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Gwadar Port

1. Milestones laid in the past by our leaders have been quoted


frequently whenever there is a debate on development. Constructions of
motorways, Tarbela Dam, Mangla Dam are a few examples. But now,
these are part of the history and not enough to take the country out of
economic crisis. We still look forward for foreign aid and technical
assistance. It is very unfortunate that we could not explore and utilize our
National resources. Mountains of Balochistan, deserts of Sindh, green
valleys of NWFP and northern areas, coast of Makran and feeder land of
Punjab are waiting for someone to come. Though exploration of all
recourses is important but exploitation of the recourses is very important.
Fortunately, Pakistan has a unique geographical status and enjoys position
of a bridge between the land locked countries of Central Asia, Afghanistan
and the Arabian Sea. The Arabian Sea not only enjoys an important geo
strategic position but is also considered as one of the richest area in the
world In terms of resource potential. With an idea to strengthen the
Pakistan economy and exploit maximum potentials of Sea and a long
coastline, Pakistan has planned a venture of Gwadar Port

2. GM, for another 28 to 30 minutes I shall talk about the upcoming


project of this deep sea PORT . During the course of my presentation, I
shall proceed in the following sequence. First I shall apprise you of the
significance of seaports in contemporary world, which will be followed by
the enumeration of existing ports in Pakistan. Historical background and
location, of Gwadar port will be presented for your comprehension of the
topic. Financial and technical aspects of the project will precede the
highlights of associated road and railway linkages. Later I shall dilate
upon the Geo-strategic perspectives and the Strategic implications of this
port on Pakistans economy and its defense. In the end I will analyse the
situation emerging from the commissioning of this port and will conclude
my presentation. Subsequently, I will be happy to answer any Question
that you might have.

SIGNIFICANCE OF SEA PORTS

GM

3. Role of a seaport is to provide adequate and safe acceptance and


dispatch of ships of different sizes and types according to the trades. It
also provides service of cargo and passenger handling, berthing, transit
and warehousing facilities. For centuries Seaports have served as the
termination points of the great ocean highways, which were used for trade
and commerce. Seaports serve two specific and important needs, as they
fulfill the

(a) Economic cum commercial requirements of a country and


play a dominant role in international trade. The number of ports
reflects the economic and technological capacity of a nation; The
development of ports can boost the maritime Industries along the
coast such as fishing, ship repair, shipbuilding etc. Modern
Japanese Economy is a brilliant example of how a good use and
development of sea ports can turn a nation self-imposed isolation of
centuries in to an economic explosion

(b) Militarily, One of the accepted means of reducing an enemy


to submission in war is to block his trade with other countries. This
will make him unable to receive arms, munitions, oil, food and other
necessary products to sustain war and the needs of its people. In
the past, economic measures of such nature have produced similar
results as those of actual military operations. These objectives are
attained by blockade of ports through threat or actual disruption of
sea lines of communication (SLOCs).

4. To calculate the economic potential and the strength of a nation, its


coastline and the character of its harbors instead of total square miles is
considered. Development of Ports remained a neglected area in Pakistan
and could be assessed by looking at the situation of Existing ports in
Pakistan Pakistans coast extends from Gavatar bay in the west to Sir
Creek in the east, stretching over a distance of approximately 960km.
Leaving a vast coastline in the West, Pakistan depends on two co-located
ports at Karachi. These ports look after al 95 % of Pakistans own trade
and also handles a substantial amount of trade leading to land locked
neighboring countries.

5. At the time of independence Pakistan inherited a single port at


Karachi The total area of Karachi port extends over 32 sq.miles, 85% of
which is covered by harbour water. It can handle only 22.5 Million tons of
cargo. It has two oil piers for handling large oil tankers with loading/
unloading facilities. There are 28 general cargo berths, which can accept
ship of up to 9.75 meters draft. The port lacks modern cargo handling
and storage facilities, and has a congested road outlet. The main
navigable channel is 7 miles in length and provides 37 to 40 ft depth at
the sea for the movement of deep draft oil tankers. The width of the
channel is 600 ft, which allows the movement of one ship at a time. In the
absence of salvage facilities, if a ship is sunk in the channel the port will
be blocked.

6. Port Qasim was raised in 1976 as a cargo port and became


partially functional in 1983. There is a master plan to develop it into a
huge port complex. It has good communication infrastructure, road, rail
links and adequate port and berthing facilities. The Harbour is a 45 KM
long navigable water channel with a width of 600 ft. Like Karachi, it
facilitates the movement of one ship at a time. And if a ship is sunk in this
channel the port is again likely to be blocked. There are seven berths
including one specialized Iron ore coal berth. A full range of floating craft
and cargo handling equipment is available to handle ships and cargo up to
10 million tons per year.

7. At present the amount of cargo being handled on these ports is in


excess of the total capacity of these ports, which is causing economic
losses to the users. This problem is likely to be aggravated further with the
forecasted increase in domestic, and ECO traffic requirements. Secondly
due to draft limitation at Karachi port, bulk of container traffic for Pakistan
is transshipped to Dubai, or Colombo. These are later feedered into
Karachi port causing extra time and money.

8. Keeping in view the above-mentioned considerations the


government of Pakistan has approved development of a third Deep-sea
water port at Gwadar..

BACKGROUND AND LOCATION OF GWADAR

9. The approved port at Gwadar is located at the western edge of


Makran coast in Baluchistan province. It is about 235 nautical miles West
of Karachi and 390 Nautical miles East of Strait of Hormuz in Persian Gulf.
Makran coast occupies about 650 km making 85% of Pakistani coastline.
This coast has a significant historic background. For centuries the
conquers entering in to the sub-continent from west have used this main
route of communication between Middle East and the Sub continent
10. Gwadar is an important town of Makran and has seen many rulers in
the history like, the Buledies, Gickhkies, and the Ahmadzai Dynasty,
popularly known as " Khans of Kalat ". In last quarter of 18th century,
Nasir Khan I, the then Khan of Kalat gifted Gwadar to a Muscat Prince.
Muscat maintained Gwadar till 1958, when Pakistan purchased it from the
ruler of Muscat.

11. Despite the requirements and pressing needs of the country, the
importance of such a natural gift of coastal belt could not be realized until
70s, when a complex idea of establishing a port in Baluchistan was floated
for the first time. This idea failed to get any support till 80s. But in the
beginning of 90s with the demise of USSR and independence of new
Central Asian states. This idea attracted the notice of our policy makers,
and they prepared a proposal regarding construction of a deep-sea port in
Baluchistan. The proposal was tabled in the meeting of federal cabinet
on 9th Jan 1991, and a detailed feasibility report was ordered. The
process remained in cold storage for two years. In 1993 a committee
was formed with senior technical persons in chair, after thorough analysis
they agreed to the proposed site of Gwadar. Consequently the federal
cabinet approved the final project on 30 October,1995. In persuasion of
the decision another Committee under Minister of Communication
popularly known as Gwader Implementation Committee (GIC) was
formed. It did the main solution work of the project and forwarded
modalities of the project in a comprehensive document in December 1995.
G I C forwarded the
FINANCIAL AND TECHNICAL ASPECTS OF THE PROJECT the report
described that Gwadar is a small fishing town of about 50,000
people. It has a small international airport, and a fair-weather
road tract, which connects it to Karachi through coastal towns.
Gwadar is located on a tombola, formed by a natural headland
and is connected to the hinterland by a sandpit. The headland
stretches East to West for about 13 km with a maximum width
of about 3 Km. The East and West bays created by the
natural configuration are sufficiently protected from the
southwest monsoon waves. The behavior of sea experienced
over the years show that the East bay is more protected as
compared to the West Bay.

12. The principle objective of development of Gwadar is that it will serve


as a ' Regional Hub' in view of the recent geo-political changes in the
region. The port will handle the traffic to and from the ports of Sri Lanka,
Bangladesh, Oman, UAE, Saudi Arabia, Qatar, Iraq, Iran and the land
locked countries like Afghanistan and Central Asian Republics. Together it
will also serve the purpose of a ' Transit Port' for the trade from Far East
and Red Sea destined for Gulf.

13. Considering the poor Economic state of the country, and realizing
the fact that Port construction is an expensive business, in March1996
GIC recommended the Economic Support And Technical details in
following manner:

For fast development and funding arrangements, private sectors


was invited by introducing, Build Operate and Own (BOO) or Build
Operate and Transfer (BOT) techniques. It was also recommended that
the project should be undertaken in phases. Phase I, must be developed
mainly by the Government itself, and in phase II private sector should be
introduced.

14. During Phase I the development of breakwater and three berths


with 600-m of quay wall with 150-meter plinth and 250 meter further back
up area will be constructed. And dredging of approximately 5-km approach
channel to a depth of 11m will be done. For Cargo handling, covered and
open storage areas will be formed. Marine equipment, navigational aids,
radar and Lighthouse tower along with tugs, pilot boats, and survey boats,
will be provided.

15. In Maintenance facilities workshop, maintenance dredger, service


jetty and slipway for all crafts are planned. Beside these facilities Office
and residential accommodation for port personnel will be provided and
Utilities including desalination plant and water supply, distribution,
drainage and sewerage plants will be ensured.. Electrical distribution and
standby power generation will also be provided. The total estimated cost
of development of phase one was approximately700 million US$.

16. Afterwards in Phase II. The Construction of port facilities on BOO or


BOT basis will be started. In this phase two berths will be made for
Containers, along with a Dry Bulk Cargo berth. A Grain Terminal will also
be made, together with a General Cargo berth. Two births for future
expansion Container works with two oil piers will also be provided. The
Phase Two will cost about 526 M US $. Estimated trade forecast of
Gwadar Port is as shown on this view foil.

Gentle man, This viable project hanged about to develop because of


non-availability of funds. In 1997, calculated amount to be spent on the
project was 1.4 billion US $. After tapping all the possible local funding
options, a huge amount was still required from the foreign investors and
funding institutions But due to sanctions and non conducive environment
in Pakistan the investors kept themselves restrained from investing. A
new hope aroused when Prime Minister of China visited Pakistan in mid
of May2001, and announced financial support for the project. Later
Chinese Minister for communication visited Pakistan and finalized the
details of construction and financing of the project.

17. On Technical issues his team recommended a review and up-


gradation of the Port Master plan, and emphasized on redesign of project
to reduce the cost by adopting Chinese specifications. Pakistani experts
of port construction were invited to China for the study of Chinese ports.

18. Regarding the financial issues a grant amounting 100 million US$
was offered. China also committed a state loan of 48 million US$. While
Pakistan was asked to invest an equity of 50 million US$, and is also to
provide tax -free import of the relevant material.

19. On 12 August,2001 the finance agreement amounting 198 million


US$ was signed. Soon after this a Chinese team came to Pakistan,
which is busy in investigating and surveying the area, hopefully by end of
this month they will give their final report. The execution of port work is
likely to commence by March 2002.

20. Gentle man To support the infra structure of this huge project, A
competent net work of Associated Road/ Railway Linkages is also
required. Presently the road link between Gwadar and hinterland is
almost non- existent. As part of the Government's commitment to develop
this port, three highways have also been planned and designed; they will
link Gwadar to the rest of Pakistan and the Central Asian states.

Makran Coastal Road will link Gwadar to Karachi in the east, and towns
of Jiwani and Gadb on Pak-Iranian border in the west. This will be a two-
lane 780 km long road. Government has also taken up the construction
of 925-km long 4-lane Expressway to link Gwadar to Ratodero on the
Indus National Highway. The road will pass through Turbat, Awaran,
Khuzdar and Shahbadkot it will initially be two lanes road and will be
converted to four lanes with the growth of traffic. Work on this part of the
road is in progress and the road on completion would provide a direct link
from Gwadar to Northern Pakistan.

21. Presently National Highway N-25 links Gwadar to Afghanistan via


Quetta. Another road under plan, will link Gwadar to -Quetta via Turbat,
Panjgur, Kharan, Nushki and will reduce the distance to 795 km instead of
1090 km. In addition to these highways a rail track is also proposed and
will connect Dalbadin via Punjgur. Thus connecting Gwadar to present
railways structure

22. G M The estimated cost for the road construction are shown on this
view foil

GEO-STRATEGIC PERSPECTIVE

The strategic importance of Indian Ocean had been predicted by Alfred


Thayar Mahan, a naval strategist is these words:-

"Whoever controls the Indian Ocean, dominates Asia. This Ocean is


the key to the seven seas. In the 21st Century, destiny of the world will be
decided on its waters"

23. The Indian Ocean is an enormous gulf surrounded by the continents


of Africa, Asia and Australia. The points of strategic importance are; Straits
of Hormuz, which Controls the oil flow from Persian Gulf and the Arabian
Peninsula. Bab-el-Mandeb is located at the southern end of the Red Sea;
and controls the traffic of Red Sea and Suez Canal. The straits of Malacca
and the Sunda Straits, control the traffic from the Far East. Gwadar is
located on the mouth of Persian Gulf, which holds a great geo-strategic and
geo-political position. From this point complete traffic moving across the
two western choke points of Indian Ocean could be overseen and
monitored. Approximately 30,000 ships including 1,500 tankers pass
through these choke points annually. It can be presumed that a conflict or
an extension of any conflict in this zone can endanger the world trade and is
likely to have global effects.

24. During the end of cold war era the Geo strategic location of this area
gained massive importance. President Carter in 1980, after Soviet
occupation of Afghanistan and perceiving a threat within 300 miles of the
Strait of Hormuz presented his famous Carter doctrine and said, An
attempt by any outside force to gain control of the Persian Gulf region will
be regarded as an assault on the vital interests of the United States and
such an assault will be repelled by any means, including military force.
United States also realized that what it would be like if the Soviet Union
gained control of southern Pakistan. The soviets will build air and naval
bases at the ports of Karachi and Gwadar and the other ports astride the
sea-lanes leading from the Gulf. This will largely nullify American sea
power in that area and place the oil shipment to the United States and its
friends in jeopardy. To avoid such situation United States unwillingly
offered Pakistan a military aid of 3 billion US$ and offered state of the art
military equipment.

25. With disintegration of USSR, the importance of this area adopted


another dimension. The newly independent states have vast economic
potential and great strategic importance but they lack trade out lets to the
outer world. Pakistan as a neighbor and a brother Muslim country has an
opportunity to derive strategic and economic benefits by providing them
an access to warm water by offering them a port facility.

26. Development of a new port at Gwadar will not only provide a trade
route to Central Asian Republics but will go a long way in the ECONOMIC
DEVELOPMENT OF PAKISTAN. Gwadar port will enhance the TRADE
POTENTIAL of the country. The land locked Central Asian Republics
have a consumer market of 70 million people, and has a vast export
potential in the field of petroleum, mineral resources and raw materials of
diverse nature. The Cargo Generation as worked according to the
available data, which may flow through Gwadar, shows a very
encouraging figures. The World Bank estimated the trade forecast of
Uzbekistan for 1992, which was about one million Rubbles, or 4,000
Tones of material. Assuming that this relationship holds true for the other
states also, the total volume of trade that may flow through Gwadar Port
will be approx. 1.5 million Tones. Or will have a value of 280 million US
Dollars, with an expected growth rate of 1.4% annually. . The CARs are
moving towards free market economy, and are concentrating on
development of trade and investment promotion

G M Gwadar port will also open a new vista in the up bringing of


dry, barren and un-exploited largest province of Pakistan. Development
of coastal areas and communication net- work will provide an economic
relief to the people of Baluchistan

27. This project will also help in establishing a modern and major
INDUSTRIAL NETWORK along Gwadar and the proposed roads. The
industry, which is typical to the port vicinity like fisheries, ship building etc
will also flourish The economic benefits of sea come in the shape of both
LIVING AND NON LIVING RESOURCES. Living resources Like Fish
is available in abundance in the Arabian sea and is considered as one of
the most productive in the world. It has an estimated biomass of 10
million tons, where as our catch averages is just.4 Lac tons per year
Viewing economically, despite under utilization, the export of fish and fish
products have earned a total foreign exchange of 4.7 billion rupees.
28. At present Pakistan has three fish harbors, and those are located at
Karachi, Pasni and Gwadar. The Karachi fish harbor is over crowded,
whereas the fish harbour of Pasni and Gwadar are not fully operational
owing to various reasons, such as, non availability of required power
supply for cold storage and non existence of coastal road infrastructure.
Secondly the coastal fishing area extends up to 100-meter depth contour,
which run approximately 50 km off shore in an area of about 8,000 sq. km.
The existing small and primitive fishing fleet is in a bad condition and this
state gets further aggravated due to lack of navigation/ communications
equipment. Fishing activity is therefore restricted to 20-meter depth
within 20 km of shore in fair weather only. Development work in coastal
areas will address these problems.

29. G M Our sea is full of NON-LIVING RESOURCES. Usefulness of


sea is evident from the view foil. Arabian sea is considered to have
nodules, found in concentration as high as 100,000 tons per sq. mile and
containing Copper, Nickel, Cobalt and Manganese. Other expensive
minerals are also part of these nodules.

30. A survey carried out of our area during 1985 by experts from US,
OGDC and petro-Canada for international development and revealed a
promising potential for Oil & Gas. The Geological experts have
estimated vast hydrocarbon resources. The estimate of the deposit is 10-
100 trillion cu feet of natural gas, 10 -100 billion barrels of oil is present in
our continental shelf. Gas seeps have also been discovered on land all
along the Makran coast.

31. For years to come, Pakistan will reap the benefits through
development of these resources. The communication network will
connect the vast reserves of Sandak to the port and whole country. This
network will also provide an easy access to the far-flung areas of
Baluchistan and will thus help in Oil and Gas exploration

32. Together with enormous economic and commercial benefits,


Gwadar port has many associated MILITARY BENEFITS Pakistan Navy
over the years has shrunk to a coastal navy. With significant changes in
the region, especially after attainment of nuclear capability by Pakistan, it
is important for the Navy to at-least assume its previous disposition
Moving westward should be first step towards this. Development of
Gwadar port should provide the Pakistan Navy an opportunity to be in
area of strategic importance, an area where navies of several countries of
the World are always present to project their interest.

33. Pakistan presently relies on only one port complex for its imports
and exports. Port Qasim within close proximity is considered part of the
same. It is beyond any doubt that a single base or port complex is more
vulnerable to enemy threat. The problem is further compounded when
the only port complex is within easy strike range of the enemy. Keeping
Pakistans geography and Indian hegemonic designs in view, moving
westward will make the Indian threat less ominous, as it will keep the
ships out of Indian missile boats range and will also reduce air threat
comparatively. Karachi due to its closeness is also susceptible to enemy
mining, thereby blockading the only harbour. One of the tasks of the
Pakistan Navy is to keep the SLOCs open, with availability of Gwadar as
deep-water port; the tasks of the Navy will become relatively easier.

ANALYSIS

Gentle Man. In synopsis, construction of Port Complex at Gwadar


will have the following benefits:
Having just one port at Karachi has caused political problems to the
country. During disturbances and poor law and order situation in
Karachi this factor is often exploited to the maximum Construction
of Gwadar port will provide additional capacity and relieve
congestion at the two existing ports of Karachi and Bin Qasim..

Secondly Gwadar port will address the problem of transshipment


and will reduce the extra shipping time and charges, which are
incurred because of the limitation of depth at Karachi port.
Development of Gwadar will result in dispersal of maritime
community, thereby reducing population load at Karachi.

(c) The biggest draw back of Karachi port is that the Karachi
harbour, Shipyard and Pakistan Naval installations are co-located in
close vicinity, which makes it a lucrative military target, and thus the
only port complex of Pakistan remains under a constant threat of
blocked or attack. Construction of Gwader port will not only provide
a strategic and tactical depth to Pakistan Navy, but will also
drastically reduce Indian submarine threat to our high value units.

34. It will develop essential port infrastructure consisting of a land link


connecting Gwadar to the national highway network. This link will serve
as a gateway for cargo to and from the land-locked countries of
Afghanistan and Central Asian States. As a result, simultaneous
development of the hinterland area is expected to take place, which will
provide a much-needed boost to the economic development of
Baluchistan. Establishment of industrial zones, oil storage, refining
facilities and other supporting facilities will help in creating employment
opportunities in Baluchistan.
35. Gwadar is expected to serve as a mother port. It could provide
berthing, warehousing, trans-shipment and industrial facilities for trade
with over 20 countries including the Central Asia, Persian Gulf, East
Africa, Red Sea countries and even north- western India. Other future
facilities include the development of cargo ferry and shuttle service to
neighboring countries.

36. Besides facilitating naval cooperation between Iran and Gulf


countries, our presence in an important trading area of the world will
increase.

37. In order to make the development of Gwadar meaningful, following


recommendations are presented.

Pakistan must make solemn efforts to help stabilize the situation in


Afghanistan; an obstacle, without removal of which, transit trade with
Central Asian Republics is not likely to materialize.

(b) Pakistan should expeditiously exploit the opportunity of


providing routes to Central Asian Republics for their trade through
sea to India and other Far Eastern countries. This will pay us back
as a double edge weapon. If India tries to disrupt our trade system,
its own economy will be affected. Additionally, this route will
provide us relief in the face of Indian blockade of Karachi.

(c) Development of Gwadar as a major port deserves high priority


and construction should be undertaken without any further delay
government of Pakistan must give financial incentives to private
consortiums for construction and operation of this port.

(d) Road connection with the hinterland must be awarded due


priority. Especially between Karachi and Gwadar, so that, the
construction works at Gwadar becomes less costly and easily
supported.
(e) The existing Gwadar airport is not capable to handle bigger
aircraft and can only take small and medium sized aircraft. To meet
future requirement of the area, expansion of Gwadar airport should
also be given due consideration.

(f) It is recommended that prevailing Rules regarding Taxation and


shipping should be revised and incentives to ship owners and
private enterprises must be given in order to attract them towards
this port.

(g) An aggressive marketing policy is to be assumed, to compete


with other ports in area.

(h) While formulating the feasibilities and viabilities, interest of


Pakistan and its development should be given priorities. Business
with Central Asian states is a by-product of developed port and
infrastructure.

CONCLUSION

37. Seaports play a dominant role for economic interdependence


amongst the nations of the World. The development of ports also gives
boost to the maritime industries along the coast. Development of Gwadar
port complex is strategic, economic and social compulsion, and will accrue
tremendous benefits to the country. The project of construction of port at
Gwadar has already been delayed considerably owing to various reasons.
For financial viability of the project, it must be undertaken without further
delay. If this opportune time is lost, other countries will develop
alternative routes for transshipment trade and Pakistan will loose this
golden opportunity of establishing the long cherished and much-heralded
Regional Hub-port for transshipment cargo and direct trade routes to
Central Asia.

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