The Gwadar Port Megaproject

Gwadar (Urdu: گوادر ) (also spelt Gawadar in English) is a coastal town in Balochistan, Pakistan, 650 km west of Karachi. The population of the town is almost 100,000 and is the headquarters of Gwadar District.Strategic location of Gwadar, and possible oil lines through the region. Gwadar is located on the southwestern coast of Pakistan, close to the important Straits of Hormuz, through which more than 13 million bbd of oil passes. It is strategically located between three increasingly important regions of the world: the oil-rich Middle East, heavily populated South Asia and the economically emerging and resource-rich Central Asia.

The Government of Pakistan has initiated several projects, with majority financial and technical assistance from China, to develop Gwadar's strategic location as a goods transit and trade point. The primary project is the construction of a deep-sea port at Gwadar to enable high-volume cargo movement to and from the landlocked Central Asian states. The new port will also encompass conversion facilities to allow for the movement of natural gas as a part of plans for a termination point for the Turkmenistan-Afghanistan-Pakistan natural gas pipeline. The secondary project is a coastal highway connecting Gwadar to Karachi, whose $200 million cost will be completely financed by the Chinese. Gwadar will serve as a port of entry for oil and gas to be transported by land to the western regions of China.

The significance of Gwadar is great to both Pakistan and China. Pakistan will be able to have a strategic depth southwest from its naval base in Karachi that has long been vulnerable to blockade by the Indian Navy. There have been many reports that China, with permission from Pakistan, will also be able to dock naval ships in or around Gwadar. This has caused much concern by both the United States and India as both of these nations do not wish to see a Chinese naval presence in the Indian Ocean.

TransportGwadar is located on the Arabian Sea close to the entrance of the Persian Gulf, about 460 kilometres west of Karachi. In 1993, Pakistan started feasibility studies for the development of a major deepwater seaport at Gwadar. The port project commenced on 22 March 2002 with the first phase completed in December 2005.

The construction of the port has spurred other major infrastructure projects in the area. This includes the 700-km Makran Coastal Highway which is now complete. The road links Karachi with several ports along the coast including Ormara, Pasni, Gwadar and will be extended to the Iranian border in the future. The highway has reduced travel time to Karachi from 48 hours to only 7 hours. Other road projects include the Gwadar-Quetta-Chaman road which is due for completion in 2006 and a roadlink to the town of Khuzdar in eastern Balochistan. There are also plans for a terminal for passenger ships.

The Civil Aviation Authority of Pakistan has

earmarked 3000 acres of land for a new airport which will be built 26kms away to the northeast of the existing airport towards Pasni and is likely to cost between $200-250 million. The new airport will be given international status and operate under the open sky policy. In the meantime there are plans to improve facilities at the existing airport.

Chairman of Dubai Ports World, Sultan Ahmed bin Sulayem, who met President Pervez Musharraf on May 5th 2006, expressed a strong hope for management of facilities at the strategic Gwadar deep sea port and development of infrastructure in the southern port city and elsewhere in Pakistan.In 2006, Ministry of Railways announced that Gwadar will be connected to Pakistan Railways network at a cost of $ 1.25 billion (Rs. 75-billion).

Benifits of GwadarBesides the Geostrategic importance mentioned earlier, some of the evident economic benefits of the development of Gwadar Port are:

-Capitalize on opportunities for trade with landlocked Central Asian States and Afghanistan

-Promote trade and transport with Gulf States

-Trans-shipment essentially of containerized cargo

-Unlock the development potential of hinterland

-Diversion of influx of human resources from up country to Gwadar instead of Karachi

-Socio economic uplift of the province of Balochistan

-Establishment of shipping related industries

-Oil storage, refinery and petrochemicals

-Export Processing and Industrial Zones

-Reduce congestion & dependency on existing Ports Complex at Karachi/PQA

-Serve as an alternate port to handle Pakistani

trade in case of blockade of existing ports

-Will become a Regional Hub for major trade and commercial activitiesPHASE IThe development of Gwadar Deep Sea Port as per approved PC-I and Master Plan is to be undertaken in two phases. Phase I will comprise of:-

- 3 Multipurpose Berths- Length of Berths 602m- 4.5 Km long Approach Channel Dredged to 11.5m-12.5m- Turning Basin 450m dia- One 100m Service Berth- Related port infrastructure and port handling equipment & Pilot Boat, Tugs, Survey Vessel etc.

The port will be equipped with the essential port handling equipment and other infrastructure required for smooth operations of a modern port. On completion of Phase-I, the Port will handle Bulk Carriers of upto 30,000 DWT and Container Vessels of 25,000 DWT. Phase-I will be completed at a cost of Rs.14.9 Billion (US$. 248/- Million) and will complete in 36 months i.e. March 2005.

PHASE II

This Phase of the Project is planned to be built on BOO/BOT basis at an estimated cost US$. 600 Million. It will comprise of 9 additional berths as per following details:-

- 4 Container Berths.- 1 Bulk Cargo Terminal (to handle 100,000 DWT ships).- 1 Grain Terminal.- 1 Ro-Ro Terminal.- 2 Oil Terminals to handle 200,000 DWT ships.

Phase II of the project involves construction of more berths on BOT basis including two container berths, one bulk cargo terminal, one grain terminal with capacity handling vessels up to 100,000 DWT, one roll on/ roll off terminal, two oil piers for vessels up to 200,000 DWT and future expansion of two container berths. On completion of the project, Gwadar Deep-sea port would be on of the world's most strategically located port in this part of the world.

On successful completion of Phase-I, it is anticipated that the private sector would come forward to invest in the second phase of the Project. It is envisaged that the complete development of such a Mega project will take 8-10 years depending on the active participation of the private sector. 

Cost of The ProjectTotal amount equivalent to Rs 14.9 Billion (248 million US dollars) were approved by ECNEC for Phase-I of the project. The financial agreement for development of Phase-I was signed with the Govt. of China on 10 August 2001 under which the Chinese will provide US$. 198 Million and the Govt. of Pakistan will provide US$. 50 Million. 

Chinese: Grant US$ 18 Million.

New Grant Assistance US$ 31 Million.New Interest Free Loan US$ 31 MillionGovt. Concessional Loan US$ 58 MillionBuyer’s Credit US$ 60 MillionTotal US $ 198.00 Million

Pakistani: $50 Million (US).

Additional Development Cost:Additional development costs were also envisaged for Electrical Supply 132 KV Transmission Line from Turbat to Gwadar at an approx cost Rs.360.00 million and a Railway line from Gwadar-Panjgoor-Dalbandin (515 Km) at approx cost of Rs.8, 500 million. This is however not a part of the sanction to the Gwadar Port Development Authority. 

Human Resource

The Chinese have mobilized 450 personal from China and hired 512 local workmen as per following detail:- 

Chinese: 450Pakistani: 512

Civil Works and Infrastructure Development

The design and construction of residential buildings and civil works of various port operation buildings and related infrastructure development is to be undertaken by Pakistani contractors and firms out of the US dollars 50 Million allocated for the Project. In

this regard consultants have been hired and process for pre-qualification of contractors has commenced. Similarly, award of contract for the construction of residential area was approved by the MOC in June 2003 and the Contractor has already fully mobilized and a construction activity has started.

Master Plan of GWADAR

Concurrent with the Port development a Master Plan of Gwadar has been approved by Balochistan Government through NESPAK and which has been a hot topic of discussions at various forums. Implementation of the Master Plan is the responsibility of Govt. of Balochistan. Physically no headway has been made so far which is a matter of concern.

The following potentials have been identified in the Master Plan of Gwadar Deep Sea-port Project:

- Increased trade to and from Balochistan and Iran.

- Trade potential from Central Asian countries through Afghanistan.

- Transit cargo (liquid and dry bulk)

- Warehousing and assembly industries (EPZ)

- Oil storage, refineries, petrochemical industries etc.

- Handle the shipping traffic of the region.

Gwadar Master Plan envisages development of about 18,600 hectares of land for this project including the followings:

- Port development in Phase 1 & 11 on 400 hectares.

- An Export Processing Zone of 74 hectares located on land adjacent to the port in East Bay.

- A Special Industrial Zone of about 4,000 hectares lying to the north of the town.

- An oil refinery of 1,000 hectares located to the north east of the town, linked to the proposed oil terminal by an underground pipeline across East Bay.

- A residential area of 400 hectares stretching north of the existing town along West Bay.

To bring Gwadar close to the national mainstream, 700 Km long Makran Coastal Highway is in advanced stage of implementation. It will link Gwadar with Pasni, Ormara and Karachi. An other regional linkage is the Gwadar Ratto-Dero motorway linking it with Indus Highway through Turbat, Awaran and Khuzdar. A rail link is also planned to connect Gwadar to Quetta and Zahidan. Civil Aviation Authority also plans to upgrade the existing length of runway from 5,000 ft to 15,000 ft for operation of wide bodied jet air-crafts. The extension work will begin by end August, 2003 and the extension facilities will be available for use by end 2004. 

Investment Opportunities

Some of the evident investment opportunities:-

- Master Plan related infrastructure i.e. internal roads & services, water and power and communication services for the new township and the Industrial Zone. 

- Private owned Ware Houses and Cold Storages.

- Private cargo handling equipment and trucking yards.

- Corporate Infrastructure i.e. offices for operating firms & agencies.

- Development of Industrial Zone and Industries.

- Development of Commercial/residential areas & buildings.

- Labour related amenities for thousands of workers employed on developmental work of Great Gwadar.

- Hotels & Motels.

- Hospitals, Colleges & Schools.

- Tourism related industry. 

- Marine related industry i.e. shipyards, dry dock and repair yards.

- Marine Fuel bunkering for visiting ships to include

large fuel storages and mobile barges etc.

- Oil refinery and large oil storages.

- Ferry services between Gwadar-Karachi/Oman/Bunder Abbas and UAE.

- Industrial Export Processing Zone

- Hinterland road; Gwadar – Rattodero Expressway (735 km) will pass through Turbat-Awaran-Khuzdar & Shahdad Kot.

- Gwadar-Quetta (via Turbat-Panjgoor-Kharan-Nushki) requires to be widened and improved. This link road will reduce the distance to Quetta from 1090 km to 795 km.

- Railway; Gwadar – Panjgoor-Dalbadin (515 km).

- Gwadar-Afghanistan via Quetta by National Highway- N-25.The Mega Projects

Deem Sea PortDue to the emergence of an international deem seaport in Gwadar, land-locked Afghanistan, and the Central Asian Countries will have an access to the sea while the Middle East, China and Japan would also be facilitated.

Railway TrackPakistan government has planned to construct a new railway Track joining Central Asian Countries with in boosting trade in the region.

Largest international airportPakistan Government has planned one of the biggest international Airports in Gwadar City with many terminals.Gwadar Port

Gwadar port-phase 2

People's Republic of china will soon be initiating the extension work of Gwadar port phase 2 on the completion of this new phase, Gwadar port will be big enough to work

more dynamitically and after trans-shipment and cargo handling service more extensively to the neighboring countries and beyond.