Background of the Sost Port crisis


Weekly Bang-e-Sahar Saturday, May 10—-May 16 ,2008

By Farman Ali

The Government of Pakistan and China after the opening of Karakoram Highway realised the need to facilitate and promote cross border trade by establishing a dry port at Sost which was ultimately set up in 1998. A trust was registered with the Northern Areas Government in 1999 to develop the infrastructure and safeguard the interests of the people. In order to involve foreign technology, skills and investment a private company was registered in the name of Silk Route Port Company to manage the port affairs and look after the interests of the shareholders.

The trustees after establishing the Silk Route Port Company, entered into a joint venture agreement with a Chinese company, Sinotrans Alashenko Company, on 22nd February, 2002. The JV Company was registered in Gilgit in the name of Pak-China Sost Port Company. Under the agreement the Chinese company holds a share of 60 per cent in the form of construction and providing machinery for the port while the Pakistani side holds 40 per cent share for an agreed period of 10 years starting from the registration of the company in 2004. 

There are 7 directors in the Pak-China Sost Port Company, four from the Chinese side and three from the Pakistan side who are elected by the board of directors of their respective companies.

Ghazanfar Ali Khan and Saleem Khan were holding an honorary position for three years, as they had no share or any kind of investment – land or cash – in the company. Both of them with others directors were removed from their post on 26th April 2006 by majority votes of 14 directors for their alleged misuse of power and misappropriation of company funds, and the conspiracies to ultimately turn the port into its private property. Mr Burhan Shah was elected as a Vice-Chairman of the company. They took control of the port management on May 2. But the removed directors with official protocol and heavy arms stormed the port, broke the doors and a video camera of Sanjar Baig was broken and evicted the board of trustees from their offices at gun point. They also threatened the Chinese officials and even broke the door of Yuan Jianmin. The Chinese filed an FIR against Salim Khan but the police did not arrest him due to his political influence and interference. The police declared him proclaimed offender but he is still roaming around freely and without any fear.

Later on Ghazanfar appointed district councillor Iman Shah, a non-member of the trust as Deputy Managing Director illegally, as according to the Local Government Act a public representative can not hold any office to get monitory benefits.

The federal government took notice of a report filed by this reporter that appeared in daily Dawn on September 25, 2006 about the crisis and sent teams of the Central Board of Revenue (CBR) and sensitive agencies to Sost to probe the corruption and mismanagement in October 2006.

To resolve the dispute, a Reconciliation Committee comprising 40 notables, public representatives and political leaders was established in October 2006.

The committee met the shareholders and landowners and obtained their consent to resolve the dispute through arbitration and submitted a detailed report to the Northern Areas administration, requesting the government to restrain both the parties from interfering in the port affairs.

Ghazanfar Ali Khan and others despite expressing their confidence in the Reconciliation Committee and giving written undertaking that they would accept whatever decision was taken by the committee regarding the port affairs, backed out, when the committee after probing the financial irregularities announced holding of elections on April 22, 2007. Mr Ghazanfar violated the agreement and moved a local court against the committee’s decision.

The shareholders and trustees at a special meeting held on 4th April 2008 again removed Ghazanfar Ali Khan,  Salim Khan, Barkat, Shahbaz Khan and Iman Shah from their positions for not convening Silk Dry Port Trust’s AGM, not auditing the accounts, not holding any election for the board of trustees, using local bureaucracy, misbehaving with the trustees, and other mismanagement.

The new management took over the control of the port with the opening of Pakistan-China border at Khunjerab pass for trade and tourism on May 1, 2008 amid fanfare and jubilation. But instead of accepting the Trustees’ decision, Mr Ghazanfar filed a case against the Board of Trustees and other public representatives.

The civil court ordered the arrest of the board of trustees and their legal adviser Advocate Ehsan Ali and sent a heavy police force in the area to harass the new management and the community. But the Board of trustees through their lawyer moved the district and session’s court Gilgit against the lower court decision. The district and sessions court suspended the order of a lower court and restrained the local police from taking any action against the new management.

Ghazanfar is now using his Chief executive Office to influence the local administration by writing letters to President Musharraf, COAS and Corps Commander of Rawalpindi.

This is a conspiracy by hidden hands to create unrest in this sensitive area and capture the port which is bound to affect Pakistan‘s relations with China

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