ISLAMABAD, Jan 3: The government is likely to import 600,000 tons of wheat at Gwadar Port after having received an offer from Singapore Port Authority (SPA) to charge concessional rates for handling the transaction.

The government plans to import wheat within this month to help meet the growing shortage of the commodity across Pakistan.

Official sources told Dawn that SPA, the operators of Gwadar Deep Sea Port, wanted to make the port fully operational by handling the huge quantity of wheat at concessional rates viz-a- viz other ports of the country.

The government was told that although the SPA had started handling ships and vessels at Gwadar, it would be good for the country if it handled “transshipment” like that of the import of 600,000 tons of wheat.

Tenders for importing wheat has just been floated by the government.

When contacted, director-general Gwadar Port Authority Ahmad Bukhsh Lehri confirmed that the operators of the Gwadar Port have offered to charge concessional rates for the import of wheat.

He also said interest of the foreign investors was increasing in the region after the port was inaugurated last year.

He said China had expressed its readiness to connect Gwadar port with Sinkiang and develop a corridor for oil as Gwadar was fast becoming the hub of economic activities.

A Chinese company, he said, had also entered an agreement to set up a steel mill in Gwadar.

Responding to a question, Mr Lehri said a survey for laying a railway line had been completed, while 50 beds hospital had already been established at Gwadar. Over 25 banks have opened their branches in Gwadar while more hotels were being opened there, he added. Movement on the coastal highway, he said, was also increasing after its repair. It was hit by floods in 2005.

He said that Gwadar would be connected with other provinces through a network of railway tracks which would be laid along with carpeted roads.

To a question, he said that the PSA had overcome its major problems by having three berths which have successfully started handing the arriving ships at Gwadar port.

Over 20-year tax exemptions had been given to SPA while a 15-year tax holiday in the proposed Export Processing Zone (EPZ) near Gwadar port was also expected to further help attract local and foreign investment there. There would be tax exemption on customs, sales tax and excise duty in the EPZ with a view to promote substantial investment in Gwadar.

Sources said a number of foreign investors have shown interest to establish mega refineries, building storage capacity and undertaking other businesses in Gwadar to help expedite the process of industrialisation in Balochistan.

With the completion of both the phases of Gwadar port, a Special Industrial Development Zone (SIDZ) with an area of 4,000 hectares has also been proposed for setting up various industries. The SIDZ is located on the north of Gwadar town at a distance of about 30 km from the port.

Sources said foreign vessels could come and unload their goods at Gwadar whose first phase of the construction has finished at an upwardly revised cost of $298 million.

The additional funding had been provided by the federal government to install the required equipment, complete the civil work and build roads linking the port with Quetta and other upcoming areas.

The Chinese side had completed its work while the local authorities finished the development of infrastructure, including the building of a road from Gwadar to Karachi.

The second phase of the project is expected to be undertaken in early 2008 at a cost of $865 million and will be completed by 2010.

Phase-1 was built by the public sector with the Chinese assistance and included three multipurpose berths (602m quay length, one service berth (100m length), 4.35 km navigable channel (11.6/12.5m deep), roads, plinths and transit shed, operational craft and equipment, including navigational aids and shore based port buildings and allied facilities.

Concerned officials said completion of phase-2 would help meet strategic needs and standby facility to Port Qasim and Karachi Port in case of emergencies arising out of any mishaps.

The construction of phase-2 would be completed on the basis of Built Operate Own (BOO) and Built Operate Transfer (BOT) basis. However, if the private sector did not respond favourably, public sector financing would be required to develop phase-2 of the port.

The port would generate foreign exchange earning as the vessels registered under foreign flags are required to pay some portion of charges in foreign exchange through their local agents for cargoes.

The amount of foreign exchange earned would not be reflected in Gwadar Port account, but would contribute to national foreign exchange earnings.

At the present rate of Karachi Port Trust (KPT) Tariff, the foreign exchange percentage is estimated at 33 per cent of the charges payable to port authorities.

Officials said that Gwadar had an edge over Port Salalah of Oman and Iran’s proposed up-gradation of Port Chah Bahar. However, Gwadar would have to compete with both the foreign ports.

Gwadar is expected to serve as mother port at the strategic location opposite to Straits of Hormuz and on the mouth of Persian Gulf and provide port, warehousing, transshipment and industrial facilities for trade with over 20 countries including Gulf states, Central Asian Republics (CAR), Iran, East Africa, Red-Sea countries and North West parts of peoples Republic of China and India.