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Gwadar port set to bring economic regime change

Gwadar port is the gateway of China-Pakistan Economic Corridor (CPEC), and one can believe that the progress of Gwadar port will bring economic gains to the province of Balochistan with potentially capable to act as industrial power house, an appropriate transit and transshipment hub in the region. Presently, it is becoming almost a proverbial to narrate Gwadar Deep Sea Port as a ‘game changer’ in trade and economic development in Pakistan. It is mentioned in the dissimilar reports that the economic advantages of Gwadar port, are: capitalizing the opportunities for trade with landlocked Central Asian Republics and Afghanistan; promotion of trade and transport with Western China; trans-shipment, basically of containerized cargo; unlocking the development potential of the hinterland; socio-economic uplift of Balochistan; establishment of shipping-related units, oil storage, refinery and petro-chemicals, export processing industrial zones and many more avenues.

Gwadar port features prominently in CPEC plan, and is considered to be a link between the ambitious One Belt, One Road and Maritime Silk Road projects. Plans for construction of the port were not realized until 2007, when the port was inaugurated by the Government of Pakistan after 4-year of construction, at a cost of $248 million. During 2015, it was proclaimed that the city and port would be further developed under CPEC at a cost of $1.62 billion, with the aim of linking northern Pakistan and western China to the deep water seaport.

This port will also be the site of a floating liquefied natural gas facility that would be built as part of the larger $2.5 billion Gwadar-Nawabshah segment of the Iran-Pakistan Gas Pipeline project (IP-gas pipeline). Presently, Gwadar Port Authority inked the MoU on behalf of Pakistan government while Chinese Construction Company inked the memorandum on behalf of Pakistan. The 19.5 kilometers Expressway will be constructed at a cost of Rs17 billion. The project will prove a milestone for making Gwadar port functional in a more effective manner. The government of China said that handling of cargo service would become possible after completion of the project.

Gwadar could emerge as a key shipping point, bringing Pakistan a much-needed income, and when combined with the surrounding areas could become a trade hub, once road and rail links connect it to the rest of Pakistan, Afghanistan, Central Asia and China.

A road from Gwadar to Saindak, said to be the shortest route between Central Asia and the sea. Economists have also mentioned that the oil and gas reserves from these could be shipped to worldwide markets by through Gwadar port.

Pakistan’s business community is waiting to contribute in the port having a free trade zone. It is also believed that the expanded port would be placed near a 2,282 acre free trade area in Gwadar, which is being modeled on the lines of the Special Economic Zones of China. The swathe of land was handed to the China Overseas Port Holding Company during November 2015 as part of a 43-year lease, while construction of the project began on 20 June 2016. The special economic zone is predicted to employ almost 40,000 people, with possibility for future expansion. The special economic zone will include manufacturing zones, logistics hubs, warehouses, and display centers. Business organized in this zone would be exempt from Pakistani income, sales, and federal excise taxes for 23-year. Contractors and subcontractors associated with China Overseas Port Holding Company would be exempt from such taxes for 20-year, while a 40-year tax holiday will be granted for imports of equipment, plant, materials, machinery, appliances and accessories that are to be for construction of this zone and port.

It is also said that the special economic zone would be completed in three phases. By 2025, it is envisaged that manufacturing and processing industries will be developed, while further expansion of the zone is intended to be complete by 2030.

Furthermore, business community of Pakistan believed that CPEC will be completed despite opposition by dissimilar influential states as it is a matter of life and death for our country now. The community see the domestic elements who are opposing the project are playing with the future of Pakistan; their worries are based on wrong notions. This corridor will benefit both Islamabad and Beijing while the dividends and benefits brought by the corridor would be shared by both countries and will definitely benefit the region. Business community also believed that CPEC would offer all-weather energy route for China from the Gulf enhancing her energy security, give her access to the Middle Eastern markets, decline the influence of India in seas, and enhance defense capability of Pakistan.

July -March 2017 Quantity (000 Tones)
Total Import 53,320
Total Export 1,925
Total: 55,245

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