• Monday, December 17, 2018

Pakistan to get 9pc of Gwadar income, 15pc of FEZ: China

Discussion in 'Pakistan Economy' started by naveedullahkhankhattak, Nov 28, 2017.

  1. naveedullahkhankhattak

    naveedullahkhankhattak SENIOR MEMBER

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    ISLAMABAD: China on Monday said that Pakistan would be getting 9 percent share out of total income of Gwadar Port and 15 percent of Free Economic Zone exactly on the pattern of agreement signed with Port of Singapore Authority (PSA) which was later on struck down by Islamabad authorities.

    China has not agreed to include construction of Diamer-Basha dam as part of China Pakistan Economic Corridor (CPEC) at the moment not because of territorial dispute with India but its civil work was more expansive than biggest Three Gorges Dam in China having five time more capacity of generating electricity than Basha dam of 4500 MW.

    “Pakistani government has made very smart move to strike a good deal as they will get 9 percent share out of total income of Gwadar port instead of total earned profits, although, the agreement was signed on Built, Operate and Transfer (BOT) basis. The Gwadar port will start earning profits after nine years. Pakistan will also get 15 percent of total income from Gwadar Free Zone,” Lijian Zhao Deputy Chief in Chinese High Commission in Islamabad said while addressing Third Annual CPEC Media Forum organized by Pak-China Institute in collaboration with Chinese Embassy in Pakistan here on Monday. Some Chinese journalists participated in this media forum including Ms Wang Lin representing China Business News, Meng Xianglin Editor Peoples’ Daily of China. Ms Wang Lin on the issue of increasing trade deficit said that US companies established units in China and sending products to Pakistan but China considered its exports on the basis of only value addition. Pakistan, she said, will have to explore its comparative advantages in order to penetrate into Chinese market.

    Earlier, in the inaugural session, newly appointed China’s Ambassador in Pakistan Yao Jing said that the CPEC had resulted into creating new confidence in both Pakistan and China as the two countries had entered into new phase of progress and prosperity. He said that the CPEC would bring prosperity in whole region as many projects were under completion in Pakistan. He said that the media would have to play its due role as they were our great partners. Now the media persons should pay visit to CPEC projects to witness physical progress on the ground, he added. He said he possessed knowledge about Pakistan as he had worked in China’s Foreign Ministry at Pakistan related desk, adding that he had worked as Deputy Mission Chief in India and also worked in Afghanistan.

    On establishment of SEZs, Lijian Zhao said that three SEZs including Rashakai, Dabeji and Faisalbad seemed feasible out of total nine as all feasibility studies done by federal and provincial governments shared with Chinese side during recently held 7th JCC meeting in Islamabad.

    Senator Mushahid Hussain, Chairman Parliamentary Committee on CPEC said that China gave vote of confidence by striking CPEC with Pakistan. He said that there were currently 300 projects undertaken by Chinese in Pakistan on which 9,581 Chinese nationals were working on CPEC projects and around 10,000 were working on non

    CPEC projects. So total 20,000 Chinese are working as technicians and supervisors for all projects taking place with China’s assistance, he added.

    He said that there were no Chinese labours working in Pakistan and there was need to sift facts from perceptions. “Around 60,000 Pakistanis are working on CPEC related projects,” he said and added that one million jobs would be created after relocation of SMEs factories from China into Special Economic Zones (SEZs).

    The CPEC, he said, is strategically important for Pakistan and its above any governments coming into power in the country. He said that the balance was shifting from west to east as USA and Europe is on decline after witnessing level of speeches of leaders in USA and Brexit episode in Europe.

    On other hand, he said, China possessed more importance on regional and global level and it would have risen without colonialism, occupation, use of force and war and USA was in trouble because of pluralist world. He mentioned that there was another unique development happened in China that they lifted 700 million from clutches of poverty as such thing had never happened in human history.

    He said that USA and India was hatching for sparking new cold war with the objective of containment of China and there was need to counter these things from our side.

    Former Senator Afrasiab Khattak said that this region and its inhabitants were prosperous when the Silk Route was operational and now China was making efforts to revive the route with its Belt and Road Initiative. He stressed upon the need for promoting close trade and economic ties with regional states especially with Iran and Afghanistan.

    At the end CPEC Media Forum endorsed for initiation of CPEC Award for print and electronic media on the basis of best reports and photographs on annual basis.

    https://www.thenews.com.pk/print/249957-pakistan-to-get-9pc-of-gwadar-income-15pc-of-fez-china
     
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  2. naveedullahkhankhattak

    naveedullahkhankhattak SENIOR MEMBER

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    also those who think that there will be loan problems, let them know that its Chinese companies who took loans and they will have to return it.
     
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  3. xyxmt

    xyxmt ELITE MEMBER

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    you want Chinese to call every concerned Indian?
     
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  4. mkiyani

    mkiyani FULL MEMBER

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    I hope both countries get more benefits apart from this deal.. And I hope china provides jobs to both country citizens, trained them sincerely.. and kick out rumors spread by indians and other countries that China will fraud or deceive Pakistan.. Long live China Pakistan friendship..hope Allah blesses Pakistan and china also with all progress and wealth Ameen..
     
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  5. Mrc

    Mrc SENIOR MEMBER

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    There shud be a special help line set up for Indians... free prescriptions of burnol offered
     
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  6. Cybernetics

    Cybernetics FULL MEMBER

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    The article is saying Pakistan gets a cut from total income (revenue) not net profits. 9 percent and 15 percent of revenues is a lot of money and a tremendous deal for Pakistan, it is essentially the lease payment. Taking money off the top line produces a very stable income (good for covering financing costs), even if profits are negative Pakistan still gets paid thus it should be making money from the start while China takes loses for 9 years.

    Gwadar port has distant plans for capacity of 400 million tons of cargo per year. Usually net profit for Chinese ports are $0.5 per ton and profit margins are around 30%. Even though I don't think 400 million tons will be achieved anytime soon, it will give a general idea of profit distribution.
    Gwadar port simplified estimation beyond phase 2:
    • $670 million revenue
    • $200 million profit
    • Pakistan receives $60 million , 9% of revenue (earning $2-2.4 billion over 40 years)
    • China receives $140 million (earning $ 4.3 billion over 40 years, first 9 years is $0)
    • The mature stage profit sharing would be Pakistan 30% and China 70% while at the start before profitability it would be Pakistan 100% China 0% ,reaching a 30/70 equilibrium after 9 years.
    • Lifetime profit would be 32-35% received by Pakistan and 65-68% by China.
    • End of 40 years Pakistan receives a $3-5 billion valuation port
    • Capital expenditure is recycled back into the economy
    Gwadar free zone is even more of a cash cow for Pakistan. 15% of revenues from an industrial park where rent is likely to appreciate overtime. As soon as the first customer pays the industrial park for rent, Pakistan gets paid even if the whole operation is not making a profit. Park space will be open to the world. 40,000 people will be employed in the park, all being Pakistani. Chinese would oversee QC, provide technical assistance, and training in factories, it makes no sense to employ regular Chinese workers as their wages are higher. The only place where Chinese workers are likely to be employed in larger numbers is the port.

    Essentially any financing Pakistan has won't be an issue as the first one to be paid is Pakistan. Cash-flows will cover financing. Pakistan takes from revenues while China takes from profits, so if China wants to make money then Pakistan will get paid for sure.
     
    Last edited: Nov 28, 2017
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  7. AZADPAKISTAN2009

    AZADPAKISTAN2009 ELITE MEMBER

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    [​IMG]

    [​IMG]



    China's GDP = 11-12 Trillion USD

    Last year, exports and imports via Shanghai Port were valued at 6.9 trillion yuan (US$1 trillion), up just 1.5 per cent from 2015.

    :china::pakistan:


    Now obviously , the port will take some time to reach that standard but with cooperation and hard work it will get there

    Pakistan is quite happy with our Arrangement

    [​IMG]
     
    Last edited: Nov 28, 2017
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  8. IceCold

    IceCold PDF VETERAN

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    Thanks for the explanation. Does it also cover the revenue from toll plaza covering the highways all the way from Pakistan to Gawadar and than to China?
     
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  9. Horus

    Horus ADMINISTRATOR

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    Its not a bad deal considering we didn't pay anything and we will own one of the largest ports in human history in 40 years. You can't pay off a decent house in that time.
     
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  10. Enigma_

    Enigma_ FULL MEMBER

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    People in Pakistan give way too much relevance to Indian news/propaganda. The CPEC has benefits far beyond than just economic benefits. Just sit back and enjoy the show in this regard ladies and gents.
     
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  11. punit

    punit SENIOR MEMBER

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    Wow ... oP: pakistani, source : pakistani writer : pakistani ! But some how india is involved.
     
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  12. Enigma_

    Enigma_ FULL MEMBER

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    I am not talking about OP. But the false narratives the Indian media spreads creates great panic here on the forum and other pakistani news outlets. Ignoring their idiocy is best.
     
  13. punit

    punit SENIOR MEMBER

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    As I mentioned news source and writer is also pakistani so unless you assume that they are paid by india to write this stuff this thread has nothing to do with india yet you are dragging it .
     
  14. Enigma_

    Enigma_ FULL MEMBER

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    WTF are you talking about? I never said the writer is paid by India. The report above is posted here to counter the false narrative produced by the Indians. But there's no need because Indian media just tells lies to satisfy their own people.
     
  15. snow lake

    snow lake BANNED

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    Well it will be Michael shaking his head in the call centre answering in a very spicy accent
     
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