ISLAMABAD: The Singapore Port Authority (SPA) and its partners —National Logistics Cell and AKD group — have finally been allowed to quit the Gwadar Port’s 40-year management and development contract after the government’s failure to transfer 584 acres of land in adverse possession of Pakistan Navy at the mouth of the port to pave way for its takeover by China.

“We have not been able to meet contractual obligations and resolve land issues. As a result they (SPA and its partners) have gone under duress and we issued them an NOC (no objection certificate) yesterday to give up their (management, operation, maintenance and development) contract,” Ports and Shipping Minister Babar Khan Ghauri told a meeting of the Senate’s Standing Committee on Ports and Shipping on Tuesday.

Sardar Fateh Muhammad Hassani chaired the meeting. “Now the Chinese will take over the Gwadar Port,” he said.

He indicated that China would invest $10 billion to develop the port and manage its operations, but did not go into details about the proposed agreement.

After its development by the Chinese government at a cost of $288 million, Pakistan’s only deep seawater port was handed over to the SPA under a 40-year concession agreement in Feb 2007 for its “management, operations, maintenance and development”.

The NLC and AKD group of Karachi also held smaller shareholding in the agreement, which offered only nine per cent of gross income to the federal and provincial governments.

Mr Ghauri regretted that while many people in the country blamed international players for unrest in Balochistan and competing regional port operators for failing the Gwadar Port, it was ‘shameful’ that a friendly foreign operator had to leave the port because of the navy’s changing positions on vacating the land despite a clear cut decision by the government.

He warned that if the 584-acre plot at Shamba Ismail was not immediately vacated and transferred to the port, even the Chinese would not be able to develop the project as deepwater trans-shipment port.

He said the Chinese had turned down a request to take part in the bidding for operations of the port before the agreement was signed with the SPA joint venture, but now they were interested in the project.

Mr Ghauri said the three services had been allotted about 25,000 acres to vacate the port’s land, but the navy started changing its position. It first sought Rs10 million per acre of land which it had purchased at Rs180 and then demanded an alternative plot of 1,000 acres. It then increased the demand to 1,615 acres and finally to 2,200 acres.

The minister said the demands were not acceptable and the Balochistan government was ready to provide an equal land (584 acres), of which 350 acres of government land was readily available while the remaining would be provided after purchasing it from private owners.

The committee’s chairman Fateh Mohammad Hassani said it was strange that international investors were leaving Balochistan and wondered why nobody was worried about the Chinese taking out white gold from the Saindak Copper-Gold Project by bribing two officials of the Export Processing Zone.

There was no record of the extraction and even their contract had been extended, he said, adding: “I have my reservations about the Chinese.”

Mr Hassani said the provincial government had taken the Tethyan Copper-Gold Company to international arbitration and now the SPA had quit the port after selling their stakes even though “we are bound to provide the required land”.

A navy representative claimed that the SPA quit not because of the land issue. He informed the meeting that the land at Shamba Ismail had been under the control of Pakistan Navy since 1980 and it had been included in the port project without any consultation with the navy.

He said the land was important from a security point of view and its importance had increased after the recent Kamra attack. He said the prime minister had allowed the navy in 2006 to retain the land, but it was ready to vacate it if it was provided 1,000 acres of alternative land free of cost with an opening to the sea.

Balochistan’s senior member revenue informed the committee that the law required the navy to return the land at the rate of Rs180 per acre at which it had acquired 20 years ago because it did not utilise the land for which it was allotted. He said the navy was taking contradictory positions and increasing its demand for the alternative land to 1,615 acres.

A rear admiral informed the meeting that the land had been in the navy’s possession since 1980 and he had written 16 letters to the ports and shipping ministry and the provincial government, but they did not respond.

He was challenged by a representative of the Balochistan government who said the latest meeting on the issue had taken place on April 25, in which the navy demanded 1,615 acres of land.

Mr Ghauri said the armed forces should not behave like “real estate companies” and realised that the land belonged to Pakistan.

Senator Mustafa Kamal said the fiery exchanges made it appear as if two countries were fighting a border dispute. He said no outside forces and agents could be blamed for Gwadar Port’s failure or Balochistan unrest when institutions were bickering over petty issues.

The committee asked the navy, Balochistan government, ports and shipping ministry and coast guards to complete transfer of 350 acres of land to navy in three weeks and hand over Shamba Ismail land to the Gwadar Port. Otherwise, it would see to it that the land in question was surrendered under the land revenue act to the provincial government.