Pakistan’s Gwadar port leased to China Overseas Port Holding Company for 40 years

The Pakistan Government in April 2017 leased the operations of its strategic Gwadar port to the China Overseas Port Holding Company (COPHC) for a period of 40 years. COPHC is a State-run Chinese firm.

The China Overseas Port Holding Company is slated to carry out all the developmental work on the port situated in the Balochistan province of Pakistan. The company took over the operations of the port in 2013.

As per the contract COPHC has 91% share of revenue collection from gross revenue of terminal and marine operations and 85% share from gross revenue of free zone operation. The provinces will not be given any share in the revenue collection.

Before COPHC, the control of the Gwadar port was with Singapore’s Port of Singapore Authority (PSA) International.

How it will help China?

China can use the port to transport fuel into northwestern China. It will transporting oil and gas from the port through pipelines that traverse Balochistan and the federal agencies to feed into China’s Xinjiang province.

As the nation’s oil imports increase, it would prefer to insulate its energy transports from the troubled waters of the Straits of Malacca and the South China Sea.

A strong presence around the Gwadar Port would change the security dynamics for China. The move will strengthen China’s objective to have an ideal staging ground for its ships.

However, handling operations of Gwadar port will be not easy for due to the worsening security situation in Balochistan opposition from Baloch people. In addition, turbulence in Afghanistan is also likely to affect it.

About Gwadar port

• The Gwadar Port is a warm-water, deep-sea port situated on the Arabian Sea at Gwadar in Balochistan province of Pakistan.

• The port features notably in the China–Pakistan Economic Corridor plan.

• The port is considered to be a vital link between the ambitious One Belt, One Road and Maritime Silk Road projects.

• The port’s potential to be a deep water sea port was first noted in 1954.

• Plan for construction of the port were not realised until 2007, when the port was inaugurated by Parvez Musharraf after four years of construction, at a cost of 248 million US dollars.

• In 2015, it was announced that the city and port would be further developed under CPEC at a cost of 1.62 billion US dollars.

• The port will also be the site of a floating liquefied natural gas facility that will be built as part of the larger 2.5 billion US dollar Gwadar-Nawabshah segment of the Iran–Pakistan gas pipeline project.

• In late 2015, the port was officially leased to China for 43 years, until 2059.