Gwadar The Future of Pakistan:
Gwadar deep seaport undoubtedly retains a significant role in the future economic boom of Pakistan, particularly in the wake of the trade potentials of the Central Asian Republics. The foreseeable rapid development of western China will create tremendous economic and trade enterprises. Gwadar was selected as an alternative seaport, since port Qasim did not have the capacity to accommodate the expected load.
Gwadar’s location, at the entrance of Strait of Hormuz, provides enormous economic opportunities not only to Pakistan but to other regions also, like the Central Asian Republics, Middle East, South Asia and Gulf States. However, the prevailing non-conducive security environments and instable political situation in Pakistan are of grave concern to the project’s completion. The implications erupting for regional and outer powers are fragile and need to be handled carefully, owing to its immense geo-strategic significance. Albeit, the site of Gwadar was identified in 1964, however, technical and financial feasibilities that commenced as late as 8th five year plan (1993 – 97) included the development of Gwadar port. In 2001, the proposal turned to a miraculous realty when China finally agreed to undertake the onerous project of construction and development of Gwadar project. Resultantly, in March 2002, the Chinese Vice Premier Wu Bangguo laid the foundation stone of the deep seaport. As envisaged in the master plan, it was to be undertaken in two phases. Phase one includes three multi purpose berths which have the length of 600 meters, 4.5 kilometers long approach channel dredged to 12.5 meters, turning basin of 450 meters diameter, one service berth of 100 meter length and related port infrastructure and equipment etc. It is pertinent to mention that the port shall operate smoothly, just like a modern port. The ports having completed phase one can handle bulk carriers of 30,000 dead weight tons (DWT) and container vessels of 25,000 DWT. Phase two of the project will comprise of nine additional berths which include four container berths, one bulk cargo terminal capable of handling 100,000 DWT ships one grain terminal and two oil terminals to handle 200,000 DWT ships.
This reflects that a revolutionary economic sector growth in the country is in the offing as the project is not only related to the shipping sector, but would also entail multidirectional networks of motorways and rail communication. The evident international economic prospects include trade opportunities with the Central Asia and Gulf and trans-shipment of containerised cargo. The economic uplift of Balochistan is not too far off either as the influx of human resources would be directed to Gwadar instead of Karachi. The ship related industries would spring up and export processing and industrial zones would be established. The oil storage, refinery and petrochemicals would be an obvious functionary. The allied infrastructure would involve internal roads, hospitals, education institutions, warehouses, commercial and residential areas and office buildings. The corporate infrastructure would include hotels and motels, cargo and trucking yards, shipyards, dry docks and bunkers for ships. Above all, labour related opportunities for thousands of skilled and non-skilled workers would reduce unemployment in the country in general and Balochistan in particular, to a reasonable extent.
The oil reserves and natural recourses of the Central Asian states have become the focus of world’s attention; our geographical location in the proximity of Central Asia gives us the opportunity to become one of the vital export corridors in the region. Our western coastline is at the crossroads of international sea lines of communication; in addition we have other potential port sites along our coast. In the absence of visionary planning to develop Gwadar earlier or owing to other un-avoidable reasons, Pakistan missed the scope of an international harbour. The major commercial centres with bulk port facilities came up in the region elsewhere; however, the gulf had the added advantage of the discovery of oil. The Central Asian states would definitely prefer the Pakistani port because except the Iranian ports, specifically the Chah Bahar, other gulf ports are on the opposite side. The Central Asian states should opt for the economically viable, cost effective and shortest route to the Arabian Sea for transit and pipe line routes. Pakistan is situated at the interface of Central Asia and South Asia thus provides the shortest route to the land locked states. India too announced to construct railway lines connecting Central Asia, however for geographical reasons the proposal could not materialise, hence the possibility of any secured transit route is through Pakistan. The sea lanes from the Persian Gulf could be monitored from a strategic point of view, as Gwadar lies astride the sea lanes originating from the strategic choke point of Hormuz. The Indian Ocean trade routes of far eastern countries could be overseen as well. Pakistan could utilise Gwadar as an alternative Naval base to prevent any blockade by the Indian Navy, as experienced in the 1971 war and the Kargil crisis. The strategic depth to Pakistan maritime assets commercially and militarily would be an additional benefit.
Now, the question arises that whether the prevailing environment in Pakistan is conducive for the mega project. The vast expanse of tribal land, inadequate security, sardars and nawabs oriented tribal clans, rampant smuggling of narcotics and weapons and nationalist activists have weakened the government’s writ in Balochistan. The law and order situation worsens intermittently; the foreign elements covert intervention is another contributory factor. These factors are likely to grow, if economic affluence of Gwadar is not shared visibly with locals as the province suffers from socio-economic backwardness. The government’s neglect and exploitations have diminished the national sprits of the inhabitants of Balochistan, harbouring ill feelings particularly against Punjab. The educated youth is unemployed, rather are hostages at the hands of sub-nationalists. Job opportunities in the province are otherwise bleak owing to numerous reasons, yet the Frontier Corps Balochistan (Civil Armed Force) is amazingly devoid of local recruitment. The enrolment in Frontier Corps alone could get thousands of jobs. Gwadar promises new jobs, but are the young Balochis skilled enough to seek employment and have the requisite know how? As compared to the other provinces of Pakistan, the Balochis feel caste away, neglected and deprived. They opine that they do not get their due share of socioeconomic benefits in the backdrop of rich national resources. The rifts between Federal and Provincial governments have aggravated the situation in the past. Military actions in the provinces also have had repercussions. The killings of Nawab Akbar Bugti and other young Mari tribal chiefs will not be forgotten easily nor will the situation return to normalcy soon. The centuries old sardari and nawabi system is indeed a major hurdle in the prosperity and well being of the common populace, who are exploited by sardars. The allegiance of tribesmen to their tribal chiefs would always resist any attempt to abolish this system. The establishment of cantonments is seen as attempts to eliminate the sardars, hence is opposed and widely criticised. The natural gas issue and its royalty issue have further added to the sense of deprivation of the masses.
The nationalists of the province have shown serious reservations on the Gwadar project and the proposed construction of military installations at the behest of foreign elements whose interests are visible. Their misconceptions that the employment of people from other parts of the country would turn the Baloch into a minority and usurp the natural resources of the area are dichotomies. Their other political concerns encompass the construction of cantonments that perhaps in their opinion would control the wealth of the province.
Non-Baloch settling in Gwadar or elsewhere in Balochistan should not exercise the right of vote. They would not be allowed to be domiciled in Balochistan so that the Baloch are not turned into a minority. Only the local population of Balochistan should be trained and employed for the Gwadar project. The control of the project with the federal government would benefit Punjab elites; thus it should be with the provincial government.
The provincial authorities should be authorised to have direct economic ventures with the foreign investors. These demands envisage maximum benefits to Balochistan but these have to be viewed from a different perspective and need to be resolved accordingly, as the clandestine motives of foreign players are no more a secret.
Despite the negative propaganda and the killing of three Chinese engineers in May 2004, the project seems to have progressed steadily.
The Balochistan Liberation Army (BLA) had claimed responsibility of this heinous incident. In case more Chinese are targeted in future, China might abandon the project and that would cause inexorable burden on Pakistan’s economy. The nationalist activists intimidate the non-Baloch workers in an attempt to scare them away and force the government to employ only locals. To hamper the project and to coerce the investors, bomb and rocket attacks are used; as this is a common phenomenon resorted to by the insurgents.
The dissident tribal men can create law and order situation to undermine the writ of the government. Resultantly, local and foreign companies would go away. The elements with vested interests can resort to strikes and create a situation of unrest, as has been witnessed on countless occasions in the past. The political parties can stage anti-project rallies and agitation on account of the so-called subjugation of the rights of the Baloch. Political unrest shall have devastating effects on the ongoing project.
Countries like Iran and India have their economic interests associated with the Gwadar port; especially India, as it is exploiting the dissident elements and nationalist leaders of Balochistan to impede the project through acts of terrorism. Similarly, the Kalabagh Dam project had been maligned by India through malicious designs and has finally succeeded in strangulating the energy and agriculture sectors of Pakistan. Dwelling on the global interests, concerns of regional and extra regional powers and their implications, despite all accruing advantages, Gwadar may not auger well in the economic, military, and political interests of many countries.
China’s overwhelming involvement in the mega project and the possibility of Chinese naval presence would not be liked by the US. A protracted resistance is, therefore, increasing the security concerns of Pakistan, relating to the Gwadar Port project. The foreseeable foothold of China in the Arabian Sea is a source of concern for the US because Malacca Strait, through which the Chinese oil vessels pass, is already controlled by the US, owing to her presence in the Gulf.
In case of any conflict in the future, China fears that the US would choke off its supplies. The US desires to be involved in Gwadar because a short route being developed towards the Arabian Sea would consolidate its hold over Afghanistan; therefore, Balochistan is being focused on by the US. Pak-China collaboration has endangered Indian interests in the region, as any economic or military development of Pakistan causes inexplicable annoyance to India. She has, therefore, formed a strategic alliance with Afghanistan and Iran as a counter measure. India is anxiously looking forward to a shorter transit route to Afghanistan and Central Asian states through Iran.
Indian efforts to keep Balochistan simmering with law and order problems are evident from her patronage of exiled dissidents and in home nationalists. Iran would not like monopoly of Gwadar as the main route to sea from Central Asia via Afghanistan, since Iranian port Chah Bahar is also equally viable; the project is likely to confront competition from Iran. Iran and Turkey are interested in railway line connection from Almaty (Kazakhstan) via Tashkent (Uzbekistan) to Tehran and Istanbul, which would be further extended to Europe.
Iran’s future position by establishing a rail and road route to Central Asia cannot be ignored as she is not facing any turbulence in its immediate neighbours – Turkmenistan and Azerbaijan. The Pakistani leadership ought to exercise extreme care and sagacity in Pak-Iran ties in view of her role in the region. China’s export origination from western region would proffer her an option to avoid eastern coasts which entail extra distance of 10,000 kilometers.
China, being a strong regional power, has undertaken the mega project which would be an integral part of the China foreign trade route in the foreseeable future. It is conjectured that the entire Middle East, Central Asia and South Asia could utilise the Gwadar deep sea port, which has to be from and to Afghanistan. It would be an opportunity and threat to the adjoining sea ports. Russia has endeavoured to form axis with Iran to counter the influence of the NATO forces present in the region.
Russia opposes any economic cooperation between Pakistan and Central Asia. The most sizzling is Afghanistan, being the middle ground between the Central Asia and Pakistan. The US military and economic interests in the garb of pursuance of the al Qaeda have been unveiled ever since the invasion of Afghanistan. Should we wait for the US to fall back home or have equally impartial bilateral relations with the Afghan government, the Northern Alliance and Taliban, is a million dollar question.
Let us wait and see the fate of Afghanistan and our tribal areas. In the meantime, we should obliterate the apprehensions of the Baloch and address their genuine grievances which would help create political harmony and national cohesion. The federal government is indeed endeavouring a little for building confidence of locals and nationalists, but is the provincial government putting in its effort or it is still subservient to ethnic groups, sub nationalist political factions and pressure tactics of the so-called separatists?
Bilateral ties between the federal and provincial governments should have no disputes on board. The hostile designs of foreign exploiters need to be thwarted by pro-active diplomatic measures by the ministry of foreign affairs. The city of opportunity should be promoted akin to attract foreign investment. The deep sea port is not specific to China alone, international community may have conceived what India is propagating through their diplomatic means. Our media should target national and international audience by portraying the Gwadar as the future of Pakistan and the region.
The development of this mega project will be completed in a decade or so and would serve the country for a century. Apathy of the situation is evident from the callous attitude of some politicians and the national government. We all should launch a massive campaign for the project, lest it meets the fate of the Kalabagh dam.
Breaking the jinx of Gwadar Port:
Gwadar Port Project is beset by a ‘comedy’ of errors (or is it a “tragedy of errors”)? A press report says, “Gwadar Port finally made history by beginning its cargo handling from March 15, 2008.”
Once it is fully operational, and all its facilities and infra-structure in place(in complete working order after due testing and trial runs), Gwadar has the potential to be a much more lucrative port than Karachi or Port Qassim, for several reasons:
1) Its geographical and strategic location at the mouth of Strait of Hormuz, and as a deep water open sea port, an advantage not enjoyed by Dubai, Khark Island or Kish (in the Gulf) for instance. There may be competition with Chahbahar port in Iran, but certain political and economic constraints of Iran tend to negate the prospects of Chahbahar in comparison with Gwadar. As a gateway to the landlocked states in Central Asia, and China, Gwadar has no peer.
The advantages of Dubai as a free port, and a tax-free regime, can be overcome by declaring Gwadar also, as a free port for entrepot trade.
2) Climate: Though Gwadar is terribly hot during summer, it does not suffer from the “boiler-room” humidity of the ports in the Gulf, so comparatively, it is a more salubrious place for its inhabitants. Of course, Dubai is far more developed as a really cosmopolitan city and international trade centre, with a fairly long history of trade relations. It is more so because of oil, and the ostentatious display of immense wealth, which Pakistan will take years to emulate. Probably this factor can also work into Gwadar’s favour as a much cheaper place and a better locale for cost of doing business, as well as a much better educated and sophisticated human resource powerhouse.
3) It is true that Pakistan is no match for UAE or Iran or other Gulf States in terms of financial strength. However, the backing it receives from China, and the in-built advantage of direct access to nd from Central Asian States (and through them by overland routes to Russia and Europe on one hand, and Korea and Japan on the other), offers to Pakistan a unique opportunity to cash in on its fortunate geo-strategic locale. In years to come, particularly when Balochistan is fully developed and its natural resources harnessed to the optimum, there are good chances, in the not too distant future, to achieve a degree of prosperity rivalling the oil producers.
4) It is obvious that development of Gwadar as a thriving port, depends on adequate and modern infra-structure in its hinterland, and it is assumed that the authorities are alive to the dire necessity of immediate attention to this aspect.
5) The emerging new oil and gas centres around the Caspian seek outlets for their products and Gwadar offers a two-way outlet to markets East and West, North and South, unhampered by the conflicts in much of the region.
6) Initially some dissuasion is to be expected from the existing port facilities in the region, who would naturally be miffed at emergence of a strong contender, but that will gradually subside when they realise the potential of expanding their own business through these new facilities.
7) One big constraint is financing the project with all its paraphernalia and infra-structure, but the future revenue generation potential of the new port will soon recoup the initial outlay, and much more besides.
The boon to employment opportunities and social uplift it will bring about will solve the age-old problems faced by the so-far most neglected province of Pakistan, although it has the largest landmass among all the provinces. The fillip to industries, mining, agriculture, horticulture, animal husbandry, trade and commerce in Balochistan will have a domino-effect on other regions as well, all for the better.
9) The cumulative effect of all the above and other factors too numerous to mention will be the gateway for a prosperous and powerful Pakistan, God willing.
Source: Business Recorder, 15/4/2008
Gwadar an ideal destination for local, foreign investors:
ISLAMABAD: With strategic and economic significance, Gwadar is well poised to unleash constructive opportunities for local as well as foreign investment in diverse fields.
Development work and business activities are gaining impetus at a fast pace with the Gwadar site getting transformed into an ideal destination for potential investors.
Gwadar has better potential and investment opportunities. The port has been constructed and recently one ship carrying 60,000 tonnes of wheat has docked. Once this port becomes fully operational, it will have more advantages. Pakistani entrepreneurs along with foreign investors can make joint ventures at Gwadar, which is not only flanked by planned location but is also a vital corridor to rich oil and mineral resources with close immediacy to Central Asian States, observed Chief Executive of Gwadar Business Associates, Col (R) Fazal-e-Maqbool Afridi.
As far as its geographical location is concerned in comparison to the Gulf ports, especially Dubai, it gives more facilities and will handle more cargo and trade because Gwadar is a deep-sea port and is located on a main shipping route. For Dubai, ships have to wait for days for route clearance due to Strait of Hormuz. The landlocked Central Asian States are also dependent on Gwadar, expressed Col Afridi.
China and other countries shall have short route to the world market maintained through Gwadar. The location of Gwadar Deep Sea Port is such that the whole world businesses converge and diverges at this place.
The whole region can also avail trans-shipment facility as the transit cargo (liquid and dry both) can easily be undertaken from Gwadar and transported to any part of the world in short span of time in comparison to other ports, he viewed. Due to trans-shipment there will be lots of requirements of warehousing and container yards, he stated adding, being a deep sea port on a main shipping route it will facilitate the movement of cargo.
The trade and business activities of all kinds and quantity, from needle to ship, will also flourish at Gwadar irrespective of the cost. Import and export of all items and magnitude is possible, because the means of transportation like sea, road, railway line (in near future) are available and linked with all important countries, he maintained.
Being a deep sea port and facilities for transportation available, industry of any kind is feasible, both of raw materials and finished products, the chief executive said continuing, the mineral deposits of Central Asia have no shorter route to transport them to the world markets, than Gwadar.
Similarly, the developed world can also reap these benefits only from Gwadar.
The transport industry will have to import all kinds of vehicles, especially heavy ones for fast delivering of goods at remote destinations as well as in the city limits. Gwadar Port will also be termed as an energy port. The gas and oil deposit of CIS will find their new storage destination in Gwadar because of its natural flow direction. Even Iran can benefit from Gwadar by having opening to the world market for its gas and oil.
The Pacific states and all those countries which are short of energy can easily be supplied Liquid Natural Gas (LNG) from Gwadar. Fishery is one of the most important economic activities in the Gwadar district, in which a vast majority of population is engaged. The district has a 600 kilometres long coast line which provides residents not only the means of income but also the food to subsist.
About one fourth of the total catch of different varieties in Pakistan is found in district Gwadar. On an annual basis there is potential for an additional catch of at least thousands of tonnes. Real-estate is a vibrant industry, he observed adding, there are plenty of chances available starting from construction as every thing new has to be developed and built. It has lot of potential for prices to rise and any investment made will fetch a handsome amount for investors.
The construction industry will also have a boom at Gwadar as there is a dearth of place to live or open an office. Every thing new has to be constructed.
Manufacturing industries will develop, especially automobile, steel re-rolling mills, ship building, refineries, fertiliser and electronic industry, he added.
Source: The News, 10th January, 2009
Economic activities at Gwadar picking up:
QUETTA, Jan 7: More than 100,000 tons of imported fertiliser, unloaded at the Gwadar port, has been dispatched to various parts of the country since the port became functional on Dec 20.
The government is importing 350,000 tons of fertiliser through the port.
“So far 150,000 tons of fertiliser has been unloaded,” official sources told Dawn on Wednesday, adding that seven ships had anchored at the port since Dec 20.
The sources said that six out of the ships had been unloaded while unloading of the seventh ship was in progress. They said that four more ships would arrive at the port by Jan 21.
“We are transporting about 10,000 tons of urea daily from the Gwadar port to upcountry through trucks,” the sources said, adding that 400 to 500 trucks from Balochistan and Karachi were engaged to transport urea from Gwadar to Sindh, Punjab and the NWFP.
The labourers working at the port would continue unloading urea even during Muharram holidays for swift transportation of urea to other parts of the country.
Earlier, the Karachi port had been handling the unloading and transport of 4,000 metric tons of imported urea a day.“We are providing port handling facilities according to international standards,” a senior official of the Gwadar Port Authority informed the Chief Secretary of Balochistan, Nasir Mehmood Khosa, who visited the port on Wednesday. He said that arrangements had been completed to handle other ships arriving at the port over the next two weeks.
The sources said that with the Gwadar port becoming functional, massive economic activities have started in the port city of Balochistan and a large number of local people are getting job at the port. “All unskilled labourers engaged in unloading and port handling belong to Gwadar,” the sources said.
“Shipping agents are contacting the officials concerned to set up their offices in Gwadar,” the sources said, adding that importers and exporters were also taking interest in the Gwadar port.
Source: Daily Dawn, 8/Jan/2008
Pak Economy Non-Functional Gwaar Port:
The federal budget 2008-09 has earmarked Rs1 billion for setting up of Gwadar’s Export Processing Zone (EPZ) and Rs750 million for construction of new Gwadar international airport.In his budget speech, Balochistan Finance Minister Mir Asim Kurd also vowed to take all possible steps for developing the port city. He said: “work on 350-bedded hospital and sports complex on a 300- acre plot is in progress”. The provincial government has allocated Rs10.2 million for the Gwadar Development Authority (GDA).
The port has been built but it has not seen any significant related development on infrastructure and it is still without roads and rail links with the rest of the country. All mega infrastructure projects arel in planning stage. The port has remained non-functional for more than a year after its official opening in March 2007.
The first ship arrived at the port in March this year under special arrangements. Since then, no business has been transacted by the port authorities.
Gwadar Port Authority (GPA) has not yet announced the port tariff. The concession agreement, signed last February between Pakistan and the Port of Singapore Authority (PSA), entails ministerial authority over the operators to fix port fees to attract shipping lines.
Officials blame that while huge development funds have been invested, the economy has so far not reaped any benefits from such a gigantic project. Federal minister for Ports and Shipping Qamaruzzaman Kaira recently said that Gwadar port cannot be made operational before 2011 as it lacks required infrastructure, communication network and utilities.
The government plans to complete the business plan of Gwadar port in the new fiscal year. A project monitoring unit in the ministry of ports and shipping will undertake a study to identify the bottlenecks in efficient operation of ports and recommend phase-wise improvements required at all the Pakistani ports including Gwadar.
Pakistan has awarded the contract for new Gwadar International Airport to the China Harbour Engineering Company (CHEC). In February 2007, Islamabad had approved the construction of an international airport at Gwadar at a cost of $70 million for which 6,500 acres plot will be provided. The EPZ will be established on a 1,000-acre plot of land at Gwadar for providing better import and export facilities.
Gwadar port can handle mother ships and large oil tankers and serve the transit trade of the Central Asian Republic (CAR) as well as the trans-shipment trade of the region.
Bug the development of communication links -roads, railways, ports and terminals is an equally pressing need. In the next fiscal year, an amount of Rs36.5 billion has been allocated for the national highways programme with main thrust on the remaining work on Makran Coastal Road, Nutal-Sibi-Dhadar Section (N-65), Ratodero-Shahdadkot-Khuzdar Road, Qilla Saifuliah-Loralai-Bewata Section of (N-70), Gwadar Ratodero Road (Khuzdar-Khori, Ratodero-Quba Saeed Khan & Gwadar- Turbat) and Hoshab-Panjgur-Nag-Baseema-Surab (450 Km long section).
Under Phase-II, a new motorway corridor on the west of Indus touching Balochistan would be developed as a long-term measure. It is envisaged to develop industrial clusters, oil storage facilities and oil and gas pipelines along the proposed motorway and expressway corridors.
Gwadar port will be used as captive cargo or for trans-shipment purposes only. Initially, the port would handle 100,000 containers, 300,000 tons of general cargo and half a million ton of food grains, according to the officials of the GPA. The federal government has provided the additional funding to install the required equipment, complete the civil work and build roads linking the port with provincial capital Quetta.
The first shipment at Gwadar port has cost dearly to the Trading Corporation of Pakistan, which chartered a Panamax class vessel Post Glory for importing72,000 metric tons of wheat from Canada. The vessel arrived on March 10 but was not allowed to berth at the port and stopped at the outer anchorage.
A vessel from Pakistan National Shipping Corporation (PNSC), M V Hyderabad was engaged for lighterage and around 9,000 tons of wheat were unloaded before the Post Glory was allowed to berth at the Gwadar Port. The TCP was expecting a saving of $17 per metric ton by anchoring the ship at Gwadar instead of country’s other ports of Bin Qasim and Karachi as PSA.
The operator of Gwadar port had offered concessional rates, as compared to the country’s other ports, for unloading the imported wheat at Gwadar port. Lighterage of the weight of Post Glory into another vessel and the process of discharging wheat had created extra financial burden on the TCP as it had hired another vessel, technical staff, required machinery and labour, besides demurrage charges.
Critics accuse Gwadar Port Authority (GPA) of not maintaining draft of approach channel and of berths by doing regular dredging, as at the time of official opening of the port in March 2007 it had a 14-metre draft. Some local experts believe that the draft has reduced due to accumulation of silt, as during the year 2007, there had been cyclones and heavy monsoon rains which must have added silt.
The local officials had pointed out the risks involved in allowing berth to the huge vessel at new port of Gwadar, asking the government to berth the vessel at Karachi Port instead of Gwadar. They had informed about the arrival of the huge vessel with 72,000 DWT to unload wheat at new port of Gwadar may damage the jetty with a designed capacity of 50,000 dead weight tonnage (DWT).
Similarly, the port had only two tugs of 30 tons Bollard Pull, whereas the Panamax vessel needed at least two tugs of 60 tons for turning it within the 480-metre basin of the port. The experts apprehended that if the 30 tons tugs were used for this huge vessel, it might swing them and cause some mishap.
Balochistan’s development poses serious challenges to the new elected government. It’s main grievances include, denial of the provincial autonomy as guaranteed by the Constitution, inadequate royalty on gas and other minerals, sharing of resources under the NFC Award on the basis of population in total disregard to the economic backwardness of the province.
Source: Daily Dawn, 30/6/2008
Glory to Gwadar?
ISLAMABAD – The call of first-ever merchant ship Panamax class bulk carrier ‘POS Glory’ at deep-sea Gwadar Port in mysterious circumstances last month has raised many eyebrows.
Background discussions with shipping industry sources by TheNation have revealed likelihood of a deliberate attempt to bring POS Glory, 75,000DWT to cover up some major unlawful activity relating to country’s so-called first deep-sea port.According to the sources, POS Glory was in fact too large a ship that could take berth at the port because of constraints relating to permissible draught to sail through the port’s navigation channel.
As a result the ship that sailed from Canada to discharge 72,000 tons of wheat at Gwadar was forced to anchor miles away in the sea and was made able to discharge remaining wheat only after offloading up to 9,000 tons by another merchant ship m.v. Hyderabad of national flag carrier, National Shipping Corporation of Pakistan (PNSC).
This, sources maintained, had led to increase in the cost of shipping the commodity at the user end.
Sources argued that call of POS Glory would not have caused such an embarrassing situation had the Gwadar Port Authority (GPA) maintained the planned 14.5-meter depth, whereas the existing depth of the channel and three operational multipurpose berths was stated to be 12.5 meters by the time the POS Glory reached the outer anchorage of the port.
Sources blamed the GPA to be largely responsible for the mess created by the arrival of such a large ship, and apprehended that the port authority was caught in the middle because of its failure to maintain the required depth.
They also blamed the port manager and operator Singapore-based firm PSA and its Pakistani associates that have been favoured by the former government by awarding unprecedented 40 years tax free concession in February 2007 and could have advised the GPA not to allow call to POS Glory in the given situation.
Since the award last year, the PSA has neither made any worth mentioning investment nor it has installed any cargo handling equipment as per the agreement. Sources said the company had recently undertaken installation of container handling cranes.
Sources further pointed out that the PSA had no operational activity in the entire Middle East region after it abandoned the Aden port few years ago but had secured the Gwadar Port concession although there were two other potential investors including the Hong Kong-based Hutchison Ports Holdings and Dubai-based DP World.
Courtesy: The Nation, 3/4/2008
Gwadar port ” history-making milestones”:
Gwadar Port finally making history by beginning its cargo handling from March 15, 2008,” says a newspaper report.
And the port is certainly making history. This is perhaps the first port in the annals of the history of port development which could not receive the first commercial ship specifically chartered to use the port on its inauguration. Somebody just forgot to check the draft of the ship against the depth available at the port. The ship had to be partially unloaded at the anchorage to MV Hyderabad, engaged from PNSC, before the ship was able to enter the port.
According to Singapore’s Business Times of March 27, David Yang of PSA, (the operator of the port), declared the arrival of this ship, Pos Glory, as “a significant milestone in the port’s successful start-up.” The operator had been handed over the $298 million port on January 23, 2007. It handled one commercial ship in 14 months of its operation: a real milestone indeed.
This is not the first time Gwadar has made history and/or has established milestones.
Pakistan’s dream of having a deep water port at Gwadar is nearly as old as its existence. It started with the recommendation of Worth Condrick who was deputed by the US for survey of the Balochistan coast in 1954.
Realising importance of Gwadar, Pakistan paid £3 million (some say half that sum) in September 1958 to buy back the enclave from the Sultanate of Oman ending over 200 years of Omani control. Since then the history of the decision making process for its development has been that of studying, planning, shelving, restudying, re-planning and waiting and hoping for some outside aid agency to finance the project.
This process has taken half a century before the dream has finally become a reality, though, not fully yet to achieve the avowed objectives. Leaving aside the distant past, even the last two decades are full of events in the life story of Gwadar that make interesting history.
* 1988-1992: A mini-port was built at a cost Rs1,623 million including the foreign exchange component of Belgian franks of 1,427 million, equivalent to Rs749 million, arranged by the contractor. No ship worth the name ever called at the port.
* 1992: Karachi Port Trust initiated the project for development of a deep water port at Gwadar at a cost of $200 million with KPT funding 60 per cent of the cost. The rest of the money was to have been raised externally. The port was to be constructed within two years.
* 1993: Gifford & Partners & Technecon of Southampton, UK, in association with Techno-Consult carried out a study to develop the port.
* 1993-1994: The transport plan of the 8th Five Year Plan of Pakistan included the development of the port as an essential element of its aims and objectives.
* 1994 (November): A policy package for development of the port was floated to attract private/foreign investors on a BOT basis. This had a poor response.
* 1995: The federal government approved the construction of the port in December 1995 but the project could not get started because of shortage of funds.
* 1997: The government of Prime Minister Nawaz Sharif appointed a task force with Captain Haleem Siddiqui as chairman to address ports and shipping issues. The task force identified Gwadar as one of the focus area of development. However, the project remained a non-starter due to the post-Chagai economic sanctions.
* May 1999: China offered to jumpstart construction of the port by offering financial and technical assistance. This, however, could not materialise because of some unknown reasons.
* May 2001: President General Pervez Musharraf personally took up the matter with Chinese PM Zhu Rongji during his visit to Beijing. The latter agreed to help Pakistan in implementing the project.
* October 2001: Chinese engineers prepared master plan for the port. The groundbreaking ceremony of the construction work was to take place by the end of 2001. It was delayed because of US led air strikes on Afghanistan in retaliation of the September 11 attack in the US. Speculation was, however, rife that the Chinese pulled out of the project because of the expected use of the area around Gwadar by the US as a logistics corridor into Afghanistan.
* March 11, 2002: A delegation led by Communications Secretary Iftikhar Rashid arrived in Beijing to sign the agreement to re-start the work.
Finally on March 22, 2002, the groundbreaking ceremony of the project was performed by the President of Pakistan, General Pervez Musharraf, and PRC Vice-Premier Wu Bang Guo. The port was to be completed by March 2005.
The Gwadar story then became the perfect classical example of a myriad of events developing into the following well-known four stages of a mismanaged project: (a) euphuism of start-up, (b) realisation of ground realities, (c) identification of scapegoats and, (d) correction of the course.
Start-up: The government started the drum beat by spreading the news that with the day and night efforts of the Chinese, the project would go into operation much earlier than expected. Finance Minister Shaukat Aziz said in May 2003 that the work at the port was proceeding ahead of schedule of March 2005.
In a briefing to newsmen on June 6, 2004, Gwadar Development Authority, Director General Mir Ahmad Baksh Lehri advanced the date of completing the project to January, 2005.
The concerned officials were even more hopeful during a meeting on August 20, 2004 that was attended by Prime Minister Chaudhry Shujaat Husain, Finance Minister Shaukat Aziz and the seven-member Chinese delegation led by Charge d’Affairs Song Deheng: “The first phase of the port would become functional by December 25, 2004.”
The euphuism of the project then slowly started disappearing. Numbers of press reports on the progress of the project started diminishing. Authorities started realising that there were many a slip between the cup and the lip.
Ground realities: As the date for the hopeful completion of the project (December 2004) was nearing, officials dropped the hint for the first time on September 15, 2004, that all was not going on well with the project. It started having shares of big and problems. The wishes began to be translated into realities. Most probably authorities forgot that for the port to be functional, it required suitable equipment for handling cargo; and boats and tugs for handling ships. It also required deepening of the navigation channel to a more suitable depth for respectable size of ships to enter the port.
Officials were then instructed by higher authorities to procure equipment and boats required for the port “from the Chinese without any further delay”. The deepening of the port’s navigation channel to 14.7 million was also instructed to be carried out. A specialist firm or a person was considered necessary for smooth execution and port operation. The cost was revised to $298 million from the original cost of $248 million. The project completion date was revised to September 2005.
The surprising thing, however, was that even the Chinese Assistant Minister of Commerce Chen Jian did not know of this position. Talking to the then Ports and Shipping Federal Minister Babar Khan Ghauri on October 21, 2004, he assured the Pakistan authorities that the Port would be ready for operation by December 18, 2004. There were, however, definite indications by now that the project would not be completed before December 2005, nine months behind the schedule and 12 months behind the hopeful schedule.
Scapegoats: Apparently the news of delays trickled down to the prime minister and the president. A policy board was formed to ensure development of the Port and the City as an integrated industrial and commercial hub. The president agreed to be the patron-in-chief of the proposed board with the Prime Minister as its head, assisted by a powerful coordination and implementation committee.
Rear Admiral (Retd) Sarfaraz Khan (TIM), Chairman of the Port Authority silently left from the scene and without much fun fare Mr Akbar Ali Pasani, a local Gwadarite was appointed in his place. However, it was not until April 28, 2006 that the real culprit responsible for the delay was declared. Speaking as chief guest at a meeting of Gwadar Builders Association in Taxila, Federal Minister for Labour, Manpower and Overseas Pakistanis said that, “Gwadar project could not be completed due to sabotage and terrorist acts.
Another explanation given earlier by a minister, who did not want to be identified, for the delay in the Port’s inauguration in March 2005 was “due to recent floods and rains that damaged some parts of the coastal highway linking Karachi with Gwadar”.
Correction: Naturally, the correction process started in earnest though at a crawling pace. China provided additional funds for immediate dredging of the channel and purchase of additional cargo handling equipment and floating craft.
Apparently, President General Pervez Musharraf was very upset over the slow progress. Chairing a high level meeting called to review progress on Gwadar development project at Army House in Rawalpindi on June 10, 2005, the president directed the concerned authorities to simultaneous complete the port and all related infrastructure facilities before June 2006.
Confirming the above new completion schedule date, the then Minister Ports and Shipping Babar Ghouri told the Senate on June 17, 2005 that the development work of the Gwadar port project would be completed by June 2006 and the inauguration would be held in a befitting manner after its completion.
It was also realised that the most important thing for operation of the port when completed will be the appointment of a suitable port operator. The GPA in an advertisement published in the print media on June 12/13, 2005 invited EoI and RFPs.
The appointment of the required port operator made yet another history on its own. It took more than one and a half year for this process to be completed. This happened only after a new tender committee was appointed. Thanks to this committee and its head, Farooq Rahmatullah that within a week of the submission of the bids on December 4, 2006, the winning bidder was declared on December 10, 2006. Following the recommendation of the tender committee, Prime Minister Shaukat Aziz finally approved, on January 23, 2007, the appointment of PSA for operation of the port.
Conclusion: To sum up, the port with its 36 month construction schedule beginning March 22, 2002, has taken the first commercial ship after 72 months, even that after partially unloading at the anchorage: A ‘history making’ event indeed and a ‘significant milestone,’ as the PSA declares.
Leaving aside the loss of revenues of $300 million investment due to delay of some three years in the operation of the port, the question now is: who will pay for the demurrage charges of the ship waiting at the anchorage, charter cost of second vessel MV Hyderabad and cost of partial unloading of cargo at the anchorage from one ship to another? The simple answer most probably will be: who else but the poor tax payer!
However, it is no use crying over spilt milk. Under the present system of multi-level control of such projects in which every one worth position in the government has a finger in the pie, you cannot make any one individual or, even any one organisation accountable for such errors and omissions. In this system, you give power of decision-making to some authority by one hand and take it back by the other to be exercised by so many. This is then what happens: when every thing goes smoothly, every one takes the credit; but when things go sour, you cannot find any one responsible.
Nevertheless, it is not too late to learn from the past mistakes. Let us wish the port management under the new leadership of Rear Admiral M Ehsan Saeed Godspeed in making up the deficiencies faced by the port to achieve the avowed objectives. Hopefully, the fate of the second phase of the port is not hanging in the air for long lest it keeps up with its name Gwadar which in the local language means “The Gate of Air”.
The author is a retired port, harbour and shipping consultant in Canada
Courtesy: Daily Dawn, 14/4/2008
Stretegic signifcance of Balchistan:
Whether through the volume of potential commercial activity, or the Iran gas pipeline project, or the enormous untapped mineral resources in Balochistan; Pakistan’s prospects of economic prosperity in the future are inexorably linked to Balochistan
Balochistan is Pakistan’s largest province in terms of land mass, almost 50 percent of the total land mass of the country; has a population of only about 10,000,000 inhabitants, a mere sixteenth of Pakistan’s population. 35 percent are ethnic Baloch, 25 percent Pashtun, and the rest a mixture of Brohi, Mekrani, Sindhi, Hazarvis and Punjabi. However, the recent influx of Afghan refugees coupled with migration of some ethnic Baloch in recent times, has brought the Pashtun population at par with the Baloch, and the influx is an ongoing process, increasing the ethnic imbalance in favour of the Pashtuns.
Bordering Iran to the west, where it lies at the mouth of the Persian Gulf, and southern Afghanistan to its north, it shares borders with each of the other three provinces of Pakistan. It is Pakistan’s richest province in terms of mineral resources; some of the known gas, iron ore, gold, copper, and coal resources are being tapped, but not all. Far greater reserves of oil, gas, gold and other minerals are suspected but remain unconfirmed due to a variety of reasons, insecurity being the leading one.
Not only does the bulk of Pakistan’s coastline lie in Balochistan, the province’s coastline is particularly significant because almost the entire length of it is along a deep shelf, ranging in depth from one hundred to almost three hundred metres. During hostilities with India this has enabled ships to hug the coastline under protection of the naval air arm before making a run for the port at Karachi.
It is this shelf that makes it possible for the strategic deep sea port to be built at Gwadar. For the uninitiated, at a deep sea port, because of the depth of the sea close to shore, naval vessels as well as commercial ships can berth very close to shore. This not only makes loading and unloading ships easier and cheaper, since if berthed at a distance, goods have to be ferried ashore, which adds to the expense, but also provides additional protection in case of hostilities.
Gwadar port is being built with Chinese assistance in three phases, to be completed by 2015, when it will have twenty six berths. Numerous speculations have been made on Pakistan having offered the Chinese a naval presence at Gwadar as an incentive for them to assist in its construction and also construct the strategic coastal highway connecting Karachi to Gwadar.
While there is no disputing that this would provide a major incentive for Chinese assistance, but it does not account for the number of berths, which would be wasted without significant increase in commercial activity.
To understand this, we need to move on to China. Historically, major industrial development in China has been along their East Coast, for ease of shipping. However, conscious of the potential for unrest in the predominantly Muslim province of Xinjiang, to its west, bordering Pakistan and Central Asia, in the aftermath of the fall of the USSR, China constructed an oil pipeline from Kazakhstan to Urumqi, the capital of Xinjiang and also set up the national oil refinery there.
Consequently, in addition to the beginning of a demographic shift in this province, over the last fifteen years there has been an enormous growth of industry in this region.
A cursory look at the map will confirm that Urumqi is almost equidistant overland from China’s eastern ports and Gwadar. However, while eastern Chinese ports open onto the Pacific Ocean, leading directly to the Americas, to access European markets or the Middle East, Chinese ships go via the Straits of Malacca across the Indian Ocean to reach the Gulf of Aden; a distance of almost 5000 miles. Whereas, at Gwadar, they are not only at the mouth of the Persian Gulf, but also only 1100 miles from the Gulf of Aden.
China already has a rail link from Almaty, the ex-capital of Kazakhstan, which also lies on the border of Kyrgyzstan, to Urumqi. In addition, a memorandum of understanding has been signed between Pakistan and China for a joint venture constructing a rail link parallel to the Karakoram highway ending at Havelian, for which feasibility studies have been prepared, and from where Pakistan will provide a direct rail link to Gwadar.
Thus not only all Chinese goods produced in western China, but also products from a bulk of Central Asia will be able to take advantage of this route, even if the instability in Afghanistan and Pakistan’s North West Frontier Province denies them the more direct route. Obviously, if these regions stabilise, Gwadar port will be utilised to its fullest capacity.
Analysts have frequently adverted to Pakistan’s ‘strategic location’; linking the Middle East via Iran, Central Asia, China, and South Asia. While Balochistan provides the only direct link to Iran and onwards to the Middle East, the truth is that without Balochistan, the remaining linkages that Pakistan provides to other regions are reduced to less than half their strategic value, since the only other port at Karachi could never handle the magnitude of the potential commerce.
Whether through the volume of potential commercial activity, or the Iran gas pipeline project, or the enormous untapped mineral resources in Balochistan; Pakistan’s prospects of economic prosperity in the future are inexorably linked to Balochistan.
Regretfully, not many decision makers in Pakistan display a consciousness of this fact; nor of the fact that decades of latent dissatisfaction amongst the Baloch is about to spill over the brim.
The author is a retired brigadier. He is also former vice president and founder of the Islamabad Policy Research Institute (IPRI). This article is a modified version of one originally written for The National
Source: Daily Times, 16/8/2008