A silent revolution is ready to spring out in the
communication sector of the country from the deep drafted sea port of
Gwadar which in the making.
The most prestigious project of Gwadar Port will
not only be a significant addition in the port and shipping sector of
the country but is bound to entail a multi-directional network of road
communication within and outside the country.
The development of Rail, Road and Sea communication
originating from Gwadar in all directions is expected to generate
tremendous economic activities in the areas so far remained neglected
due to lack of communication access.
To bring Gwadar close to the national mainstream, a
700 km long Mekran Coastal Highway is in advanced stage of
implementation. It will link Gwadar with Pasni, Ormara and Karachi.
Another regional linkage is the Gwadar Ratto-Dero motorway joining it
with Indus Highway through Turbat, Awaran and Khuzdar. A rail link is
also planned to connect Gwadar to Quetta and Zahidan. Civil Aviation
Authority has also undertaken plans to upgrade the existing length of
runway from 5,000 ft to 15,000 ft for operation of wide bodied jet
air-crafts. The improved aviation facilities will be available for use
by the end 2004.
Gwadar Port would provide the shortest possible
access to the landlocked Afghanistan and Central Asian Republics and
Pakistan would immensely gain from the project.
Located at the entrance of the Persian Gulf, some
460 km from Karachi, Gwadar has had immense Geo-strategic significance
on many accounts.
The continued unstable regional environment in the
Persian Gulf in particular as a result of the Iran/Iraq war, the Gulf
war and the emergence of the new Central Asian States has added to
In view of the Geo-strategic importance of this
forthcoming project, the economic managers are looking for the
enormous economic benefits soon after the development of Gwadar Port.
These benefits are including capitalization on
opportunities for trade with landlocked Central Asian States and
Afghanistan. The forthcoming port will help promoting trade and
transport with Gulf States. The project will be instrumental for
promoting trans-shipment essentially for containerized cargo besides
unlocking the development potential of hinterland.
The port is currently on its way to completion and
according to informed sources the first phase of the project is likely
to be completed in the first quarter of 2005.
The first phase of the project is being developed
at cost of Rs.14.9 billion (US$. 248/- million). Under the plan the
construction time was estimated 36 months that means that the first
phase should be operational by March 2005, however, the day and night
efforts of the Chinese experts indicate that the project may go into
operation much earlier than expected.
The first phase of the port includes construction
of three multipurpose 602m long berths besides construction of a 4.5
kilometer long approach channel dredged to 11.5m to 12.5m. This highly
impressive national project also includes the development of a turning
basin of 450m dia and one 100m service berth.
Related port infrastructure and port handling
equipment and pilot boats, tugs, survey vessels are also included in
the first phase of this project.
Gwadar port is being equipped with the essential
port handling equipment and other infrastructure required for smooth
operations of a modern port. On completion of Phase-I, the Port will
handle Bulk Carriers of up to 30,000 DWT and Container Vessels of
Second phase of the Project is planned to be built
on BOO/BOT basis at an estimated cost of US$ 600 million. It will
comprise of 9 additional berths including 4 container berths, one bulk
cargo terminal having a capacity to handle 100,000 DWT ships, one
Grain terminal, one Ro-Ro terminal and two oil terminals to handle
200,000 DWT ships. When completed, the second phase would help
reducing congestion at Port Qasim.
Considering the Geo-economic imperative of the
regional changes, the Asian Development Bank's (ADB's) Ports Master
Plan studies considered an alternate to the Persian Gulf Ports to
capture the transit trade of the Central Asian Republic (CAR) as well
as the trans-shipment trade of the region.
Both Karachi and PQA were considered for such
development but were found unattractive to major shipping lines due to
the remoteness from the main shipping routes, the limitations of draft
for mother ships and large bulk oil carriers and the comparative long
turn around times. The ADB studies, however, considered Gwadar to have
the most advantageous location for such an alternative port in the
region, which could handle mother ships and large oil tankers in due
Keeping that aspect in view as well as the inherent
strategic and economic benefits that Gwadar Port offered, the
transport plan of the 8th Five Year Plan (1993-94) of Pakistan
included the development of Gwadar Port as an essential element of its
aims and objectives. Technical and financial feasibilities therefore
were under taken resulting in decisions for the development of Gwadar
The Project started on 22 March 2002, is on fast
track and is expected to get ready prior to its schedule time i.e.
In fact it would surprise many that with initiative
and calculated risk, the port started receiving merchant ships since
Jan 2003 and have been able to off load hundreds of tones of cargo
imported for the Project, thus saving precious time and money which
otherwise is required for transportation of the same cargo by road
from Karachi/PQA to Gwadar.
Phase II of the project involves construction of
more berths on BOT basis including two container berths, one bulk
cargo terminal, one grain terminal with a capacity of handling vessels
up to 100,000 DWT, one roll on/roll off terminal, two oil piers for
vessels up to 200,000 DWT and future expansion of two container
berths. On completion of the project, Gwadar Deep-sea port would be
one of the world's most strategically located ports in this part of
On successful completion of Phase-I, it is
anticipated that the private sector would come forward to invest in
the second phase of the Project. It is envisaged that the complete
development of such a mega project will take 8-10 years depending on
the active participation of the private sector.
COST OF THE PROJECT
Total amount equivalent to Rs 14.9 billion (248
million US dollars) were approved by ECNEC for Phase-I of the project.
The financial agreement for development of Phase-I was signed with the
Government of China on 10 August 2001 under which the Chinese will
provide US$ 198 million. While the Government of Pakistan will provide
US$ 50 million.
China's total financial assistance of $198 million
in this project includes grant of $18 million, another grant
assistance worth $31 million, interest free loan worth $31 million,
concessional loan worth $58 million, Buyer's Credit $60 million.
Pakistan will be spending Rs300 million ($50
million in local currency. Additional development costs were also
envisaged for Electrical Supply 132 KV Transmission Line from Turbat
to Gwadar at an approx cost of Rs.360.00 million and a Railway line
from Gwadar-Panjgoor-Dalbandin (515 Km) at approx cost of Rs.8,500
million. This is, however, not a part of the sanction to the Gwadar
Port Development Authority.
The Chinese have mobilized 450 personals from China
and hired 512 Pakistani workmen as per following detail:
The design and construction of residential
buildings and civil works of various port operation buildings and
related infrastructure development being carried out by Pakistani
contractors and firms out of the US dollars 50 million allocated for
the Project. Award of contract for the construction of residential
area was approved by the MOC in June 2003 and the Contractor has
already fully mobilized and a construction activity has started.
Concurrent with the Port development a Master Plan
of Gwadar has been approved by Balochistan Government through NESPAK
and which has been a hot topic of discussions at various forums.
Implementation of the Master Plan was in fact the responsibility of
Government of Balochistan. However, no headway has been made so far
which is a matter of concern.
The business community from all over the country is
taking keen interest in the development of this port city despite
restrictions imposed by the government of Balochistan in land
transactions, transfers etc, the expected business attracting the land
brokers at a massive scale who are busy in buying and selling of the
Consequently, the prices of land adjacent to the
port area have taken a quantum jump which proved a windfall for the
native people having property rights in this future port city. The
Government of Balochistan had recently announced establishment of
Gwadar Development Authority, however, it has not started working yet.
It is the need of the hour that the concerned authorities should take
immediate steps for land management in a way that the genuine
investors could buy land at an affordable price. There is an urgent
need for an effective check on speculative land transactions to keep
the land prices at an affordable level which highly important to
The following business potentials have been
identified in the Master Plan of Gwadar Deep Sea-port Project:
Increased trade to and from Balochistan and Iran.
Trade potential from Central Asian States through Afghanistan.
Transit cargo (liquid and dry bulk)
Development of warehousing and assembly industries (EPZ)
Oil storage, refineries, petrochemical industries etc.
Handle the shipping traffic of the region.
Gwadar Master Plan envisages development of about
18,600 hectares of land for this project. The port is being developed
over an area of 400 hectares. An export processing zone over 74
hectares located on land adjacent to the port in East Bay. A special
Industrial Zone of about 4000 hectares lying to the north of the town.
An oil refinery of 1000 hectares located to the north east of the
town, linked to proposed oil terminal by an underground pipeline
across East Bay. A residential area over 400 hectares stretching North
of the existing town along West Bay.
Some of the evident investment opportunities in the
newly developed port city are identified in the areas of
infrastructure development including internal roads and services,
water and power and communication services for the new township and
the industrial zone. Private-owned Ware Houses and Cold storages.
Private cargo handling equipment and trucking yards. Corporate
Infrastructure i.e. offices for operating firms and agencies.
Development of Commercial and residential areas and buildings. Labor
related amenities for thousands of workers employed on developmental
work. Development of Hotels, Motels, Hospitals, colleges and Schools.
Tourism related industry, marine fuel bunkering for visiting ships to
include large fuel storages and mobile barges etc. Oil refinery and
large oil storages. Ferry services between Gwadar-Karachi/Oman/Bunder
Abbas and UAE. Industrial Export Processing Zone, Hinterland road, 735
km long Gwadar-Rattodero Expressway which will pass through
Turbat-Awaran-Khuzdar and Shahdadkot.
Improvement of existing Gwadar-Quetta road via
POTENTIAL PROJECTS AT GWADAR PORT
Gwadar being unexplored territory till to date as
far as business is concerned; a lot of business activities are
possible. There are numerous businesses that offer sizeable profits
for the investors in Gwadar. The potential business areas identified
as fish processing, crabs processing, cold storages, ice factories,
seawater reverse Osmosis desalination plants for profitable purpose,
shrimp farming, training services in fisheries and aquaculture, port
management projects, hotels and restaurants and resorts, date
processing, canned food, gravel crush plant, water sports center and
recreation facilities, oil palm oil cultivation which Government of
Balochistan can provide land on easy terms and marine and automobile
repair workshops, cluster for Internet service providers, renewable
energy, wind, solar and IPPs, clearing and forwarding agency, hospital
clinics, re-rolling mills, warehouses, boat building and naval
architecture institute, oil storage tankers, ferry service for Karachi
Ormara-Pasni-Gwadar and up to Oman and Dubai.
Rashid Soorty, a leading business leader feels that
Pakistan should go one step further to offer China Gwadar free zone
for promoting joint ventures between China and Pakistan. Citing the
example of Singapore which assisted Indonesia to develop Batam Island
and contributed to its infrastructure by building roads,
communication, power generation etc. A large number of all types of
industries are set up at Batam Island most of these multinational
industrial projects are export-oriented and all of them are working in
full swing earning huge foreign exchange for Indonesia.
China can assist provincial government to provide
technical assistance and expertise for setting up of joint ventures or
investment by financially sound Pakistani entrepreneurs. This will
fill up the 'missing link' in our export shortcomings. Pakistan should
give preference to those investors who either go for joint venture
with China or other countries with an objective for speedy
industrialization and growth of our export.
The incentive to investors should be to avail land
at Gwadar free zone for a lease period not exceeding 30 years,
renewable on the condition of successful running of the project. The
initial lease should be for 3 to 5 years to make it obligatory on the
part of investors to come up to its commitment as outlined in
feasibility of the project and should be ready to forsake their right
if failed to implement their program on dot.
Government of Pakistan has reportedly agreed to
lease out land to UAE at Gwadar for the establishment of shipping
companies and other related trade activities. It is not known how much
land will be allotted to UAE but it is quite evident that the most
precious land near the sea port will be asked for by UAE for shipping
Ports in UAE are already developed and the
objective of asking for land at Gwadar appears to be to monopolize
shipping industries in the Gulf States which may prove a set-back to
develop our own marine and shipping industry in Pakistan.
Joint venture by Pakistan investors particularly in
the field of shipping should have priority and government may
re-consider UAE asking for leasing of Gwadar land for same purpose.
Pakistani government make it obligatory on the part of our investors
to come with viable project proposals for investments considering the
merit of each project purely from the point of economic consideration
and its fulfillments as outlined in feasibility, our country can march
towards industrialization rapidly and provide new hi-tech industrial
projects with huge investment in Balochistan province exclusively for
stepping up export and shipping. This will further provide avenues for
utilization of country's vast potential of mineral, oil and
Government has also been considering providing land
to small and medium enterprises. The criteria for putting up small and
medium industries should be the same as outlined above i.e. priority
to genuinely planned small industries that have adequate funds
available from self resources or manage to borrow up to 50% from DFI
against sound collaterals. All proposals must be accompanied by
guarantee to go into production as there is no room to absorb any more
sick units on their failure to implement the scheme. It is imperative
that investors must contribute minimum of 50% investment to ensure
that the unit is viable, sound health and means to survive for long
and not intended to exploit government's confidence placed in them.
To ensure that products of all major, small and
medium industries have marketing potentials, government must undertake
extensive exercise by alerting our Consulates and Embassies abroad to
provide feed-back on marketing potentials in those countries they are
serving Pakistan's interest and also ensure that golden track of
Gwadar land has absolutely unmatched return.
Despite the fact that Gwadar is comparatively free
from the tribal influence, however, people of the area have two major
concerns perturbing their minds. Firstly they feel that influx of the
population from rest of the country may through them in minority.
Secondly, the local population lags in education and other skills,
they have a fear that the major share of the economic opportunities
may be grabbed or snatched by the people coming from other parts of
the country. Some elements with vested interest are taking advantage
of the situation and are out to blow things out of proportion. There
is an immediate need to win the confidence of the local population by
giving them examples of other parts of the world like Dubai, Sharjah
or even for that matter of the European and the United States where
people have got together from different parts of the world, yet the
local population of those areas was least bothered with the presence
of the people of different cast and creed as the lions' share out of
the prosperity goes to the people of the relevant area.
Currently, local population is living in an
organized way mostly in semi-pucca houses. In order to get them
involved in the development process, there is a need that the
development authorities should developed low cost but decent housing
scheme equipped with all basic civic facilities. This uplift in their
living standard would sure to give them a taste of the economic
prosperity which is yet to come after development of the city and the
port. Winning confidence of the local people is more significant to
make Gwadar a jewel in the crown of the national economy.