Corridor Calculus

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Corridor Calculus : China Pakistan Economic Corridor & China's Comprador Investment Model in Pakistan 86 Engineering Company (which had built the port). Out of the three, Dubai was pretty much ruled out after it put practically unacceptable conditions 87 before the Government of Pakistan. There was also a suspicion that Dubai wouldn't let Gwadar flourish because it could steal business from its Jebel 88 Ali port. Later, it transpired that the Chinese did not even 'apply' when international tenders were called for operating the port, and, therefore, the decision was taken to hand over the management of the port to PSA for 40 89 years. In February 2007, an agreement was signed with PSA which had undertaken 90 to invest $550 million over five years to develop the port further. The government had earlier agreed to give a 40-year tax exemption on any imports needed to develop the port and also a 20-year tax holiday to 91 corporate income tax from the port. But a year later, not only had a new government led by the PPP assumed office, not a single ship had berthed at 92 the port, ostensibly because of some tariff settlement issues. The first ship came only in March 2008 carrying a shipment of wheat, and it was a huge embarrassment and a terrible advertisement for a port with ambitions to rival Dubai. The depth of the channel — 12.5 metres — did not allow the 93 ship to berth until it discharged its cargo to a smaller ship. The fiasco forced the then Shipping Minister, Qamarruzzaman Kaira, to admit that the port had no road linkage, no rail connectivity and no electricity, and would take 94 three years — 2011 — to become operational. 86 'Three companies in the run for Gwadar port operation', The News International 26/07/2006, see POT Pakistan Series Vol. XXXIV No. 174 pp 34-35 87 'Dubai firm sets tough terms for Gwadar port', Dawn 25/04/2006, see POT Pakistan Series Vol. XXXIV No. 96 pp 30-31 88 Waqar Hamza, 'PSA not adhering to investment plans', Nation 05/03/2010, accessed at http://www.nation.com.pk/pakistannews-newspaper-daily-english-online/Politics/05-Mar-2010/PSA-not-adhering-to-investment-plans/1 89 'Singapore to run Gwadar port', The Post 23/12/2006, see POT Pakistan Series Vol XXXIV No. 300 pp 25-26 90 'Gwadar port handed over to Singapore firm', The News International 07/02/2007, see POT Pakistan Series Vol. XXXV No. 32 pp 29-31 91 'Gwadar becomes duty-free port', The News International 02/02/2007, see POT Pakistan Series Vol. XXXV No. 28 pp 47-48 92 Mir Mohammed Ali Talpur, 'The mega follies', Dawn 31/01/2008, accessed at http://www.dawn.com/news/1070873/dawneditorial-january-31-2008 93 Maqbool Malik, 'Canadian wheat ship causes embarrassing situation', Nation 03/04/2008, see POT Pakistan Series Vol. XXXVI No. 80 pp 49-50 ; Also see Romail Kenneth, 'First shipment at Gwadar still in doldrums', Daily Times 13/03/2008, accessed at http://archives.dailytimes.com.pk/business/13-Mar-2008/first-shipment-at-gwadar-still-in-doldrums 94 'Gwadar port can't be operational before 2011', Daily Times 28/05/2008, accessed at http://archives.dailytimes.com.pk/national/28-May-2008/gwadar-port-can-t-be-operational-before-2011 24
Corridor Calculus : China Pakistan Economic Corridor & China's Comprador Investment Model in Pakistan However, in December 2008, the Gwadar port was declared 'fully functional' when a ship carrying fertilizer docked at the port. The occasion was marked as the 'opening' of the port, even though labour had to be 95 shipped in from Karachi to unload the ship. Incidentally, this was the fourth 96 time the port was being 'opened' in a period of three years. By early 2009, it was increasingly becoming clear that despite government efforts to make 97 the port operational by diverting traffic to it , the Gwadar port as it existed, was unviable, uneconomical and unusable because the necessary 98 infrastructure — roads, rail, port facilities — was not in place. 99 Apart from labour troubles that were affecting port operations , the port operator, PSA, was unable to carry out some of the essential work to develop the port because the land required for it was not being transferred 100 by the Pakistan Navy. The PSA had to be given over 2,200 acres of land to develop a free zone, and out of this 584 acres were in the possession of the Pakistan Navy, which the Ministry of Defence and the navy refused to hand 101 over free of cost. The Ports and Shipping Minister informed the Senate of Pakistan that the land in possession of the navy was required for providing necessary trans-shipment facilities, without which the port would come to a 102 standstill. Towards the end of 2009, a campaign started against PSA. The terms of 95 Saleem Shahid, 'Gwadar port becomes fully functional', Dawn 22/12/2008, accessed at http://www.dawn.com/news/335336/gwadar-port-becomes-fully-functional 96 th 'Gwadar port becomes functional after 4 'opening'', Dawn 23/12/2008, accessed at http://www.dawn.com/news/335362/gwadar-port-becomes-functional-after-4th-opening 97 Waqar Hamza, 'Govt paying subsidy for wheat, urea transportation from Gwadar port', Nation 07/01/2010, accessed at http://nation.com.pk/politics/07-Jan-2010/Govt-paying-subsidy-for-wheat-urea-transportation-from-Gwadar-Port 98 Ahmed Fraz Khan, 'Wheat unloading at Gwadar to cost additional Rs 1.2 bn', Dawn 06/01/2009, accessed at http://www.dawn.com/news/337573/wheat-unloading-at-gwadar-to-cost-additional-rs1-2bn ; Also see Mubarak Zeb Khan, 'Rs585m lost on urea import through Gwadar', Dawn 02/02/2009, accessed at http://www.dawn.com/news/341457/rs585mlost-on-urea-import-through-gwadar 99 'Port Singapore-stevedores tussle: wheat and urea shipments diverted to Karachi port', Business Recorder 27/03/2009, accessed at http://aaj.tv/2009/03/port-singapore-stevedores-tussle-wheat-and-urea-shipments-diverted-to-karachi-port/ 100 Maqbool Malik, 'Gwadar at mercy of PSA, squabbling ministers', Nation 11/09/2009 accessed at http://nation.com.pk/politics/11-Sep-2009/Gwadar-at-mercy-of-PSA--squabbling-ministers 101 'Pakistan Navy demands Rs 7 billion for 584 acre land: MoD refuses to give land for Gwadar Free Zone', Business Recorder 02/02/2009, accessed at http://aaj.tv/2009/02/pakistan-navy-demands-rs-7-billion-for-584-acre-land-mod-refuses-to-giveland-for-gwadar-free-zone/ 102 'Port operations may be affected if navy doesn't vacate land: Ghori', Dawn 29/07/2009, accessed at http://www.dawn.com/news/894735/port-s-operations-may-be-affected-if-navy-doesn-t-vacate-land-ghori 25
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