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Economic prospects of Gwadar deep sea port under CPEC

Gwadar Port is located in southwestern Pakistan near the Iranian border. It is situated on the shores of the Arabian Sea in the city of Gwadar, located in the Pakistani province of Balochistan. The port is located 533 km from Pakistan’s largest city, Karachi, and is approximately 120 km from the Iranian border. It is located 380 km (240 miles) away from Oman and near key oil shipping lanes from the Persian Gulf. The greater surrounding region is home to around two-third of the world’s proven oil reserves. It is also the nearest warm-water seaport to the landlocked, but hydrocarbon rich, Central Asian Republics, as well as Afghanistan.

In 2015, it was announced that the city and port would be further developed under China-Pakistan Economic Corridor (CPEC) at a cost of $1.62 billion, with the aim of linking northern Pakistan and western China to the deep-water seaport. The port will also be the site of a floating liquefied natural gas facility that will be built as part of the larger $2.5 billion Gwadar-Nawabshah segment of the Iran-Pakistan gas pipeline project. Construction began in June 2016 on the Gwadar special economic zone, which is being built on 2,292-acre site adjacent to Gwadar’s port. In late 2015, the port was officially leased to China for 43 years, until 2059.

As part of the CPEC and by extension, that of the silk route initiative, Gwadar holds pivotal importance. The port city of Gwadar is a hub of connectivity for the corridor, and an indispensable interchange for the silk route. Through its deep-sea port, Gwadar has helped China and Pakistan realize the goal of a 21st century maritime silk route, which will benefit not only China and Pakistan, but also Central Asia by becoming the region’s key entry point.

The CPEC, however, plans not to limit Gwadar to a connecting port only, but enriches it as an economic hub that will cater to the local population by improving their livelihoods. Projects planned for the Gwadar Port city aim at capacitating Balochistan to its full economic, social, technical, and energy potential, and closely integrating it within the economic framework of Pakistan and China.

Gwadar has its own significance being a major warm water deep seaport which is located at the mouth of Persian Gulf and outside the Straits of Hormuz. It is near the key shipping routes used by the mainline vessels in the region with connections to Africa, Asia and Europe and enjoys high commercial and strategic significance.

 

The economic benefits of Gwadar Port would not only be limited to the port activities like trans-shipment, containerized cargo, rather it would provide opportunities for trade with landlocked Central Asian Republics and Afghanistan; promotion of trade and transport with western China. This project would also extend peripheral benefits by unlocking the development potential of the locality and socio-economic uplift of Balochistan.

The current Gwadar Port infrastructure includes three multipurpose berths (each 200 meters long), one 100-meter service berth, 4.7 km long approach channel dredged to 14.4m at outer channel, 13.8m at inner channel/turning basin and 14.5m depth alongside berth. It has the capacity to handle 50,000 DWT bulk carriers at12.5-meter maximum depth.

Gwadar project also entails establishment of shipping-related industries, oil storage, refinery and petrochemicals, export processing industrial zones etc. A desalination plant has been set-up at Gwadar Port to supply 100,000 gallons/day of drinking water to ships calling Gwadar Port. It further includes construction of several other uplift projects like building the east-bay expressway, construction of breakwaters, dredging of berthing areas & channels, Pak-China technical and vocational institute, infrastructure development for free zone & EPZs, necessary facilities of fresh water treatment, China-Pakistan friendship hospital (up-gradation of existing 50 bedded hospital), coal-based power plant at Gwadar and construction of Gwadar international airport. Moreover, the road that is under consideration from Gwadar to Saindak would be the shortest route between Central Asia and the sea.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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