Pakistan to transfer Gwadar port's management to China

Pakistan will transfer the management of the strategically located Gwadar port from Singapore to China.

Analysts said the move aims to give a badly needed boost to bilateral trade and regional development and does not target any country.

Because Singapore's PSA International has not developed the deep-sea port on the Arabian Sea "as desired", Pakistan's Cabinet agreed to transfer the port's management to Chinese Overseas Port Holdings Ltd, Information Minister Qamar Zaman Kaira told reporters in Islamabad on Wednesday.

"We hope that the Chinese company will invest to make the port operations help Pakistan support its economy," said the minister, adding that both companies have finalized the deal and that the transfer will happen soon.

Beijing on Thursday underlined its support to the development of the neighboring country, saying that Chinese companies have been engaging in international programs in many sectors.

"China will actively support any program that benefits China-Pakistan relations and the prosperity of Pakistan," Foreign Ministry spokesman Hong Lei said at a regular news conference.

China provided about 75 percent of the initial $250 million in funding for the construction of the port in Pakistan's southwestern Baluchistan, a province dogged by security problems.

Meanwhile, Kaira also said that Islamabad would be "more grateful to the Chinese government if a naval base was being constructed at Gwadar for Pakistan". China's Foreign Ministry said it was unaware of any such request, according to AFP.

The port is close to the Pakistan-Iran border and the Strait of Hormuz. About 60 percent of China's energy requirements are shipped through the strait.

Wang Weihua, a researcher on South Asia at the Shanghai Institutes for International Studies, said the Gwadar project as a port, and not as a naval base, may provide supplies for Chinese merchant ships and escort vessels, as well as serving China's energy interests in the Middle East.

He said that the transfer of the port management does not represent a threat to any country.

Meanwhile, Chinese investment can help Islamabad to better develop the Baluchistan province and help boost Islamabad's influence in the Muslim world, said Wang.

The sparsely populated province is rich in natural resources, but violence, sectarianism and separatist insurgencies have stymied its development and probably the Singaporean company's business, observers said.

According to PSA's Gwadar website, no ship has called on the port since November.

Pakistan expects the port to be a hub for trade and economic activities in the region, to enable high-volume cargo to and from landlocked Central Asian states, and to create jobs for impoverished local people, Indian newspaper Dawn reported.

Liu Xiaoxue, a researcher on South Asia at the Chinese Academy of Social Sciences, said the port can stimulate the development of the bilateral free trade agreement, which was signed in 2006 but has not achieved as much as Islamabad expected.

"Still, it's a little early to talk about the energy corridor as the cost of land energy transportation and risk of insecurity is still higher than maritime transportation," Liu said.

AFP contributed to this story.