ISLAMABAD, 14 October 2006 — Pakistan Navy has reportedly opposed the construction of the $43.13-billion Diamond Bar Island City near Karachi and the country’s Defense Ministry must approve the project before it can move forward, an anonymous source in the Finance Ministry told Arab News here on Thursday.
“The Economic Coordination Committee (ECC) of the Cabinet deliberated the project in detail and sought the viewpoint of the navy regarding proposed utilization of the two islands,” the source said.
The 13-year project, through which the Port Qasim Authority (PQA) is expected earn $3.72 billion, has been planned by the United Arab Emirates-based real-estate development giant Emaar Properties.
If the Defense Ministry approves the project, 12,000 acres of land on Bundal and Buddo islands would be developed for residential, commercial and leisure activities. Industrial parks, a free-trade zone and port terminals are also planned.
If developed, Emaar will retain 85 percent of the profit on a 99-year lease while the port authority would retain 15 percent.
The source said the ECC is also opposed to the project. “The deal is not comprehensive and requires many clarifications,” said the source, who said some members of the ECC are concerned that the project would negatively impact the Pakistan Navy’s port activities on the islands.
The source said details, such as the demarcation of the islands, non-performance liabilities in the event of project cancellation, a dispute-resolution mechanism, and environmental and hydrological aspects all still need to be clarified.
The ECC, after holding detailed discussions on the project, approved the proposal in principle, but announced the need to work out the concerns expressed by the Pakistan Navy. The port authority is consulting with legal and financial advisers from the ministries of Law and Finance. The Finance Ministry announced that it would provide financial support for negotiations between the port authority and Emaar, which is the only company of the four vying for the project that has been pre-qualified to win the bid.
