KARACHI, June 27: The Gwadar Port Authority (GPA) in its board meeting has decided to refund $2 million performance bond to the operator Port of Singapore Authority (PSA) despite the fact that the latter defaulted on its agreed business plan.

Sources privy to GPA board meeting held on June 22, at a local hotel, told Dawn that some members raised objections over the decision to refund the performance bond to the port operator, who did not only fail to perform but also defaulted on its business plan.

They said that as per the business plan the PSA was bound to use the port’s operational capacity up to 50 per cent in the year 2007 and 100 per cent capacity this year.On the contrary the PSA failed to bring in even a single vessel to the port during last 18 months and installed 22-year old refurbished two gantry cranes, which are yet to be tested by an independent surveyor.

Meanwhile, port and shipping experts say that the PSA has totally defaulted on agreed concession terms and conditions and was dragging its feet without making any investment in marine services (tug, pilot and mooring boats), port operation and cargo handling.

The PSA has two local partners – AKD securities and NLC – who are primarily involved in the development of a free economic zone and logistics. Therefore, they have little role in bringing the port operational.

These experts said that during 18 months period only one vessel chartered by the state-owned Trading Corporation of Pakistan (TCP) loaded with 72,000 tons of wheat was given berth after lighterage.

Therefore, the performance of the PSA could well be judged from the fact that for any port operator the primary responsibility is to induce shipping lines so that a port becomes operational but in the case of Gwadar any shipping line has yet to show interest.

The shipping circles are flabbergasted over the GPA decision to refund the performance bond of $2 million to PSA at a time when the federal cabinet has proposed a revisit of the contract signed between a consortium of Singapore Port Authority/AKD Securities.

The cabinet also considered the GPA’s revised bill for carving a new corporate structure of the Gwadar Port, which could be based on professionals and qualified people in maritime affairs.

The maritime experts said that had the GPA or for that matter the ministry of ports and shipping monitored the PSA performance during the last 18 months, the situation would not have been so bad.

These experts have suggested that not only the PSA contract should be revisited but the entire bidding procedure for the Gwadar Port should be investigated in which other bidders – West Port Malaysia, and Globe Marine (Saudi Arabia and Pakistan International Container Terminal were not allowed sufficient time to prepare their tender documents for getting the concession.