On April 20, Pakistan’s minister for ports and shipping announced that his ministry has given a Chinese firm a forty-year lease for the strategic Port of Gwadar.
The lessee, state-owned China Overseas Port Holding Company, has been building out the port’s infrastructure since 2013. Under its new long-term contract, it will retain over 90 percent of revenue from Gwadar’s marine operations, plus 85 percent of the revenue from the management of an adjacent free zone. It will also benefit from the deep tax exemptions that Pakistan has granted to Chinese companies for projects related to the China Pakistan Economic Corridor (CPEC), a network of transportation infrastructure stretching from the Arabian Sea to the Chinese border.
“We hope to create a new economic development model for the port by transplanting China’s experience in building special zones or economic development areas to Pakistan, in a bid to drive the country’s industrial transformation,” said COPHC CEO Zhang Baozhong, in comments to China Daily.
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