An internal official assessment of the much-hyped China-Pakistan Economic Corridor (CPEC) has revealed that the Port Concessions Agreement — relating to operation of Gwadar Port — needs to be revised.
The assessment was undertaken by the Cabinet Committee on CPEC in Pakistan.
Under any concession agreement that is typically between a federal government and a private company, the latter gets access to certain rights for a specified period of time.
Notwithstanding the findings, it is unlikely that Pakistan will be able to revise the Concessions Agreement with China as this could impact bilateral relations.
“At a time when Pakistan is under a spotlight for its role in Afghanistan, it is even more unlikely that it will bring up these issues with Beijing. That apart it is now heavily dependent on Beijing for financial assistance,” an insider said, who pointed out that a few African countries have, however, started putting pressure on China.
Though both Beijing and Islamabad have maintained that CPEC will be a game-changer, the glaring anomalies could cause embarrassment to Pakistan Prime Minister Imran Khan, analysts told India Narrative.
Amid multiple economic challenges that engulf Pakistan with a sharp depreciation of its currency, falling foreign direct investment level and rising debt levels, CPEC, especially in relation to Gwadar– considered the jewel in the crown, is yet to start showing the desired results though Khan has repeatedly said that the project will be boost economic activities of the South Asian nation.
To add to the problem, the pace of work has remained slow.
According to the Express Tribune, an official assessment of the project commissioned by the Cabinet Committee on the CPEC has underlined the need to revise and recharter the Concessions Agreement. “Long being marketed as the center-piece of the CPEC, Gwadar has yet to reach the heights of expected industrial development that can serve as a catalyst for domestic and foreign investment,” the report has said.
Consider this. The China Overseas Port Holdings Company Limited (COPHCL) under a new 40-year lease of the Gwadar Port in November 2015 came to an agreement that “the port operators get 91 per cent of port revenue.” Only 9 per cent will be directed to the federal government.
A few analysts India Narrative spoke to said that the CPEC and the contours of the multiple agreements “typically benefit China.”
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“In the short to medium term, CPEC is unlikely to bring any major economic benefits to Pakistan but at this critical juncture, the country requires immediate results,” one of them said.
Earlier speaking to India Narrative, late Shakti Sinha, director, Atal Bihari Vajpayee Institute of Policy Research and International Studies, MS University said that the potential of the CPEC can be fully achieved only if the project is extended to Afghanistan on one side and India on the other. “The CPEC will never deliver the way it is envisaged if Afghanistan and India are not connected. Though Afghanistan is now keen to come on board, a lot of uncertainties continue to nag the project,” Sinha in an interview had said.
That apart, concerns for Beijing have risen in the last few months after the suicide attack at Gwadar in Balochistan province – close to CPEC construction site. The attack was targeted at Chinese nationals. In another major setback, in July a blast on a bus in Pakistan’s Khyber-Paktunkhwa left nine Chinese nationals dead.
