DPW may win Gwadar port deal in 'trade-off'

DUBAI — Pakistan may scrap the normal open bidding process to hand over Gwadar port management directly to Dubai Port World in a possible trade-off, according to a top ranking government official.

By Isaac John (Chief Business Reporter)

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Published: Sun 11 Jun 2006, 10:45 AM

Last updated: Sat 4 Apr 2015, 3:24 PM

Waseem Haqqie, head of Pakistan’s Engineering Development Board, was quoted by Dow Jones that Pakistan might skip the open bidding process "as a favour," shutting the door to other interested parties. "We have followed the bidding process in all previous deals, but in the case of Gwadar it can be a direct handover."

Haqqie, who is the former chairman of Pakistan’s Board of Investment (BOI), said: "As far as I know there is a strong possibility of a trade-off here. I believe, after the deal is finalised, Pakistan will see some more Dubai investments in different sectors,” he said.

The UAE has become the largest foreign investor in Pakistan following an investment commitment of more than Dh124 billion made by Emaar, Dubai World and Etisalat in various industrial, real estate and telecom projects.

Haqqie's statement comes close on the heels of an announcement made by Balochistan Chief Minister Jam Mohammad Yousaf that the operational management at the deep-sea port has already been given to DP World. Gwadar Port is in Balochistan province.

Although both sides — Pakistan government and DP World —have yet to formally announce the deal, the chief minister's statement endorses the views expressed by the former BOI chief that the government of Pakistan preferred DP World over other shortlisted bidders including PSA International of Singapore, Globe Marine Services of Saudi Arabia and Pakistan International Container Terminal.

Following the exit of Hutchison Port Holdings of Hong Kong, a strong contender, from the race, it was almost certain that DP World, a subsidiary of Dubai World, would win the bid to take over the management of the strategic Arabian Sea port built with Chinese assistance.

Chief Minister Jam Mohammad Yousaf, talking to media recently in Quetta, also said five border points have been opened with Iran to promote trade via Gwadar port. He said the port would take time to start generating revenue and denied a statement by the provincial finance minister that the Balochistan government had sent a proposal to the federal government regarding fixation of a specific percentage in the revenue for the province.

Commodore Munir Wahid, project director of the Gwadar Port Implementation Authority, also recently hinted at the good progress made by both sides in finalising the agreement to give DP World operational management of the port, which is envisaged to be used as corridor for energy supply to China. It can also be an energy corridor for Pakistan, China and India. Apart from this, the new port is positioned as a trade and industrial and oil transportation corridor.

DP World has also bid for Gwadar's $865 million phase-II that will add nine more berths, an approach channel and storage terminals. It will have three container terminals with a quay length of 2km. The total cost of the Gwadar project is estimated at $1.6 billion, of which China has contributed about $198 million for the first phase. China invested another $200 million to build a highway connecting the port with Karachi.

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