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Review of Gwadar Port

Gwadar Port (Balochistan on the Arabian Sea) is the key of the mega China-Pakistan Economic Corridor (CPEC) projects, which is said to be the main concern of economists ever since the announcement of the multi-billion dollar plan. The economists also urged that it is the second greatest monument of Pak-China friendship after Karakoram Highway linking China and Pakistan. The Port is about 630 km away from Karachi and 120 km from the Iranian border. It is placed at the mouth of the Persian Gulf, outside the Strait of Hormuz, near the key shipping routes in and out of the Persian Gulf.

The country’s experts mentioned that Pakistan’s prosperity is also connected to the development of the Gwadar Port project. In the economic survey of Pakistan FY2019, it is recorded that the government has inked a concession agreement with Singapore Port Authority International (PSAI) during 2007. But there was no considerable progress till 2013. In May 2013, the port’s Concessional Rights were transferred to the new operator viz China Overseas Ports Holding Company Limited (COPHCL). Since the concessions were handed-over to COPHCL, it has been working on improving port facilities, surrounding environment and port businesses.

Statistics in the survey also showed that the port operator had invested greater than $40 million for port facilities up-gradation. This is now totally operational and receiving commercial vessels on regular basis since March 2018.

Historically the development of Gwadar Port marked through the initial feasibility study held during 1964 and revised further in era of 90s. Thereafter, Gwadar Port Cell was organized. It is also recorded that basic development started on the East bay and West bay when PC-1 approved during 1999. China funded in 2000 for this development. By 2005-6, major infrastructure counting road from Karachi to Gwadar completed. Gwadar free zone (GFZ) is significant milestone for local development which has glorified the city in eyes of global financiers and business enterprises. In GFZ, there is feasibility for establishment of food processing industry, iron and steel and clothing, building material, cement products, marine industry, petrochemical industry, assembly plant, fish processing, oil manufacturing, other manufacturing, and furniture.

The condition for all industrial units to maintain clean and green environment will also help to sustain the infrastructural and technological advancements. Different sources also recorded that a Chinese company is taking care of GFZ as it is a Pilot Zone, and the company is implementing policy for solid/liquid waste management to sustain clean and green environment. To provide un-interrupted energy to businesses there are projects for energy generation in Balochistan from a mix of sources. Coal power plant is planned for Gwadar too as it is comparatively less expensive source of energy. International ports like Dubai and Chabahar are competitors of Gwadar Port, however, along with other incentives vicinity and good connectivity distinguish Gwadar port among others.

 

The economic survey of Pakistan also recorded that the construction of Free Zone Phase-I has been completed with all infrastructures, counting power, water, road, telecommunication, waste treatment, drainage systems are now in operation. Greater than 30 enterprises, involving the fields of banks, insurance, financial leasing, hotels, warehouses, fishery products processing, edible oil processing, pipe, furniture manufacturing, electric vehicle assembly, trade and logistics, have already been registered in Free Zone. Work on the main Free Zone on 2,220 acres of land will be started soon for which China Port Holding Company (COPHC) has completed the master planning and feasibility work.

Statistics also showed that Gwadar Port has handled last year almost 7.156 Metric Ton cargo from 53 ships. The Chinese Operator is working on increasing the number of ship calls at the port. Two ship-liners (COSCO & Sino-Trans) are calling frequently at the port. From 7th March, 2018 weekly container service has been started by COSCO.

On the other hand sources reported that China obtained sovereign guarantees to the port facilities and contributed $198 million for its first phase, four times the amount contributed by Pakistan. China then invested in a highway connecting Gwadar to Karachi, providing almost 450 engineers for the project. The port offers China a transit terminal for crude oil imports from Iran and Afghanistan. It allows China to diversify and secure its oil import routes while gaining access to the Persian Gulf. As China receives 60 percent of its energy supplies from the Middle East, it is concerned about the American presence in the Middle East, which could disrupt energy supplies in a crisis. The experts mentioned that Gwadar’s location at the mouth of the Persian Gulf is worrying in the context of a conflict with Iran. Meanwhile, Iran is concerned that the port could erode the significance of its ports for Central Asia and Afghanistan, particularly Chabahar port, which India is helping to develop as a counter to Gwadar Port. Competition between the two ports could increase Pakistan-Iran rivalry where relations between them has been deteriorating since the 1990s.

Conclusion

No doubt, the Gwadar Port presents Pakistan with an opportunity to capitalise on the Sino-Pak friendship while gaining strategic leverage in its dealings with India and the US. It needs to integrate the alienated Balochis by offering them a stake in Pakistan’s economy, whereby they could only benefit from the development that Gwadar will bring to the region.

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