ISLAMABAD (REUTERS) - Pakistan has approved the transfer of operation of its giant Gwadar port to a Chinese firm from Singapore's PSA International, a minister said on Thursday.

China financed more than 80 per cent of the development cost of US$248 million (S$305.3 million) for the port on the Arabian Sea, as part of a plan to open up an energy and trade corridor from the Gulf, across Pakistan to western China.

But the port has been affected by worsening security in Pakistan's southwestern Baluchistan province, a dispute with the port operator PSA and the slow pace of road links.

"The cabinet yesterday approved transfer of Gwadar Port's operation from Singapore's PSA International to Chinese Overseas Port Holdings Limited and both groups have reached an agreement in this connection," Information Minister Qamar Zaman Kaira told Reuters.

He said PSA could not operate the port "as desired". PSA was not immediately available for comment.

"We hope that the Chinese company will invest to make the port operation help Pakistan support its economy." He said operation of the port would be handed over soon.