KARACHI, Dec 9: The Port of Singapore Authority International (PSAI), with the consortium of AKD Securities, has been selected by the Gwadar Port Implementation Authority (GPIA) for holding negotiations with them as port operators for the Gwadar port.

A draft Letter of Interest (LoI) has been forwarded to the Ministry of Port and Shipping by the GPIA for their final approval.

Official sources in Islamabad told Dawn on telephone that the board meeting of GPIA held on Friday unanimously gave their consent for selection of PSAI and a committee has been set up to hold negotiations with the port operators after getting ministry’s approval.

However, a consortium of Pakistan International Container Terminal (PICT) and Jahangir Siddiqui has been declared runner-up. While two other participants – Dubai DP World and Globe Marine Services of Saudi Arabia -- did not participate in the bidding which took place on Dec 4.The selection has been made after evaluation of financial strength and strategic partnership of the consortiums which participated in the bidding process and submitted their offers to the GPIA.

Since the selection of the port operator is being made on Gross Revenue Sharing (GRS) formula and not on royalty basis as had been in the case of Karachi Port and Port Qasim, the concession winner will have to set up three different companies to look after various activities at the port.

Sources said there would be three major activities at the Gwadar port which include cargo operation, marine operation and free economic zone.

Despite the fact that four companies were pre-qualified by the GPIA, only two turned up on Dec 4, the final date fixed for submitting bids. However, the financial strength of the PS Authority International is beyond doubts, having $12 billion worth with a performance record of over 40 million boxes per annum.

The first multi-purpose terminal at Gwadar has been completed with a quay length of 600 meters and a depth of 14.5 meters, with a sizeable back-up area, and cranes, other terminal equipment and tugs have been acquired.

The government has already declared Gwadar port as petrochemical and POL storage field and is seeking $12.5 billion investment from China.

However, port and shipping experts are of a strong view that the Gwadar Port be handled very cautiously as it was a totally different ball game and unlike KPT and PQA who thrive on captive cargoes, it would have to totally depend on trans-shipment cargo which would mean to compete internationally.

The port will not only have to be efficient and well-equipped, but it would also have to be competitive to have its rightful share in the world cargo. The experts also suggested that the Gwadar port should also be made duty-free and all federal and provincial taxes be exempted for a long period of 20 to 25 years.