Gwadar Port revenue bypasses Balochistan, CM to raise issue

QUETTA – The Gwadar Port Authority has conveyed to the Balochistan government that the province holds no entitlement to the revenue generated from the port’s operations.

In an official circular, the authority stated that the operational control of Gwadar Port is currently held by a Chinese company. The circular further disclosed that two of the operating entities are contributing only 9.9 percent of their revenue to the Gwadar Port Authority, while a third entity is providing 15 percent.

Chief Minister Mir Sarfaraz Bugti has expressed his concern over the issue and assured that it will be taken up with the federal government.

Gwadar Port Authority (GPA)

• Established: Under the Gwadar Port Authority Ordinance, 2002, the GPA is a statutory body of the Government of Pakistan, responsible for overseeing the development, operation, and maintenance of Gwadar Port.
• Key Responsibilities:
  • Managing port operations and infrastructure.
  • Facilitating trade and logistics.
  • Ensuring environmental and safety standards.
  • Promoting regional development and employment opportunities.
• Revenue Sources:
  • Port operations (e.g., terminal services, marine services).
  • Gwadar Free Zone activities.
  • Miscellaneous services and fees.

Stakeholders

1. China Overseas Port Holding Company Limited (COPHCL):
   • Role: Primary operator and developer of Gwadar Port and the Gwadar Free Zone.
   • Responsibilities:
     • Developing and operating port facilities.
     • Managing the Free Zone under a Build-Operate-Transfer (BOT) model.
     • Investing approximately $5 billion during the concession period up to 2048.
2. Government of Pakistan:
   • Role: Federal oversight and policy-making.
   • Responsibilities:
     • Providing strategic direction and support.
     • Ensuring national interests are upheld.
     • Allocating funds for maintenance and development.
3. Government of Balochistan:
   • Role: Provincial oversight and local engagement.
   • Responsibilities:
     • Representing local interests and communities.
     • Advocating for equitable revenue sharing.
     • Addressing socio-economic impacts on local populations.
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• Distribution:
  • COPHCL:
    • 91% of revenue from Gwadar International Terminal and Gwadar Marine Services.
    • 85% of revenue from Gwadar Free Zone.
  • GPA:
    • 9% of revenue from port and marine services.
    • 15% of revenue from the Free Zone.

Note: The revenue-sharing model is based on international port concession agreements, which typically allocate a larger share to the operator due to their investment and operational responsibilities.

Challenges and Concerns

• Maintenance and Dredging:
  • The GPA is responsible for regular maintenance and dredging of the port.
  • However, financial constraints have hindered the timely execution of these tasks.
  • A significant portion of the required funds has not been allocated, impacting port operations.
  • There are ongoing efforts to involve local communities in the development process.
  • Initiatives include vocational training programs and support for local fishermen to enhance their livelihoods.