November 28, 2017
Published in Economy
BEIJING: The Chinese company that is developing the Gwadar Port and the Gwadar Free Zone has said it has fully considered the interests of Pakistani side and has also agreed to share revenues from those projects although it wasn’t originally required to do so.
An employee from the China Overseas Ports Holding Co (COPHC) told the Chinese newspaper ‘Global Times’ that the company had agreed to turn over nine percent of the revenues from the Gwadar Port as well as 15 percent of the revenues from the Gwadar Free Zone to the Pakistani side.
The employee, who spoke on condition of anonymity, was responding to some media reports that 91 percent of the revenues from the Gwadar Port, which is part of the China-Pakistan Economic Corridor (CPEC) belong to China, and the Gwadar Port Authority would only get nine percent for the next 40 years.
The COPHC employee said that common international rules regarding build-operate-transfer (BOT) projects do not require the operator to share any revenue from the projects during the investment and operation period with the eventual owner.
“Since taking over command of the Gwadar Port and Gwadar Free Zone, COPHC has invested a huge amount of capital (US$270 million as of now).
But the company still faces large losses because the infrastructure, including roads, water and electricity weren’t put in place,” the COPHC employee said.
“At present, the operation of the Gwadar Port and Gwadar Free Zone is quite difficult and needs huge investment. Thus, we hope that a sound external environment is created for Chinese companies to support them fully in the development and operation of the Gwadar Port,” he continued.
The contract for construction and operation of Gwadar Port was signed between the Pakistani government and a Singapore company. But during an eight-year period, the Singapore side didn’t make any investment. As a result, the port didn’t start commercial operation. -APP