# New Afghan Transit a Game changer for Gwadar Sea Port & CPEC



## AsianLion

*Afghan transit a game changer for Gwadar port*

First Time Pakistan opens Deep Seaport for Afghanistan Goods and Services boosting Afghan Economy


__ https://twitter.com/i/web/status/1217022227541118976
*The Chinese-run port in Pakistan, a vital part of the belt-and-road plan, may have found a path to success.*







On a sunny Tuesday in the third week of January, a cargo ship named _Diyala_ docked at Gwadar seaport, in south-west Pakistan. The enthusiastic port staff quickly unloaded the cargo. When the unloading was finished, Chinese officials operating the port, along with their Pakistani counterparts, posed for a photo with containers in the backdrop. The ship’s arrival received extensive coverage in local media, and the Chinese embassy tweeted about it.

Why are Pakistanis and Chinese so jubilant about one ship arriving at Gwadar port? It marks the beginning of the Afghan transit trade

On 14 January, Gwadar port officially started taking cargo under the Afghanistan-Pakistan Transit Trade Agreement (APTTA). By this agreement, landlocked Afghanistan can import and export goods via Pakistani land routes. The first consignment unloaded at Gwadar port contained chemical fertilizers, which were transported to Afghanistan in trucks at the Chaman border crossing in Balochistan province. This marks the first operational use of Gwadar port for major trade activity, a success for both Pakistan and China.

*Afghan transit cargo can be a major source of revenue, but it’s not enough on its own to pay back the huge investment China has made in the project or to sustain the success of Gwadar port.*

Gwadar, a small coastal town in south-western Balochistan just 600 kilometres from the Strait of Hormuz, attracted global attention when China started building a deep-sea port here in 2002. The first phase of construction was completed in 2007, and in 2013 operations of the port and Gwadar Free Zone were handed over to the China Overseas Port Holding Company (CPOHC). The major breakthrough for Gwadar, however, came in April 2015, when Pakistan and China signed the $50 billion China-Pakistan Economic Corridor (CPEC), dubbed the flagship project of China’s ambitious Belt and Road Initiative (BRI). Providing the shortest land route for sea access to Western China, as well as an alternative shipping route to the Malacca Strait, Gwadar port is the centrepiece of CPEC – without the port, there would have been no CPEC.

Surprisingly, Gwadar failed to achieve economic success in the last 5 years. As a result of armed attacks by Baloch separatists on Chinese interests, bureaucratic red tape, and poor governance in Pakistan, even the supporting infrastructure in Gwadar has not been fully built, and experts had ruled out the prospect of Gwadar succeeding anytime soon. Its use in the Afghan transit trade is therefore seen as the beginning of the economic revival of the project.

There are three main reasons Afghan trade is significant for the Gwadar port project. Firstly, it means that the project has finally started to pay off for its Chinese sponsor. China spent $250 million directly on construction of the port. COPHC gets 91% of revenue from Gwadar for the next 40 years, according to the agreement with Pakistan. The revenue from Gwadar port now coming in was only made possible by the Afghan transit trade.

Secondly, the use of the Gwadar port was made possible only after China lobbied for it with the Afghan government. Over the last four years, China has shown a growing interest in the Afghanistan situation, including inviting Taliban leadership to Beijing for negotiations to broker a settlement. If a peace deal were reached in Afghanistan, then it would result (among other things) in an increase in the volume of Afghan transit trade. China will likely take more interest in seeing an Afghan peace deal with the Taliban when it can also potentially benefit from increased activity at Gwadar port for Afghan transit trade.

Thirdly, the recent success of Gwadar port has effectively put the brakes on the Indian-aided venture of Shahid Beheshti port as a competitor to Gwadar port, 175 kilometres to the west in Chabahar, Iran. India invested $100 million in the development of the port, as a counter to the China-Pakistan partnership at Gwadar. It also invested in building infrastructure connecting Chabahar with Afghanistan. In October 2018, the first shipment of goods was exported by India to Afghanistan through Chabahar port. US sanctions on Iran, however, later made India reluctant to aggressively develop Chabahar port. And with Afghanistan now appearing to prefer Gwadar over Chabahar, India’s scheme is sunk – a geostrategic victory for Pakistan and China.

Afghan transit cargo can be a major source of revenue, but it’s not enough on its own to pay back the huge investment China has made in the project or to sustain the success of Gwadar port. Therefore, it’s crucial that Pakistan and China attract more economic activity for Gwadar port, in the model of a mini-Dubai or a mini–Hong Kong. Afghan transit is only a beginning. The question now is whether Pakistan and China can build on this success.

https://www.lowyinstitute.org/the-interpreter/afghan-transit-game-changer-gwadar-port

*Afghan Transit Trade Starts at Gwadar Port *

The Gwadar port in Pakistan is part of China's Belt and Road Initiative.


Pakistan Waives Restrictions on Afghan Exports: ACCI

Coronavirus Spreads Among Indian Police






*China's embassy in Pakistan on Tuesday in a tweet said that Afghan transit trade has started at Gwadar Port. The first ship full of containers reached Gwadar Port on Tuesday.*

The containers will be loaded onto trucks for transport to Afghanistan through the Pakistani border town of Chaman, VOA reported.

Kabul traditionally has relied on Pakistani overland routes and the two main southern seaports of Karachi and Port Qasim for international trade, under a bilateral deal with Islamabad, known as the Afghan Transit Trade Agreement (ATTA).

However, recent Chinese financial and construction efforts have activated the deep-water port of Gwadar, on the Arabian Sea, which offers a much shorter overland link, particularly to southern regions of Afghanistan, for the rapid delivery of goods.

The port is at the center of the China-Pakistan Economic Corridor (CPEC), which is building Pakistani roads, power plants, economic zones and a major airport in Gwadar to improve connectivity between the two allied nations and the region in general. 

The massive project is hailed as the flagship of Beijing’s trillion-dollar Belt and Road Initiative, which has brought about $30 billion to Pakistan in direct investment, soft loans and grants over the past six years.

*https://tolonews.com/business/afghan-transit-trade-starts-gwadar-port*

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## AsianLion

Amidst the daily grind of grim news relating to Covid-19 infections and deaths has come one welcome development, showing that life goes on.

The news relates to the federal government’s decision to open the Gwadar Port for Afghan Transit Trade. This is a very positive development for several reasons. To begin with, it will enhance capacity utilization of the port. However, the accrual of full benefits of this decision will need a number of allied measures to develop Gwadar’s comparative advantage vis-a-vis Karachi.

*There are two routes for Afghan transit goods: Karachi-Quetta-Chaman-Kandahar and Karachi-Peshawar-Torkham-Jalalabad. Relatively, Gwadar can be more viable for the former destination.*

The distance from Karachi to Quetta and from Gwadar to Quetta is 690 kms and 915 kms, respectively. In the event, transporters would be reluctant to use a route that is longer by 225 km. Additionally, the Gwadar-Quetta route passes through somewhat desolate terrain and offers few facilities for rest and meals compared to the Karachi-Quetta route. Security will also be an overriding concern.

*Gwadar can overcome the above relative handicaps and enhance its economic viability significantly if a direct route is created between Gwadar and the city of Sangin in the southern Helmand province of Afghanistan. The 1,800 kms route is proposed to run south to north from Gwadar to Nokundi in Chagai district and onward to Sangin. The route will pass through Turbat and Panjgur and curve around the Hamun-e-Mashkel seasonal lake.

Sangin, across the Pakistan-Afghanistan border, is a junction town on the highway that connects to Kandahar 150 kms to the east, to Herat 500 kms north-west via Farah, and to Mazar-e-Sharif another 750 kms to the north. The highway network is recently built and reported to be of excellent quality. The Gwadar-Sangin section will open a third route for Afghan transit trade and lead to the development of Sangin as a major commercial centre to the benefit of southern and south-western Afghanistan.*

The benefits to Balochistan and Pakistan will also be manifold. Expanded economic activity in southern Afghanistan will benefit the population of north-western Balochistan via greater trade opportunities and also generate opportunities for the development of Turbat and Panjgur. Gwadar will offer a shorter and faster route from the Saindak and Rikodik copper mines; thereby, further enhancing capacity utilization of Gwadar port.

A major benefit will be to curb the smuggling that Afghan transit trade has spawned, to the immense detriment of Pakistan’s manufacturing sector. Either some of the goods are off-loaded before reaching Afghanistan or they are recycled back to Pakistan. The Gwadar-Sangin route will be at a distance from the markets of Karachi, Lahore, Islamabad and Peshawar and the higher cost of transporting the off-loaded goods will rein in some of the economic incentive to smuggle.

The benefits of the Gwadar-Sangin route will be further enhanced if a railway line is laid along the track. Admittedly, railways are highly capital-cost intensive and the volume of traffic may not justify the monetary rates of return for the particular section. That, however, would be the conclusion of a narrow financial cost-benefit analysis. A broader socio-economic feasibility study is likely to produce a different result.

Relative to road transport, the railway will reduce the time cost of transporting goods to and from Gwadar and Sangin and from the Saindak and Rikodik mines. And railways use one-third less fuel per kilometer of tonnage compared to road transport; thereby, saving foreign exchange.

More specifically, a railway will be instrumental in containing smuggling. A truck can be half emptied while the driver and staff make a shortstop for tea or a meal. A train does not make unscheduled stops; and if it does, it can be monitored via satellite. Flow back of goods to markets in Pakistan will be uneconomical on account of the cost imposed by distance. The net beneficiaries will be Pakistan’s industries.

The security and political benefits need to be taken into account as well. The expansion of economic activity across western Balochistan and across southern Afghanistan will create jobs and raise incomes in both countries, reducing deprivation and disparities. After all, bombarding the area with jobs instead of with drones and gunfire is a more secure method of curbing insurgencies.

The writer was economic adviser to the chief minister Balochistan and also has experience of working in Afghanistan.


__ https://twitter.com/i/web/status/1217022227541118976

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## Clutch

Have to be careful.... Hopefully Gwadar doesn't become an Afghan Drug export port.

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## Hakikat ve Hikmet

Clutch said:


> Have to be careful.... Hopefully Gwadar doesn't become an Afghan Drug export port.


I take one exception: drugs are no worse than cigarettes and alcohol!!!

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## Samlee

Afghan Transit Eventually Means Central Asian Transit and That Eventually Means Oil Gas Pipelines Railway Links All The Way To Russia.

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## Baghial

From the very beginning, the economics of CPEC didn’t make much sense. Three years later, its math makes even less sense, more so because the sums and even the numbers of the Chinese and the Pakistanis don’t match. Increasingly, CPEC is looking like a pyramid scheme in which everyone parties as long as the money keeps flowing in; it is when the payback time comes, that reality starts biting.

For Pakistan, and for China, the payback time is coming. What remains to be seen is who picks the tab, China or Pakistan


smaller projects have also been refused funding by the Chinese. Even on the power projects, there are concerns on payment of tariffs. The Chinese are already breathing down Pakistan’s neck to set up a revolving fund so that their projects don’t become victims of the crippling “circular debt” that has wreaked havoc in the energy sector.

There are also reports that the Chinese private companies and even bankers are asking serious questions about the viability of their investments in Pakistan. Even at the official level, while the magniloquence around CPEC remains unabated, a reality check was clearly visible during the 7th Joint Cooperation Committee




In an effort to explore the causes for the steep cost of electricity in Pakistan, the Imran Khan government has unearthed a scam of over $630 million involving power projects under the China-Pakistan Economic Corridor (CPEC).


government is bound to pay 900 billion Pakistani rupees to power plants under the head capacity payments while it will have to pay a capacity payment of 1500 billion Pakistani rupees by 2025 according to the agreement.

Though the guaranteed profit should not be for more than four to five years, the government and NEPRA has granted guaranteed profit for 25 years, 


*Intervention from China upended Imran Khan’s grand plan to probe power firms. so accountability is put in deep freezer for china,s companies?*
..

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## S.Y.A

Baghial said:


> From the very beginning, the economics of CPEC didn’t make much sense. Three years later, its math makes even less sense, more so because the sums and even the numbers of the Chinese and the Pakistanis don’t match. Increasingly, CPEC is looking like a pyramid scheme in which everyone parties as long as the money keeps flowing in; it is when the payback time comes, that reality starts biting.
> 
> For Pakistan, and for China, the payback time is coming. What remains to be seen is who picks the tab, China or Pakistan
> 
> 
> smaller projects have also been refused funding by the Chinese. Even on the power projects, there are concerns on payment of tariffs. The Chinese are already breathing down Pakistan’s neck to set up a revolving fund so that their projects don’t become victims of the crippling “circular debt” that has wreaked havoc in the energy sector.
> 
> There are also reports that the Chinese private companies and even bankers are asking serious questions about the viability of their investments in Pakistan. Even at the official level, while the magniloquence around CPEC remains unabated, a reality check was clearly visible during the 7th Joint Cooperation Committee
> 
> 
> 
> 
> In an effort to explore the causes for the steep cost of electricity in Pakistan, the Imran Khan government has unearthed a scam of over $630 million involving power projects under the China-Pakistan Economic Corridor (CPEC).
> 
> 
> government is bound to pay 900 billion Pakistani rupees to power plants under the head capacity payments while it will have to pay a capacity payment of 1500 billion Pakistani rupees by 2025 according to the agreement.
> 
> Though the guaranteed profit should not be for more than four to five years, the government and NEPRA has granted guaranteed profit for 25 years,
> 
> 
> *Intervention from China upended Imran Khan’s grand plan to probe power firms. so accountability is put in deep freezer for china,s companies?*
> ..


thank you nawaz sharif. otoh, that "danishwar" ahsan iqbal, what will he say about all of this? he used to spin fancy and grand tales whenever questioned about cpec.

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## Taimoor Khan

Great news.

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## H. Dawary

Very good.

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## Baghial

S.Y.A said:


> thank you nawaz sharif. otoh, that "danishwar" ahsan iqbal, what will he say about all of this? he used to spin fancy and grand tales whenever questioned about cpec.


its not only nawa /zardari
you can count about 10 generals in the same list
dont forget imran khan , he,s singing the same song which was given to nawaz sharif , when general gillani bring him to GHQ , to groom n polish.

same rule , different generals, different candiate. (imran khan)........ but the canary is singing the same song............. we are on same page!

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## AsianLion

*First Afghan-bound transit cargo arrives at Gwadar Port: report*





Photo: Chinese Embassy/Twitter

Gwadar port, a key component of the China Pakistan Economic Corridor (CPEC), has started handling transit cargo to and from Afghanistan, according to Voice of America (VOA).

VOA, citing its sources, reported that the first ship carrying an Afghan shipment arrived at Gwadar on Tuesday. The shipment will be loaded on trucks and sent to Afghanistan through the Pak-Afghan border at Chaman.

Afghanistan has relied on Pakistani land routes as well as its ports for international trade after a bilateral agreement, known as the Afghan Transit Trade Agreement (ATTA), was signed with Islamabad.

The strategically-located Gwadar port became operational in 2016 after China's investment. *The deep sea port offers a shorter overland link to Afghanistan, particularly to southern regions of the country,* said VOA.

“CPEC and the Belt and Road Initiative are promoting regional economic ties,” said the Chinese Embassy in Islamabad while announcing the arrival of the first Afghan shipment at Gwadar.

Citing Pakistani officials, the publication further said that *Pakistan handles approximately 47 per cent of total Afghan exports, while almost 60 per cent of Afghan transit trade goes through the Torkham border crossing.*

Officials believe that Gwadar Port will also boost bilateral trade between the two neighbours.

https://www.thenews.com.pk/latest/598880-gwadar-port-receives-afghanistans-first-transit-cargo-voa

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## AsianLion

*First cargo ship carrying wheat, urea arrives at Gwadar port*
Share:
  




 
* Web Desk *

11:47 AM | May 30, 2020

Special Assistant to the Prime Minister on Information and Broadcasting, Lieutenant General (retired) Asim Saleem Bajwa says first bulk cargo ship "MV Manet" carrying wheat and urea of Afghan Transit trade reached Gwadar this week.

In a tweet on Saturday, he said a dream come true for local economy as it will stimulate host of business activity.

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## Indus Pakistan

AsianLion said:


> Karachi to Quetta and from Gwadar to Quetta is 690 kms and 915 kms


Balloxe. 

https://www.distance.to/Gwādar,Balochistān,PAK/Quetta,Balochistān,PAK
https://www.distance.to/Karachi,Karāchi-District,Sindh,PAK/Quetta,Balochistān,PAK


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## Baghial

S.Y.A said:


> thank you nawaz sharif. otoh, that "danishwar" ahsan iqbal, what will he say about all of this? he used to spin fancy and grand tales whenever questioned about cpec.




burger king are winners!

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## S.Y.A

Indus Pakistan said:


> Balloxe.
> 
> https://www.distance.to/Gwādar,Balochistān,PAK/Quetta,Balochistān,PAK
> https://www.distance.to/Karachi,Karāchi-District,Sindh,PAK/Quetta,Balochistān,PAK


this is the straight line distance. the distance mentioned in the news article is of the land route.

maybe new roads, and building tunnels through mountains of balochistan will offset this issue.


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## AsianLion

What would happen to CPEC via Afghanistan when Taliban take over Afghanistan?


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## Clutch

AsianLion said:


> What would happen to CPEC via Afghanistan when Taliban take over Afghanistan?



I expect it to grow exponentially. The KABUL government was an enemy of Pakistan and CPEC since they were slaves of Hindutva Delhi.

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## Dalit

It sure as hell is going to become a reality now.

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## AsianLion

Clutch said:


> I expect it to grow exponentially. The KABUL government was an enemy of Pakistan and CPEC since they were slaves of Hindutva Delhi.



I hope so after Taliban takeover. Lets see.


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## AsianLion

*Gwadar port offers new opportunity for Afghan economy*

Shortest Route for Afghans to move goods and services from Arabian Sea and Afghanistan

in Port News 28/01/2020








The port of Gwadar now plays a new role, facilitating the transit trade for Afghanistan, by providing a most economical trade route for the war-torn nation.

*Afghan traders have been using two Pakistani ports – Karachi and Port Qasim in Sindh – for the transit trade, but now the Gwadar port in neighbouring Balochistan provides an additional facility, which is closer to Afghanistan, and moreover, it gives quick clearance of their good*s.

The first ship of transit trade for the land-locked country arrived at the Gwadar port recently. Experts in Pakistan believed that the start of Afghan transit trade through Gwadar is a right decision in making the port completely functional to boost regional connectivity and development.

Senator Mushahid Hussain Sayed, the chairman of the Pakistan-China Institute, told Xinhua that utilising Gwadar for Afghan transit trade is a positive and potentially historic development as it underlies the significant role that Gwadar will play for regional economic connectivity.

“This also opens up possibilities of Afghanistan joining CPEC [the China-Pakistan Economic Corridor], which would be welcomed both by Pakistan and China,” the senator said.

He said such trade opportunities augur well for Balochistan as well, since it means closer trade routes and commercial integration and cooperation among neighbours, adding that it would also be a plus for the Afghan peace process, which Pakistan and China strongly support.

The Pakistan Afghanistan Joint Chamber of Commerce & Industry (PAJCCI) said the opening of Gwadar port for the Afghan transit trade will create broader economic viability and choices for business communities.

PAJCCI Chairman Zubair Motiwala described the arrival of the first Afghan transit consignment at Gwadar port destined for Afghanistan as a “major breakthrough” and said the Chinese company at Gwadar has also announced incentives for the Afghan traders.

Motiwala told Xinhua that the success of handling bulk cargoes at Gwadar will pave the way for improving congestion problems in other ports like Karachi and will also nourish competitive landscape that would ensure provision of reasonably priced, high quality services to both domestic and international clients in the region.

The Pakistan Embassy in Kabul has said that the arrival of the Afghan transit goods at Gwadar marks the establishment of a new economical trade link between Pakistan and Afghanistan. Xinhua Source: The Express Tribune


https://www.hellenicshippingnews.com/gwadar-port-offers-new-opportunity-for-afghan-economy/

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## MultaniGuy

Good maneuvering by Pakistan. We should try to win the hearts and minds of the Afghanistani people.


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