ISLAMABAD: The development of Gwadar and its free zone is marred by a host of obstacles and the centre-piece of China-Pakistan Economic Corridor has yet to show even its first glimmer of the promised industrial hub – reveals findings of an official report.
The report – commissioned by the Cabinet Committee on the CPEC –has recommended revisiting the Port Concessions Agreement with Chinese operators aimed at addressing some of the major obstacles to the development of Gwadar. Gwadar is also described as the crown of the CPEC.
“Long being marketed as the center-piece of the CPEC, Gwadar has yet to reach the heights of expected industrial development that can serve as catalyst for domestic and foreign investment,” said the official assessment by the Board of Investment. The Gwadar “has yet to even show its first glimmer of the promised industrial hub that can serve as a catalyst for domestic and foreign investment”, revealed the findings of the report. The assessment also showed that although Pakistan had extended a lucrative incentive package, the lack of investment interest in Gwadar Free Zone was “inexplicable”. The report had also been submitted to the Prime Minister’s Office in June this year along with a set of recommendations to correct the wrongdoings.
The key recommendation of the report is that the government should revise the Concession Agreement with China but the Prime Minister Office did not agree to it due to its overarching implications for Pak-China economic relations.
The development of Gwadar Free Zone relies heavily on its Concessions Agreement which does not envisage any role for the federal entities that have been mandated with economic and investment policy making, according to the report.
It added the exclusion of federal stakeholders, which are in a position to regulate and expedite the development of this zone, and provision of authority solely to the Gwadar Port Authority to act on behalf of the federal government has made the Concessions Agreement limited in its scope and applicability. In November 2015, the China Overseas Port Holdings Company Limited (COPHCL) finalised a new 40-year lease of the Gwadar Port. Under the agreement, the port operators get 91% of port revenue and 9% goes to the federal government.
The lower than expected progress on the Gwadar Port and its Free Zone has raised many questions given the fact that it was the top priority of Prime Minister Imran Khan and Chief of Army Staff General Qamar Bajwa.
The Chinese operators of the Gwadar port – the China Overseas Ports Holding Company Pakistan Limited (COPHC) had recently made a presentation on the prospects of the Gwadar port and its marketing plan to the CPEC cabinet committee, which too was below the cabinet body’s expectations. –Agencies
