ISLAMABAD, July 1: Three international companies are in the run for the contract to operate Gwadar Deep Sea Port, which is expected to be completed by July 30.

Sources said that after the operators of Dubai World Port and Singapore Port, the operator of Hupchon company of Hong Kong had submitted its expression of interest (EoI) to operate the port.

The Chinese government is also believed to have seperately lobbied for a Chinese company to win the rights for operating the Gwadar port.

“But from our side, Gwadar port is complete except minor work of fixing some buoys for guiding ships,” a source said, adding that a top-level Chinese leader was likely to inaugurate the first phase of the port along with President Gen Pervez Musharraf.

However, he said that the government needed to decide the issue of operator before the port’s inauguration. He said the government had delayed the decision to appoint an operator because of the last minute submission of EoI by the Hong Kong-based company.

Interestingly, the same company, sources said, had earlier withdrawn itself from the race.

Sources also said that the government would soon be announcing a 15-year tax holiday in the proposed Export Processing Zone (EPZ) being planned near Gwadar port. There will also be exemption on customs, sales tax and excise duty in the EPZ to promote investment.

Sources said that a number of foreign investors have shown interest to establish refineries, building storage capacity and undertaking other businesses in the Gwadar area.

With the completion of both the phases of Gwadar port, a Special Industrial Development Zone (SIDZ) over 4,000 hectares had also been proposed. The zone is located on the north of Gwadar town about 30 kilometres from the port.

Sources said that foreign cargo vessels could begin deliveries as over 90 per cent work on the port had been completed.

They said that the first phase of the construction had almost been finished after the government disbursed $50 million more to the ministry of communications.

The additional funding was provided to install the required equipment, complete civil work and build roads linking the port with Quetta and other areas.

The Chinese side has completed its work while local authorities have completed the development of infrastructure, including the building a road linking Gwadar with Karachi.

Sources said that the project’s second phase would be undertaken, hopefully later this year at a cost of $865 million. It is scheduled to be completed by 2010.

Sources said that completion of the second phase would help meet strategic needs and standby facility to Port Qasim and Karachi Port in case of emergencies. The construction of phase-2 would be completed on the basis of Built Operate Own (BOO) and Built Operate Transfer (BOT) basis. “However, if the private sector does not respond favourably, public sector financing will be required to develop the port’s second phase,” a source said.

The port will generate foreign exchange earning as the vessels registered under foreign flags are required to pay some portion of charges in foreign exchange through their local agents for cargoes.

The amount of foreign exchange earned will not be reflected in Gwadar Port account, but will contribute to national foreign exchange earnings. At the present rate of Karachi Port Trust (KPT) Tariff, the foreign exchange percentage is estimated at 33 percent of the charges payable to Port authorities.

Officials said that Gwadar had an edge over Port Salalah of Oman and Iran’s proposed upgradation of Port Chah Bahar. However, Gwadar will have to compete with both the foreign ports.

Gwadar is expected to serve as Mother Port at the strategic location opposite to Straits of Hormuz and on the mouth of Persian Gulf and provide port, warehousing, transshipment and industrial facilities for trade with over 20 countries, including the Gulf states, Central Asian Republics, Iran, East Africa, Red Sea countries and China and India.