China sounds alarm on Gwadar delays, ML-1 funding

ISLAMABAD: China has raised pressing concerns with Pakistani authorities over delays in transferring 97 acres of land in Gwadar and funding uncertainties for the Main Line-1 (ML-1) railway project. These concerns, coupled with Beijing’s calls for a robust joint security mechanism, cast a shadow on the China-Pakistan Economic Corridor (CPEC) amid Pakistan’s economic crisis and regional security dynamics. The Pakistani side wishes to kick-start the second phase of the China-Pakistan Economic Corridor (CPEC). The Chinese side conveyed to Islamabad that despite Gwadar Port being handed over to China almost ten years ago, the allocated land has not been fully cleared, making it difficult for them to develop and operationalize the port city.

Top official sources confirmed to The News on Thursday that this issue came to the surface before the arrival of the Chinese prime minister to Pakistan and the Ministry of Maritime Affairs was tasked to clear the land and ensure possession to China Overseas Ports Holding Company.

The official sources said that the Gwadar Port agreement was signed nearly a decade ago, and significant progress has been made recently. Nearly all of the 2,281 acres allocated to the China Overseas Ports Holding Company (COPHC) have been transferred, except for 97 acres controlled by the Pakistan Navy and Pakistan Coast Guard due to security considerations. “We’re actively working to resolve these remaining issues and are optimistic about completing the full handover soon,” sources said.

The official sources said it was inappropriate to term it negligence, but it should be attributed to the complexities of a large-scale project like Gwadar Port. The Ministry has been working diligently to address land clearance issues, security concerns and infrastructure development. “We’ve made significant strides in promoting Afghanistan’s transit trade and ocean fishing transhipment at Gwadar, expanding its capacity for regional trade.” The Government of Pakistan has adopted key measures including Free Zone Development: 60 acres allotted to various companies, with 45 more registered for business in the North Free Zone.- Infrastructure Upgrades: Improving water and electricity supplies and enhancing security at the port.- Inland Connectivity: Expediting projects like the M8 highway to boost Gwadar’s integration with economically developed regions.- Tax Exemptions: Securing critical provincial tax exemptions to support businesses. “We’re committed to fully realizing the potential of Gwadar Port for Pakistan’s economic growth and look forward to continued collaboration with our Chinese counterparts” said the official.

Secondly, the Chinese side wants a joint security mechanism and both sides are discussing possibilities of sharing intelligence mechanisms to provide seamless security to Chinese working on different projects in Pakistan. It is one of the biggest concerns expressed by the Chinese side. Pakistan’s Ministry of Interior along with the security establishment is engaged with the Chinese side to devise a mechanism. Thirdly, Pakistan wants the construction of much-awaited Mainline-1 project as its revised cost was approved by the Executive Committee of the National Economic Council (ECNEC). It was the wish of the Pakistani side that both sides kick-start a financing agreement whereby the Chinese should finance the first phase from Karachi to Sukkur or Multan. However, the Chinese side has made it clear that they were sending their technical team to Islamabad within a month to negotiate modalities for the ML-1 project but they would finance the first phase from Karachi to Hyderabad only. The Chinese side also observed that it would be hard for Pakistan to finance the rupee cover of ML-1 when the country was under the stringent conditions of IMF. This scribe contacted Minister for Planning Ahsan Iqbal to seek his comments who said that the land issue with the Pakistan Navy had been resolved. They were now pursuing Coast Guards to hand over the land to the Chinese. The remaining issues will be resolved once the land is made available. On the joint security mechanism, he said that it was the domain of the Ministry of Interior and they were working on it. On ML-1, he said a Chinese team would be visiting Pakistan soon to finalize the financing agreement for phase 1 from Karachi to Hyderabad.