Pakistan to seek more Chinese help for Gwadar port

(Reuters) - Pakistan will seek increased Chinese involvement in the operation of a strategic port run by Singapore’s state-owned PSA International Ltd, government officials said last week.

The officials’ comments echoed a news report published on the eve of Chinese Premier Wen Jiabao’s visit to Pakistan on Friday, in which Prime Minister Yusuf Gilani hinted at greater Chinese involvement in the Gwadar port.

“We will discuss with China the mechanism to make the Gwadar port operational during the visit of the Chinese Prime Minister Wen Jiabao,” The News quoted Gilani as saying.

The chief minister of Baluchistan, the southwestern province where Gwadar port is located, is already seeking the cancellation of the contract with PSA on the grounds that it is a “one-sided” deal, and the case is pending in the Supreme Court of Pakistan.

“We cannot take a decision at the moment because the matter is before the Supreme Court and we have to wait for the court’s decision,” a senior official in the Ministry of Ports and Shipping told Reuters. “But obviously, China is a good and obvious choice.

“If the court orders (the contract) scrapped, then we have to find another firm to run the port. We cannot waste time.”

Another senior official in the foreign ministry said, “Obviously, they (China) are a close friend and they have expertise and interest so they would be a better choice if the contract ends.” China invested $200 million in the first phase of the port’s construction, which was inaugurated in 2007 when management and operational control was given to PSA for 40 years. Pakistan, struggling to revive its debt-laden economy, is keen to become a conduit for trade to landlocked Afghanistan and Central Asia. It has three major ports -- Gwadar in Baluchistan and two at Karachi, 450 km (280 miles) to the east.

A PSA spokesman declined to comment on the reports.

Wen’s visit from Dec. 17-19 follows a similar visit to India, where he succeeded in wooing his hosts with deals worth more than $16 billion.

But the worth of deals between Pakistan and China, hailed as “all-weather” friends, is smaller. Masood Khan, the Pakistani ambassador to China, told Aaj News on Thursday that the two countries would agree to deals worth between $10 billion and $14 billion.

Under one deal, China will agree to open a branch of the Industrial and Commercial Bank of China in Pakistan, government officials in Islamabad told Reuters. ICBC is the top private bank in China and the world’s largest in terms of capitalisation. Including the bank deal, the two premiers will sign 36 memoranda of understanding and agreements -- 14 intergovernmental deals and 22 between private businesses.

The agreements are expected in areas of trade, energy and infrastructure.

Still, Wen’s visit is intended to reassure Pakistan that the two countries’ energy, military and economic ties remain tight, despite Beijing’s growing relations with New Delhi.

The premiers of the two countries are also scheduled to preside over a Pakistan-China Business Cooperation Summit on Saturday, where most of the private sector deals will likely be inked.