Gwadar Port Agreement: An Overview
Gwadar Port, located on the south-western coast of Pakistan, is surrounded by one of the world`s most strategic and commercial sea-lanes. Gwadar port`s location makes it an important trade route that connects South and Central Asia, Africa, and the Middle East with China. In recent years, Gwadar port has gained significant attention due to its strategic location, which has led to the development of the China-Pakistan Economic Corridor (CPEC).
The Gwadar Port agreement was signed in 2007 between the Port of Singapore Authority International (PSA) and the Gwadar Port Authority (GPA). The agreement between the two parties aimed to develop the port infrastructure and turn Gwadar into a deep-sea port.
The PSA`s expertise and experience in operating and managing ports worldwide, as well as its financial strength, allowed the Gwadar Port Authority to entrust the PSA with the development and operation of Gwadar Port. The PSA won the contract to operate the port for 40 years, with the option to extend it for an additional ten years.
As per the terms of the agreement, the PSA was responsible for the development and management of port operations and infrastructure. The PSA invested $550 million in the first phase of the project, which included the construction of three multi-purpose berths, a breakwater, and other supporting infrastructure.
The agreement between PSA and GPA led to the rapid development of Gwadar Port. The port`s infrastructure improved, and port operations were streamlined, reducing the vessel turnaround time significantly. The port`s increased capacity has also led to a surge in port activity, with more significant vessels calling at Gwadar to transport goods.
Despite considerable progress, the Gwadar Port project faced challenges. The transfer of the port`s ownership from the GPA to the China Overseas Port Holding Company (COPHC), the Chinese state-run company, caused controversy and delays in project execution.
The PSA`s role in developing Gwadar Port ended in 2013, when the PSA transferred its shares in the Gwadar International Terminal Limited (GITL), the company that manages the port, to the COPHC.
In conclusion, the Gwadar Port agreement was a crucial step in the development of Gwadar Port, which has become a vital node in international trade. Despite challenges, the project has made significant progress, and with the continued support of the Chinese Government, Gwadar Port is set to become a hub of economic activity in the region.