Port of Pros­per­ity

Pak­istan is to­day look­ing at a mega de­vel­op­ment pro­ject that could prove to be a game-changer in the re­gion.

Southasia - - CONTENTS - By Sam­ina Wahid

The Port of Gwadar lo­cated on the south­ern coast in Balochis­tan (Pak­istan’s largest province) has im­mense geo-strate­gic sig­nif­i­cance since it fa­cil­i­tates the three most com­mer­cially sig­nif­i­cant re­gions of the world – the Mid­dle East, Cen­tral Asia and South Asia. The Balochi word Gwadar means ‘Doors of Wind’, It started as a small fish­ing vil­lage but to­day it has de­vel­oped into a deep­wa­ter port that will have the po­ten­tial to be­come a strate­gic trad­ing epi­cen­ter very soon. Gwadar is lo­cated at the face of the Ira­nian Plateau and is a door­way to the oil rich Per­sian Gulf. It also gives easy ac­cess to the nat­u­ral re­sources of the Cen­tral Asian States. Through Gwadar, Pak­istan can take ad­van­tage of its geostrate­gic lo­ca­tion and fur­ther de­velop its sta­tus in the in­ter­na­tional com­mu­nity.

What makes Gwadar so spe­cial? It has deep with a warm wa­ter coast over­look­ing three dif­fer­ent re­gions. When fully op­er­a­tional, it can be used as a sig­nif­i­cant trade cor­ri­dor. This is why the de­vel­op­ment of Gwadar port has re­ceived the at­ten­tion of in­vestors not only in Pak­istan but also from all over the world, par­tic­u­larly Cen­tral Asia, Afghanistan, China, Ja­pan and Sin­ga­pore. The chal­lenge is to make vi­able strate­gies, pro­grams and poli­cies and ef­fi­cient de­ci­sions to con­vert Gwadar into a com­pre­hen­sive and com­pet­i­tive pro­ject.

Ear­lier, the US played a key role dur­ing Pervez Mushar­raf’s gov­ern­ment in hand­ing over the de­vel­op­ment of Gwadar Port to the Port Au­thor­ity of Sin­ga­pore (PAS), deny­ing China

a chance to have ac­cess to a warm wa­ter, deep-sea port on the Ara­bian Sea just op­po­site the Gulf of Oman, an im­por­tant route for oil tankers go­ing from the Per­sian Gulf to Ja­pan and western coun­tries. The port can serve as a gate­way to the Strait of Hor­muz and can com­pete with UAE ports by im­prov­ing ex­ist­ing links to the Caspian re­gion and pro­vid­ing a bet­ter trade route to the land­locked re­gion.

Sadly, how­ever, the port oper­a­tions by PAS did not pro­duce the ex­pected re­sults since the lat­ter failed to make the port prop­erly op­er­a­tional, caus­ing a loss of bil­lions of dol­lars in port and cargo han­dling as well as freight on the im­port and ex­port of goods. Later, the con­trol of the port was given to Chi­nese author­i­ties and an agree­ment was signed with the China Over­seas Port Hold­ing Com­pany in 2013 that trans­ferred op­er­a­tional rights from PAS.

Soon af­ter­wards, a mas­sive cap­i­tal in­jec­tion was made by the Chi­nese au­thor­ity to ex­pand the port and de­velop sev­eral energy projects. Un­der the Early Harvest Pro­gramme, China will pump some $46 bil­lion by 2017 into a host of projects in­clud­ing coal, so­lar and wind energy units. An in­vest­ment of $35 bil­lion is an­tic­i­pated in energy schemes, which will gen­er­ate 23,000 megawatts. The La­hore-Karachi Mo­tor­way, ex­pan­sion of the Gwadar Port and in­te­grated in­fra­struc­ture de­vel­op­ment in Gwadar will bring a fur­ther in­vest­ment of $11 bil­lion.

The fact is that Gwadar Port’s de­vel­op­ment could pro­vide some much-needed re­lief to the un­der­de­vel­oped province of Balochis­tan where ram­pant un­em­ploy­ment and the ab­sence of proper in­fra­struc­ture is caus­ing un­rest. De­spite be­ing the first gas pro­duc­ing province of the coun­try, poverty is per­va­sive there and sev­eral ar­eas still don’t have any gas. Many coun­tries to­day eye this oil, gas and met­als rich province which has an im­por­tant geopo­lit­i­cal po­si­tion in the re­gion. Of the planned Chi­nese in­vest­ment, Balochis­tan has a share of 38 per cent aimed at gen­er­at­ing eco­nomic ac­tiv­i­ties in­clud­ing in­fra­struc­ture de­vel­op­ment, cre­at­ing jobs for the lo­cals and bring­ing an end to anti-state ac­tiv­i­ties.

Mean­while, Gwadar Port will help save mil­lions of dol­lars in de­mur­rage costs for im­porters since oil sup­pli­ers and sev­eral other com­pa­nies are pay­ing a huge amount in de­mur­rage charges to ship­ping com­pa­nies at the two ports in Karachi. This is mainly be­cause of con­ges­tion at both the main Karachi Port and at Port Qasim where ships are of­ten re­quired to wait for sev­eral days be­fore they get a berth.

De­spite its on com­pet­ing port at Chaba­har, just a few hun­dred kilo­me­ters from Gwadar, Iran has also shown an in­ter­est in the de­vel­op­ment of Gwadar, ex­press­ing a de­sire to set up the world’s largest oil re­fin­ery there with ca­pac­ity of 400,000 bar­rels per day at a cost of $8 bil­lion. It has also ex­pressed in­ter­est in es­tab­lish­ing power plants at the port. Sadly, how­ever, US pres­sure against the Iran-Pak­istan pipeline led to de­lays in the re­fin­ery pro­ject which could have easily met Pak­istan’s oil needs – in fact, there could have been enough sur­plus for ex­port to China. The lat­ter meets 50 per cent of its oil needs from the Mid­dle East -- the sup­ply line runs to China over 10,000 km through the Dubai-Shang­hai-Urumqi route. Had the oil re­fin­ery at Gwadar been set up, the re­fined crude oil could have been ex­ported to China through the short­est pos­si­ble route – Dubai-Gwadar-Urumqi – span­ning about 3,600 km. For this, an oil pipeline has been pro­posed through the energy cor­ri­dor up to western China via the Karako­ram High­way and the Khun­jrab By­pass.

As part of the Pak-China Eco­nomic Cor­ri­dor that will turn Pak­istan into a hub of re­gional co­op­er­a­tion, the Gwadar Port will be con­nected through road, rail and fi­bre­link to China to en­hance trade be­tween the two coun­tries. Oil and gas pipe­lines are also a part of the cor­ri­dor over the long run, which will boost eco­nomic ac­tiv­i­ties in Balochis­tan.

Work on the port has re­ceived a boost af­ter the ini­ti­a­tion of CPEC (China-Pak­istan Eco­nomic Cor­ri­dor) which is a de­vel­op­ment megapro­ject aimed at con­nect­ing the Pak­istan coast­line to China’s north­west­ern au­ton­o­mous re­gion of Xin­jiang, via a net­work of highways, rail­ways and pipe­lines to trans­port oil and gas. And Gwadar Port is the cen­tre point of this pro­ject.

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