FULLY OPERATIONAL GWADAR PORT REMAINS A DREAM

SYED FAZL-E-HAIDER
Oct 19 - 25, 2009

An operational Gwadar port on the mouth of Persian Gulf and opposite to the Strait of Hormuz is not only important for Pakistan but also for the entire Asian region. With a fully operational port, Pakistan will become a key player in the Persian Gulf region and serve as an energy corridor for Central Asia, South Asia, and western China. The port is expected to be a higher revenue earner in terms of foreign exchange for the country, as China, Afghanistan, Central Asian states and Russia would also be using the port where huge cargo ships up to 0.25 million tons could anchor. But, what the government has so far done for making this port operational?

Without port connectivity through rail and road links, goods cannot be transported to Afghanistan, Central Asian States, and other regional countries.

Strategically located Gwadar port in Balochistan began cargo handling from March 15, 2008. It was declared officially functional last December. Presently, three berths of the port are functional. Port of Singapore Authority (PSA), the concessionaire and operator of the port, is however still facing significant issues in making it fully functional.

In the current budget, the federal government earmarked Rs 828.81 million for the ports and shipping ministry out of which only Rs 30 million have been allocated for East Bay Expressway project that would cost Rs 3.7736 billion. Gwadar-Ratodero Road project, which will connect Gwadar port with upcountry, is also facing financial crunch for its timely completion. Mekran coastal highway is the only link, which is currently being used by a large number of trucks to transport urea and wheat from Gwadar to Karachi, as there is lack of direct links between Gwadar and the rest of the country.

The federal government plans to establish a tax free zone in the new port city of Gwadar to attract local and foreign investors. There is still found a row between the Ministry of Ports and Shipping and the Ministry of Defence over transfer of 584-acre land to the Singaporean operator for establishment of the long-awaited Free Zone. Analysts say that the Singaporean firm may take Islamabad to the Arbitration Court in London holding the Government of Pakistan accountable for defaulting on its contractual obligations under the Concession agreement signed in February 2007 in case of further delay in the transfer of said land, which is presently in possession of the Pakistan navy. On the other hand, the Ministry of Defence has refused a free-of-cost transfer of the said land to Gwadar Port Authority (GPA) for the proposed Free Zone.

In the official circles, particularly Balochistan government has criticized the PSA for not taking crucial steps to make the country's prize port on its southwest coast fully functional. They urge that accord signed in 2007 with the Singaporean firm for handling operations need to be reviewed and cancelled if it goes against the province's legitimate interests.

The Gwadar port project is vital for Pakistan, both from security and economic points of view. It is going to be the third deep-sea port in Pakistan after Karachi and Port Qasim. The port comes as a much-needed national requirement in the wake of the rise in cargo traffic at Keamari and Bin Qasim, which are operating at nearly full capacity.

The existing cargo-handling capacity at the two Karachi ports is just over 20 million tons annually, whereas the existing load of cargo at these facilities is almost 19 MTA. There is an expectation to see a dramatic rise between now and 2015. With the construction of a third port, it is estimated that Pakistan will not only be able to meet its own requirements of the future but also offer its port facilities to the neighboring countries.

In 1964, Pakistan realized the need of developing a deep-sea port along Balochistan coast. It was during Indo-Pak wars of 1965 and 1971 that the strategic planners considered development of an additional port on Balochistan coast (away from Karachi) very important from defense point of view. By virtue of its strategic location, Gwadar was considered suitable site for the development of deep-sea port on Balochistan coast.

After the collapse of Soviet Union, six independent Muslim Central Asian states came into existence. These Central Asian Republics (CARs) are rich in mineral resources, which are still untapped. Balochistan coast by virtue of its geophysical position is considered the gateway to Central Asian States. In the present scheme of the things, Balochistan coast has become the focal point of attraction for international export, import, trade, commerce and industry for the land locked Afghanistan and CARs.

By the passage of time, the idea of developing a deep-water port at Gwadar could not come out of the planning stage and hence remained in cold storage for the last three decades. It was during 90s after the first Gulf war that the idea once again resurrected in view of the rapidly changing geopolitical realities in the region.

In early 90s, the feasibility studies and design work for Gwadar port had been carried out. It was due to the financial constraint that work on the site could not start during the period. The construction work in June was started on the basis of revised PC-1.

In view of the rapidly changing geo-political realities in the region after first Gulf war, Pakistan realized the need of constructing a deep sea port at Gwadar in 1991 that would have the potential of handling traffic from the ports of Bangladesh, Sri Lanka, East Africa, Oman, UAE, Qatar, Bahrain, Saudi Arabia, Kuwait, Iran, Iraq, and the land-locked countries of Afghanistan, Tajikistan, Kyrghyzstan, Uzbekistan, Turkmenistan, and Kazakhstan.

Keeping the inherent strategic and economic benefits that Gwadar Port offered in view, the development of Gwadar Port was included in the 8th Five Year Plan (1993-98), and the technical and financial feasibility therefore were undertaken resulting in decisions for the development of Gwadar Port.

In May 1999, China showed an interest in helping out to jumpstart the construction of the port by offering financial and technical assistance. Former President Musharraf himself took the lead in seeking support of Chinese government during the worst ever economic crisis Pakistan faced following imposition of economic sanctions by United States after Pakistan conducted nuclear tests in 1998. Ultimately, the Chinese government agreed to finance Gwadar deep-water port project and its groundbreaking ceremony was performed on 22nd March in the year 2002.

From defense point of view, Gwadar port will not only reduce the dependence of Pakistan's foreign trade on the Karachi port, but it also provides Pakistan with an alternative naval base. It would be relatively a safe naval base. It would not be within an easy reach of the Indian Navy and Air Force. Realistically speaking, it enhances Pakistan's defense and strike capability against the Indian Navy in case of another war between the two states. This has actually worried India.