwadar.

Of greater likely concern to Washington was another announcement Pakistan made on Wednesday, saying that it was pressing ahead with a joint energy project with Iran that the United States strongly opposes.

Mr. Kaira said the cabinet had approved an Iranian offer to partly finance the 490-mile-long Pakistan segment of a planned gas pipeline between the two countries. Last year, Secretary of State Hillary Rodham Clinton warned that the project could lead to possible sanctions against Pakistan.

But political analysts in Pakistan saw the announcement as part of Pakistani election politics, and there is wider skepticism that Pakistan can bring the $1.6 billion project to completion. At present Pakistan is suffering from a major energy crisis, including a severe gas shortage that has caused lengthy lines outside fuel stations.

The gas pipeline, which enjoys broad public support, represents positive news for the government of President Asif Ali Zardari before it dissolves in preparation for elections that are expected to take place in May. And although Iran has offered a $500 million finance deal to help Pakistan build its part of the pipeline, Western officials say the Zardari government will still struggle to meet its part of the deal.

Both the Gwadar port and the pipeline to Iran offer the potential of reducing Pakistan’s strategic dependence on the United States, but as yet have failed to deliver.

Commissioned by General Musharraf, the Gwadar port project initially set off a flurry of excited property speculation in what was once a quiet fishing village. Developers presented flashy plans for luxury apartment blocks amid talk the port could rival Dubai.

China paid for 75 percent of the $248 million construction costs, while the Port of Singapore Authority won a 40-year contract to manage the facility, which started in early 2007. General Musharraf assuaged critics of the Chinese involvement by saying the port would not be put to any military use.

But Pakistan has failed to build the port or transportation infrastructure needed to develop the port, the property bubble has burst and, according to the port management Web site, the last ship to dock there arrived in November. “The government never built the infrastructure that the port needed — roads, rail or storage depots,” said Khurram Husain, a freelance business journalist. “Why would any shipping company come to the port if it has no service to offer?”

According to reports in the Pakistani news media, the Port of Singapore Authority sought to withdraw from the management contract after the Pakistani government failed to hand over land needed to develop the facility.

Mr. Kaira said Wednesday that both the Singaporean and Chinese companies had agreed to transfer the contract for control of the port, but he did not give a timetable.

Bree Feng contributed research from Beijing.

Article source: http://www.nytimes.com/2013/02/01/world/asia/chinese-firm-will-run-strategic-pakistani-port-at-gwadar.html?partner=rss&emc=rss