Concerns Over China's Gwadar Port Takeover "Groundless"

COPHC took over the running of Gwadar port on Monday.

China's state run China Overseas Port Holding Company (COPHC) on Monday took over control of Pakistan's Gwadar port from Port of Singapore Authority (PSA), and a report today in China's media said any concerns raised over the move were "groundless."

Singapore's PSA had been awarded a 40-year port-handling agreement in February 2007, but Pakistan's English-language newspaper, Dawn, reported that they were abandoning the project as Pakistan had failed to meet its side of the agreement.

After a signing ceremony on Monday, Reuters reported that Pakistani President Asif Ali Zardari said he hoped Gwadar would soon be a "hub of trade and commerce in the region," with China's People's Daily saying it was a win-win move for both China and Pakistan.

Investment

China is reported to have invested between 75 and 80 percent of the approximate $250 million development cost of the Arabian Sea port, which is part of a plan to open up an energy and trade corridor from the Gulf, across Pakistan to western China.

However Indian Defence Minister A.K. Antony told reporters on February 6 that Chinese control of the port was "a matter of concern," with analysts speculating that it could be used by the Chinese Navy.

Adding to that concern was China's investment into other port developments with India's neighbours including Chittagong in Bangladesh, as well as it providing the "bulk" of the $1.5 billion to build the port of Hambantota in Sri Lanka.

But China's People's Daily today called the concerns "groundless" and India "oversensitive."

The "special location" of the port, close to Iran and just 400 kilometers away from the Strait of Hormuz, had led Western media give the move "extraordinary political significance," it said.

Rather, Zhao Gancheng, researcher with Shanghai Institute of International Studies was reported as saying it will greatly improve the security of China's energy and trade related maritime transport.