GWADAR SEAPORT

A sign of Triggered and Prosperity

MUHAMMAD AQEEL KHAN, Research Associates
May 28 - Jun 03, 2007

The Gwadar project will be changed the face of the earth and the destiny of Balochistan when the Port starts functioning as it will generate fabulous trade and economic activities in the area, that it will turn the area into a special economic zone where banks will open their branches, five star hotels will be built, offshore banking will begin, factories, warehouses and storage will be set up, and the tourism industry will be promoted in the area. An export processing zone will be set up making Gwadar a regional hub of trade and investment activities, a very attractive place for direct foreign investment.

GEOGRAPHICAL STRATEGY

By virtue of its excellent location Gwadar is located in the middle of three important regions of the world: the oil-rich Middle East, heavily populated South Asia and the economically emerging and resource-rich Central Asia. An alternative to Persian Gulf ports and a gateway to Central Asia, a new addition to the potentials of the project are to be an energy corridor for China. China is projecting its strength across the subcontinent through its tactical presence at the Gwadar Port project. Construction of the port began in March 2002 after the Chinese agreed to provide $198 million of the $248 million required for Phase I of the project port.

GROWTH AND SOCIO-ECONOMIC IMPORTANCE

Gwadar Port is expected to generate billions of dollars in revenue and create two million jobs. The port would also lead to the development of heavy and large-scale industries, petrochemicals and manufacturing sector. It will serve as an economic and trade Transit Avenue for Pakistan, Afghanistan, and Central Asia and Middle East countries. Free economic zones would be set up near the port that would help harness vast potential in natural resources of the area. Gwadar today has numerous hotels and motels, including a five-star hotel overlooking the Arabian Sea and the Gulf. The place has rich potential for tourists, from not only Pakistan, but also abroad.

FINANCIAL AID

The government of Pakistan will receive revenues from the PSA over a period of 40 years. The investment, revenues and income received from Gwadar Port's entire operations are between $23.6 billion to $42.2 billion. The government expects $5 billion to $8 billion foreign investment in the area of multi-purpose (MP) terminal and related equipment's to cost PSA at Gwadar Port which would be $1 billion to $1.5 billion; container terminal and others $2 billion to $4 billion; the cost of Free Zone development $1.5 billion to 2.5 billion; while the marine services and others would cost $0.5 billion.

NAME OF THE EXPECTED REVENUES PARTY/SECTOR
($ billion)

CHC, Concession-holder company

17-30

Containers & others

10-18

Free Zone

3-6

MP Terminal & others

4-8

ADMINISTRATION AND FUNCTION

The operation and management of the port has been handed over to the Singapore Port Authority (SPA) under a 40-year agreement between the Gwadar Port Authority (GPA) and the Concession Holding Company (CHC) a subsidiary of the SPA that is operating 22 ports in 11 countries. The Port can currently handle bulk carriers of up to 50,000 DWT through its three berths. A 5 km long channel, 14.5 meters deep and being close to the shipping lanes, the cargo ships will spend lesser time entering and leaving the Port. This port had been declared tax-free for 40 years and it is estimated that almost 50 million ton cargo would go through this port in next 10-15 years.

FACILITIES

PROJECTED

Quay length (m)

602

Area (ha)

15

Depth at Chart Datum (m)

14.5

Quay cranes

2

Portal cranes

5

Designed capacity ('000 TEUs)

500

SALIENT FEATURES

The next 10 year would not only make Gwadar port operational on modern lines but also attract Foreign Direct Investment in other sectors, to give incentives like tax holiday to corporate income for 20 years, exemption of import duties on materials and equipment for construction and operation of the port and development of Free Economic Zone for 40 years.

TRAFFIC FORECAST AT GWADAR PORT

CARGO

UNIT

2005-06

2007-08

2009-10

ACGR* PERCENT

GENERAL CARGO

Local Consumption

Million Tons

0.36

0.42

0.48

7.46%

Transit Trade

Million Tons

-

0.68

0.71

2.03%

DRY CARGO

Local Consumption

Million Tons

0.33

0.38

0.45

8.63%

Minerals

Million Tons

-

0.44

0.52

8.71%

LIQUID BULK

Local Consumption

Million Tons

0.06

0.07

0.09

12.28%

Storage / Distribution

Million Tons

   

5

 

Containers

Nos.

-

264

307

7.91%

ACGR= Annual Compound Growth Rate
SOURCES: Ministry of Planning and Commission