Importance of Gwadar Port for Pakistan

Selection of Gwadar for construction of Deep Sea Port. While carrying out feasibility study for development of Gwadar port both Karachi and Bin Qasim were also considered for such development but found not attractive to major shipping agencies due to remoteness from main shipping routes, limitations of draft and comparatively long turn around time. Due to these reasons Gwadar was selected as the site for 3rd commercial port for Pakistan. Geo-Strategic Importance Gwadar port is located about 267 NM West of Karachi. Because of its ideal location at the mouth of gulf and opposite strategic choke points of Strait of Hormuz and Gulf of Oman the port is visualized to become a regional hub serving incoming and out going commercial traffic of Middle East and Gulf countries. The new port of Gwadar will supplement Karachi Port and Port Qasim. It will attract transit and trans-shipment trade from over twenty countries including Srilanka, Bangladesh, Oman, UAE, Saudi Arabia, Qatar, Iraq and Iran. These countries may open their warehouses in Gwadar for export of goods and storing of imported goods for later shipment to their countries. Non Quantifiable Benefits of Port. Details of indirect non quantifiable benefits which the people of region will get and would accrue to the national economy from this port. Duty Free Port & Free Economic Zone/Incentives. Keeping in view the significance of Gwadar port, the government has declared Gwadar as a Duty Free Port and Free Economic Zone. A separate allocation of one billion rupees was made in the budget for the fiscal year 2004-2005 for the construction of the export zone and Gwadar industrial city. This has greatly accelerated the pace of development in the area. The other incentives announced by Govt are summarized as under: Positive approach towards private sector involvement. Infrastructure development on BOT/BOO basis. 100% profit repatriation. Tax holidays for ten years from date of commencement of commercial operations. 100% profit repatriation. Ownership rights. Flexible labour regulations. Subsidy on utilities. Complete exemption from duty & sales tax on imported plants & machinery for 10 years. Capital gains will be exempted from tax for 5 years. No local octroi or export tax leviable by local Govt. Access to CARs. Gwadar Port located in proximity of Arabian Gulf and Central Asian Republics provide it unique opportunity to serve both. Pakistan needs to capitalize on them through better diplomatic ties with Arab states and CARs. It is therefore anticipated that oil reserves and other resources of CARs would gradually become the focus of world attention in coming years. However, in case of â€Å"exports to and from CARs† a peaceful and stable Afghanistan is must. The port will also help in promoting trade with Gulf States possessing 63% of world’s oil reserves and will prove instrumental in promoting trans-shipment essentially of containerized cargo besides unlocking the development potential for hinterland. The most important factor that makes Gwadar Port strategically unique is the location with respect to other major ports in the region, which are all located on the other side of the sea. Gwadar port being towards north can easily provide services and facilities to CARs, Afghanistan and China. Upcoming Fishing Harbour/Industry. Planned fishing harbour/industry linked with this port will facilitate efficient exploitation of our 960 KM of long coast which would give boost to fish and crab exports and would promote food processing industries as well. Gwadar could also be a potential source of gas and oil exploitation. [1] These areas clearly indicate the vast potential which should be exploited and will help contribute towards national economy. Instability in Gulf. Gulf region and CARs contain one of the largest oil and gas resources of the world respectively. Gulf countries in particular, have capitalized on it by constructing major commercial centers with bulk port facilities. Pakistan, could not cash on this opportunity earlier due limited resources which Gulf countries did and so have well established ports these days. Gulf presently is badly exposed to world due instability in region and in case of blockade of Gulf due to any reason, the Gwadar port would become more important due to only choice left. Beside this, sour relations of Iran with western countries and her territorial disputes with Iraq are enough reasons for international community to opt for Gwadar rather than any Iranian port in future. Gwadar Port is therefore expected to act as a vital link to China, Afghanistan and Central Asian Republics throughout the year. Due to these factors Gwadar is going to be the necessity of major shipping competitors as it is the most efficient route to Indian Ocean for world markets. Gwadar Port can therefore become a viable option for wor ld community due to the following reasons: It is not within Gulf, thereby reducing chances of being blocked. It provides shortest access to the land locked Afghanistan and CARs. It is located in close proximity of other regional ports of the Gulf. Trans-shipment of Bulk Cargo. Oil Storage, Refinery and Petrochemical related industries/installations. Export processing and Industrial Zone. Export of minerals and live stock. Services ie hotel accommodation, tourism etc. Fishing industry. Ship repairs and Ship building. Construction of Warehouses and Storages. Beach Industries. Port Related Facilities. Construction of under mentioned facilities/industries is directly linked with the construction of Gwadar Port and will provide employment opportunities for its locals and the region. Trade pact with Tashkent. Considering importance of trade from CARs vis -a-vis up coming Gwadar port. Govt of Pakistan (GOP) has very rightly concluded a trade pact with Tashkent. In this Pakistan and Uzbekistan have agreed to enter into a trilateral transit trade agreement with Afghanistan to benefit from the Gwadar port facility and land routes. As per the joint communique issued after meeting of reps of both sides on 29-30 Dec 2005, a ‘Joint Ministerial Commission’ has been formed to formulate details/trade quantum and the modus operandi. Development Plans/Investment Opportunities For Balochistan By making Gwadar the pivot of regional trade, Pakistan will also attract considerable investment into its most under developed province. These funds will allow construction of roads and railways, linking the coastal region with rest of the Pakistan, Iran and Afghanistan and will also, facilitate cultivation of vast regions and exploration of natural resources. This would ultimately help socio-economic uplift of locals through various development projects. The government on 3 October, 2004 has also announced Rs 3. 00 Bn grant for speeding up development activities for overall uplift of Balochistan. Beside these the development of Gwadar port would also benefit the overall economy of province/country and will unlock its potentials. It is anticipated that around 2. 5 million people will get jobs with start of this project. The government is setting technical training centres in area to train people. Although Gwadar is comparativ ely free from tribal influence, however people of area have two major concerns in their minds. Firstly, influx of people from rest of the country may throw them in minority. Secondly, local population lacks in education and other skills, which may affect their career prospects. They have a fear that people coming from other areas may grab the major share of economic opportunities. General public therefore show a resentment against government policies in form of bomb blasts and demonstrations/destruction of sui gas installation etc, however once economic lifts become visible then people would certainly realise their short sightedness. Oil Factor and the Alternate Port. Pakistan’s present population is arround160 Million. With the present growth rate of population, the country’s oil needs are increasing continuously as well. The fact that our dependence on POL gets further compounded as most of our defense needs are also met through it. National oil reserves are also dependent on the continuous POL from abroad. The war stamina depends on the availability of POL to armed forces for effective fighting. Therefore, keeping in mind the importance of SLOCs for provision of uninterrupted oil supply, Gwadar port would provide much-needed alternate for Karachi/ Qasim ports.