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Gwadar port city development project | News and Updates
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GHOST RIDER
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Balochistan potentials & prospects
Alam Rind
Friday, January 27, 2012
Reko Diq copper-cum-gold mine, Gwadar port and untapped oil and gas resources of Balochistan have the potential to turn around the economy of the province and that of the country in a matter of few years. Unfortunately, these mega projects having far reaching economic implications for the country have been webbed in by political compulsions and legal lacunas. It is high time that the people and the government of Pakistan decades’ to break themselves free from the entwinements of the major power and take control of their own destiny. We must stop blaming regional and international players for lack of development in the province. The government took refuge behind such pretexts for last sixty-three year, which only contributed towards worsening of the situation in the province.
Back in October 2011 Chief Minister of Balochistan Nawab Aslam Raisani had said, “Some international forces also did not want the port (Gwadar) to become fully functional because they felt it would be detrimental to their interests.” Such notions reflect defeatist attitude. What people demand from present leadership is that it must take charge of the situation and work for the betterment of the people irrespective of the odds.
Feasibility study of Gwadar Port was started in 1993, however, its construction commenced in 2002 with Chinese collaboration. Construction work was completed in 2007, but ironically without necessary road and rail infrastructure. Due to lack of connectivity the port isn’t fully operational even in 2012. A facility that has the potential to turnaround the economy of the country is lying redundant. Obsequiously Musharraf government opted to award the contract to operate the port to the Port of Singapore Authority (PSA) for forty years, which will terminate in 2047. The PSA has done nothing to improve the operations of the port.
Nawab Aslam Raisani is seeking cancellation of the contract with the PSA International Ltd on the ground that the deal signed was “one-sided.” The contract was also challenged in the Supreme Court and the matter is pending. In spite of all these efforts the operations of the port will remain hostage to this contract unless government decides to resolve this issue at priority.
The major impairment in the operationalisation of Gwadar Port is lack of communication infrastructure connecting it with national road and rail network. The port was to have three road links connecting it with Karachi, Punjab and with Quetta. So far only coastal highway connecting Gwadar with Karachi has been completed. This road has no or very little value from the point of view of operationalisation of the port as it would be illogical to get the cargo off loaded at Gwadar and then transport the same to Karachi by road.
The work on Gwadar-Turbat-Hoshab section of M-8 is likely to be completed by Dec 2012. However, work on 414km long Hoshab-Awaran-Khuzdar section of M-8 will start in second phase. Therefore, no time frame can be given as to when the port would be connected with Punjab. Work on 454km long Hoshab-Panjgur-Naag-Basima-Sorab section of M-8 connecting Gwadar with Quetta is scheduled to be completed by June 2014. Gwadar Port was planned to be linked with railway network at Mastung located on Quetta-Taftan section for which only feasibility study has been completed. It is any bodies guess that how much time it will take to lay 901 km of railway track in rugged terrain of Balochistan. These disappointing facts reflect on the criminal neglect by the decision makers.
There is no doubt that the government is conscience of the deprivations of the people of Balochistan. It is also struggling to make up for the excesses committed against them. Implementing of Aghaz-i-Huqooq-i-Balochistan and that of 7th NFC Award are the manifestations of their sincerity. Army is also putting in its best and has made remarkable contributions especially in education sector. Their efforts range from setting up of a medical college to establishment of technical institutes to impart skills to Baloch youth. These efforts by the government and army will definitely support and facilitate the provincial government. But the void is so large that these efforts are getting diluted and the benefits are trickling down to masses at a very slow pace.
In such a situation we cannot afford to miss the opportunities presented by projects like Gwadar Port. This project will remain relevant till the time alternates aren’t fully operational. Iran is working to link Chabahar free trade area to Iran’s main rail network, which is connected to Central Asia and Afghanistan. This would provide more capacity for Chabahar to promote faster logistics. With the emplacement of railway facility, Chabahar will be better linked with CARs through Turkmenistan bypassing volatile Afghanistan. That will also reduce the significance of Gwadar Port. If we want to accrue optimum benefit from operationalising of Gwadar Port, construction of road and rail links in the shortest possible time should be our top priority.
Alam Rind
Friday, January 27, 2012
Reko Diq copper-cum-gold mine, Gwadar port and untapped oil and gas resources of Balochistan have the potential to turn around the economy of the province and that of the country in a matter of few years. Unfortunately, these mega projects having far reaching economic implications for the country have been webbed in by political compulsions and legal lacunas. It is high time that the people and the government of Pakistan decades’ to break themselves free from the entwinements of the major power and take control of their own destiny. We must stop blaming regional and international players for lack of development in the province. The government took refuge behind such pretexts for last sixty-three year, which only contributed towards worsening of the situation in the province.
Back in October 2011 Chief Minister of Balochistan Nawab Aslam Raisani had said, “Some international forces also did not want the port (Gwadar) to become fully functional because they felt it would be detrimental to their interests.” Such notions reflect defeatist attitude. What people demand from present leadership is that it must take charge of the situation and work for the betterment of the people irrespective of the odds.
Feasibility study of Gwadar Port was started in 1993, however, its construction commenced in 2002 with Chinese collaboration. Construction work was completed in 2007, but ironically without necessary road and rail infrastructure. Due to lack of connectivity the port isn’t fully operational even in 2012. A facility that has the potential to turnaround the economy of the country is lying redundant. Obsequiously Musharraf government opted to award the contract to operate the port to the Port of Singapore Authority (PSA) for forty years, which will terminate in 2047. The PSA has done nothing to improve the operations of the port.
Nawab Aslam Raisani is seeking cancellation of the contract with the PSA International Ltd on the ground that the deal signed was “one-sided.” The contract was also challenged in the Supreme Court and the matter is pending. In spite of all these efforts the operations of the port will remain hostage to this contract unless government decides to resolve this issue at priority.
The major impairment in the operationalisation of Gwadar Port is lack of communication infrastructure connecting it with national road and rail network. The port was to have three road links connecting it with Karachi, Punjab and with Quetta. So far only coastal highway connecting Gwadar with Karachi has been completed. This road has no or very little value from the point of view of operationalisation of the port as it would be illogical to get the cargo off loaded at Gwadar and then transport the same to Karachi by road.
The work on Gwadar-Turbat-Hoshab section of M-8 is likely to be completed by Dec 2012. However, work on 414km long Hoshab-Awaran-Khuzdar section of M-8 will start in second phase. Therefore, no time frame can be given as to when the port would be connected with Punjab. Work on 454km long Hoshab-Panjgur-Naag-Basima-Sorab section of M-8 connecting Gwadar with Quetta is scheduled to be completed by June 2014. Gwadar Port was planned to be linked with railway network at Mastung located on Quetta-Taftan section for which only feasibility study has been completed. It is any bodies guess that how much time it will take to lay 901 km of railway track in rugged terrain of Balochistan. These disappointing facts reflect on the criminal neglect by the decision makers.
There is no doubt that the government is conscience of the deprivations of the people of Balochistan. It is also struggling to make up for the excesses committed against them. Implementing of Aghaz-i-Huqooq-i-Balochistan and that of 7th NFC Award are the manifestations of their sincerity. Army is also putting in its best and has made remarkable contributions especially in education sector. Their efforts range from setting up of a medical college to establishment of technical institutes to impart skills to Baloch youth. These efforts by the government and army will definitely support and facilitate the provincial government. But the void is so large that these efforts are getting diluted and the benefits are trickling down to masses at a very slow pace.
In such a situation we cannot afford to miss the opportunities presented by projects like Gwadar Port. This project will remain relevant till the time alternates aren’t fully operational. Iran is working to link Chabahar free trade area to Iran’s main rail network, which is connected to Central Asia and Afghanistan. This would provide more capacity for Chabahar to promote faster logistics. With the emplacement of railway facility, Chabahar will be better linked with CARs through Turkmenistan bypassing volatile Afghanistan. That will also reduce the significance of Gwadar Port. If we want to accrue optimum benefit from operationalising of Gwadar Port, construction of road and rail links in the shortest possible time should be our top priority.
American Pakistani
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American Pakistani
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American Pakistani
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GHOST RIDER
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Gwadar Port
Gwadar Port is Pakistan’s largest infrastructural project since independence.
Government of Pakistan allocated 20.3 million dollar in current fiscal budget 2006-07.
The total cost of project may go up to 2.2 billion dollars.
Pakistan will earn 60 billion dollar per year just on transaction of trade after the complete operation of Gwadar Port.
Government of Pakistan declares Gwadar Port Duty Free and Economic Free Zone.
The first phase of Gwadar Port has almost complete on the amount of 300 million dollar and will operational at the end of this year.
Gwadar
Beijing is also investing billions of dollars in western China a grand 5-year plan to develop it and Gwadar is a necessarily part of that 5 year plan.
Pakistan has invested more than an amount of 2 Billion dollars to upgrade Gwadar and completion of related development program in the last two years. Just Provincial Government of Balochistan is spending 4.5 billion Rupees in Gwadar.
Railway
Gwadar to Koh-e-taftan Railway Track feasibility is being worked out and approximately 480 billion rupees will be spent on this project. Gwadar Port to Dulbundien Railway Line survey is under process and government allocated amount of 75 billion Rupees for this survey. Pakistan decided for better rail link with Iran, rehabilitates 638 Km long Quetta Zahidan section on amount of 13 billion Rupees. The government also working 146 KM long Quetta Chaman Railway line to trade Central Asian States and it will cost of 80 Billion Rupees. Gwadar will be Rail linked with Europe via Iran and Turkey. China and Pakistan are opening 4 new passenger and Cargo rail road, 2 cargo routes will Gwadar Port to Xijang province of China.
Water
Wapda is investing an amount of 7 million dollars on Mirani Dam Project. An amount of 37 crore is being spent on Shadi Core Dam and billion of rupees on rehabilitation of Onkara Dam. Government is also spending 6 corers on D-Selination plants and also also a plan of 100 Km long pipe line from sundser to Gwadar. Sod Dam is constructed with amount of 100 million rupees that will also irrigate 3400 acres land.
Roads
The construction of 2600 KM long Asian Highway with an amount of 35 billion Rupees has been started. Worth of billion Rupees spent on Coastal Highway that has been completed in 4 phases, the second phase is under process and frontier works has started work on Gwadar to Pasni road. Turbat Hoshab motorway will complete in this year. In Gwadar 4 main highways, Main Boulevard, Jinnah Avenue, Marine Drive and Balochistan Broadway have been completed with amount of billion rupees, almost 70% of work has of these roads has been completed. Gwadar to Iran road is under construction and will be completed in 2 years. 58 Crore rupees have been spent on syed abad, kulg, kulmat and kupper to link Coastal Highway. The major construction company of Middle East will construct the 800 Km long Gwadar, Quetta, Sukkhur Express Way.
Electricity
This year Wapda will start work to build 4 new Grid Stations in Gwadar. Pakistan and Iran signed an agreement; Pakistan will purchase 100 Mega Watt electricity from Iran for Gwadar. A well equipped grid station will be built on Gwadar Port. 2 billion rupees will be spent on 70 Km long 220 KW power line. 24 Mega Wat Grid station will be built in Gwadar industrial Estate.
Gas
LPG Gas has been supplying to Gwadar since March 2006 with an amount of 1 billion Rupees.
Industry
The first industrial estate of the emerging port city of Gwadar will be functional by the end of this year. In the first phase; a special committee had allotted 1,136 acres of land to industrialists while 455 applications are pending. The Balochistan government has earmarked over 3,000 acres land for the estate. Pakistan’s biggest oil refinery worth if billion rupees will be set up in Gwadar and it has capacity refines 60,000 barrel oil per day.
Sports
Work on construction of Sports Complex is continuing with amount of Rupees 5 Corer, and work on building of an international cricket stadium will start soon.
Education
The government has planed to establish 1 IT management University, Engineering College, 2 Degree colleges, Medical College with 200 beds, Islamic centers, 20 primary and high schools for boys and girls and Central public library in Gwadar.
Air Service
PIA has purchased 7 new ATR turbo plane for Gwadar and Air Blue has started daily 2 flights from Karachi to Gwadar.
Hospital
Old hospital is being up graded and 8 new hospitals and fitness centers will construct.
Air Port
New International standard Airport is going to be built in Gwadar. Government of Pakistan has allocated 563.35 million rupees and Oman provides 2.3 million dollar for the construction of new Airport.
IT Center
An IT Center will be established in Gwadar.
Ferry Service
Pakistan and Iran will discuss the possibility of starting a ferry service between Iranian port cha bahar and Gwadar Port of Pakistan.
Telephone
PTCL has expanded 300 land lines in telephone exchange in Gwadar, and has forward of the feasibility of 10,000 more line to federal government. For fastest Link Karachi to Gwadar Fiber Optic line has been completed for Gwadar.
Other projects
Government is spending 55.5 Corer Rupees on cultural center and other related projects in Gwadar. Pear Continental has been completed and its formal inauguration is in coming month. National Commission for Human Development started its projects with an amount 845 million Rupees in Gwadar. House Building Finance Cooperation is investing in 2 major projects in Gwadar. 150 patrol Pumps and hotel will be built on Makran Coastal Highway.
alibaz
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Ghost rider great job done. Your pictures remind me of my two visits to Gawadar, the place is a beauty. What all we need is to connect this city with rest of Pakistan through rail and road. It is very unfortunate that after Musharraf no one has really added any thing to this place. Considering it's better climate, provincial capital may permanently shifted here within three to four years after building necessary infrastructure. Unfortunately present Federal and provincial governments seem absolutely uninterested about the city. Capital capital nota hai cahhi Quetta mein ho ya Gawadar mien.
TOPGUN
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Ghost Rider thx for bro for the info awsome work you have done appreciate it .
GHOST RIDER
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Omar1984
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Gwadar Port : Hidden forces creating hurdles in development: MNAs
ISLAMABAD: The legislators on Thursday expressed their apprehensions that some hidden forces are behind the scene creating hindrance in the full functionality of Gwadar Port, which is already developed but cannot complete its roads connectivity with rest of the country.
Members of the National Assembly Standing Committee on Ports and Shipping expressed these views during a meeting under the chairmanship of Rana Mahmood-ul-Hassan.
The members said some friendly neighbour countries are also involved in disrupting the smooth functionality of the port, which is in the best interest of the country. When the government wanted to develop the Karachi Port, same types of hurdles were created by neighbouring countries. However, the members stressed for creation of unity and fully operational the Gwadar Port. Everyone has to keep the national interest on top.
MNA Nasir Ali Shah claimed there will be no example of any port in the world, which is constructed in instalments. He said functionality of this port is not the priority of the government. Gwadar Port will not be completed by 2025 if the government does not allocate and release funds for Gwadar connectivity roads network. Without road connectivity, he said this port is a total failure and all the money spent over will be a waste. He also expressed his astonishment over the fact that Port of Singapore earned more money than the port authority itself. Like Sandak and Reko Diq, these foreigners just took away the resources of Balochistan and the people of the area are left at the mercy of nature.
Chairman of the committee said if the prime minister can approve Rs 47 billion for Multan Package then he should also approve special funds for construction of Gwadar roads network.
Officials of the National Highway Authority (NHA) briefed the committee about its ongoing construction of roads in Balochistan. They said that development works on Makran Coastal Highway was in progress but the work was delayed due to non-availability of funds. The 2010 floods resulted in a cut in Public Sector Development Programme (PSDP) 2010-11 and the NHA funds were cut by 50 percent from Rs 36 billion to Rs 18 billion last year.
Such a cut of funds badly affects the progress on construction of roads across the country including Balochistan. The officials of NHA also informed the committee that a contractor on Makran Coastal Highway was killed. The law and order creates hurdles in execution of the project, which further delay the completion of the project.
The NHA requires Rs 2 billion urgently for this project and the government allocated Rs 1.5 billion in the PSDP 2011-12, which also prolongs the time period of completion of this national importance project.
MNA Fouzia Wahab speaking on the occasion said that under the new National Finance Commission Award, the share of Balochistan province is increased from Rs 35 billion to Rs 90 billion. Apart from these amounts, she said the government also allocated more funds under special package for Balochistan. The provincial government of Balochistan has to spare some money for this important project because major benefits of it will go to the province. Funds generation for the government is the most difficult job because imposing new taxes is strongly resisted by the people. Ports and Shipping secretary informed the committee that up till now 105 containers enter the country through Gwadar Port and each container generates employment to 240 persons. Only urea fertilizer, wheat and sugar are imported into the country through this port.
MNA Nosheen Saeed informed the committee that when Pakistan stopped NATO containers, it cost the forces $500 per container while transporting through other routes. Why is Pakistan not demanding such compensation while allowing NATO containers to pass through using our network. Same is the case of Gwadar Port, she said if developed will also benefit trade with China and India. There is great potential and stressed that the port road connectivity might be completed earlier.
Chairman of the committee decided to hold the next meeting in Gwadar where all stakeholders will be briefed by the committee and efforts will speed up the work on its road construction.
Daily Times - Leading News Resource of Pakistan
ISLAMABAD: The legislators on Thursday expressed their apprehensions that some hidden forces are behind the scene creating hindrance in the full functionality of Gwadar Port, which is already developed but cannot complete its roads connectivity with rest of the country.
Members of the National Assembly Standing Committee on Ports and Shipping expressed these views during a meeting under the chairmanship of Rana Mahmood-ul-Hassan.
The members said some friendly neighbour countries are also involved in disrupting the smooth functionality of the port, which is in the best interest of the country. When the government wanted to develop the Karachi Port, same types of hurdles were created by neighbouring countries. However, the members stressed for creation of unity and fully operational the Gwadar Port. Everyone has to keep the national interest on top.
MNA Nasir Ali Shah claimed there will be no example of any port in the world, which is constructed in instalments. He said functionality of this port is not the priority of the government. Gwadar Port will not be completed by 2025 if the government does not allocate and release funds for Gwadar connectivity roads network. Without road connectivity, he said this port is a total failure and all the money spent over will be a waste. He also expressed his astonishment over the fact that Port of Singapore earned more money than the port authority itself. Like Sandak and Reko Diq, these foreigners just took away the resources of Balochistan and the people of the area are left at the mercy of nature.
Chairman of the committee said if the prime minister can approve Rs 47 billion for Multan Package then he should also approve special funds for construction of Gwadar roads network.
Officials of the National Highway Authority (NHA) briefed the committee about its ongoing construction of roads in Balochistan. They said that development works on Makran Coastal Highway was in progress but the work was delayed due to non-availability of funds. The 2010 floods resulted in a cut in Public Sector Development Programme (PSDP) 2010-11 and the NHA funds were cut by 50 percent from Rs 36 billion to Rs 18 billion last year.
Such a cut of funds badly affects the progress on construction of roads across the country including Balochistan. The officials of NHA also informed the committee that a contractor on Makran Coastal Highway was killed. The law and order creates hurdles in execution of the project, which further delay the completion of the project.
The NHA requires Rs 2 billion urgently for this project and the government allocated Rs 1.5 billion in the PSDP 2011-12, which also prolongs the time period of completion of this national importance project.
MNA Fouzia Wahab speaking on the occasion said that under the new National Finance Commission Award, the share of Balochistan province is increased from Rs 35 billion to Rs 90 billion. Apart from these amounts, she said the government also allocated more funds under special package for Balochistan. The provincial government of Balochistan has to spare some money for this important project because major benefits of it will go to the province. Funds generation for the government is the most difficult job because imposing new taxes is strongly resisted by the people. Ports and Shipping secretary informed the committee that up till now 105 containers enter the country through Gwadar Port and each container generates employment to 240 persons. Only urea fertilizer, wheat and sugar are imported into the country through this port.
MNA Nosheen Saeed informed the committee that when Pakistan stopped NATO containers, it cost the forces $500 per container while transporting through other routes. Why is Pakistan not demanding such compensation while allowing NATO containers to pass through using our network. Same is the case of Gwadar Port, she said if developed will also benefit trade with China and India. There is great potential and stressed that the port road connectivity might be completed earlier.
Chairman of the committee decided to hold the next meeting in Gwadar where all stakeholders will be briefed by the committee and efforts will speed up the work on its road construction.
Daily Times - Leading News Resource of Pakistan
Omar1984
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PDWCP – Vision for future
The long awaited deep sea container port project, Pakistan Deep Water Container Port (PDWCP) at Keamari in Karachi is well in progress and is reported as per print media to bearing fruit by the first quarter of 2014. Karachi Port Trust (KPT) will have spent close to $1 billion on the project to bring this component of our country’s logistics vision to fruition. KPT has now established the key infrastructure by building the breakwater and dredging a new channel, which will pave the way for modular addition of capacity. According to the feasibility study by UK based consultants, Royal Haskoning, PDWCP’s planned six phases shall be capable of handling up to 10 million TEUs (twenty foot equivalent box units) upon their completion. Phase I of PDWCP was awarded to Hong Kong based Hutchison Port Holdings following competitive bidding.
Hutchison is said to be independently investing up to $500 million to build and equip the terminal. This is probably amongst the biggest foreign direct investment coming into the country at a time when other investors have exited Pakistan and adopted a wait and see policy. When Phase I is fully completed, it shall be capable of handling 3.1 million TEUs. It is planned for the facility to have a draft of 18 metres capable of handling the largest container ships in the world and shall be the biggest source of revenue to KPT.
As a Pakistani, I am proud of the fact that our country will have the most advance container handling facilities in the West region of the Indian sub-continent. Years of hard work by KPT and others have finally put our country on the world maritime map with PDWCP being Pakistan’s latest success stories. To me, this is just the beginning of a major vision of our country. Pakistan is blessed with a strategic location as the gateway of goods and people to Afghanistan, Central Asia and beyond. These future terminals will also have the capability to handle container traffic for China’s western region. However, such a blessing will be wasted if we do not plan our limited resources to gain maximum benefits. By this, I mean that we have to ensure that expenditures are incurred in the most efficient manner. As I discussed in the foregoing paragraph, once the key infrastructure is built for PDWCP, modular additions can be made using the same breakwater and channel resulting in substantially lesser investment when adding new capacity. The success of this port shall also require adequate road and rail connectivity to upcountry destinations and improvements in logistics management techniques.
While we forge ahead with major investment in PDWCP, there are discussions about adding further capacity to enhance existing port capacity at our ports. Furthermore, there are discussions to build a third container terminal at Port Qasim. One has to ask if our nation is spending its limited resources wisely to avoid excess capacity. Our GDP growth is not satisfactory and container volumes are registering a downward trend, in particular loosing 2.0 Lac TEUs of NATO / ISAF cargo, which is presently congesting port awaiting decision to open transit to Afghanistan. There is the real danger of uncontrolled expansion of cargo handling facilities. One has to learn from the mistakes of Vietnam, Korea and Rotterdam, where currently, there is a fatal excess of capacity, which is driving down the local port’s revenues due to bad decision making by its management and in the long term, may result in driving away foreign investments. Pakistan’s port authorities would be well advised to avoid a similar mistake. The example of Gwadar should also provide lessons for all. Much has been debated as to the wastage caused by building Gwadar, which has been left non-operational except handling TCP (Trading Corporation of Pakistan) government cargo in bulk where logistic is heavily subsidised at the cost of poor tax payers. The subsidy is said to be around Rs2,655 per tonne against Rs395 per tonne from Karachi. Thus, an excess liability/subsidy of Rs2,260 per tonne is being paid on cargo discharged at Gwadar. The searching question is how long we can afford logistic subsidy bearing in mind that Gwadar Port was inaugurated in 2007. This wastage is due to policy making failure by the government to plan properly. The project was doomed from the start, as Gwadar has no industries and the required population base to support the generation of container traffic. The absence to date of road and rail links also raises questions about the project’s feasibility. The provision of these links is expected to cost several times more than the cost of the port itself. It is now evident that the predictions made by several senior port experts about Gwadar port’s failure have proved to be true. Even as early as 2001, it was advised to proceed with PDWCP instead of throwing away over a billion dollars on Gwadar port.
Pakistan is a gateway for the flow of goods and people from the sea to Central Asia and beyond. I was representing the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) as a transport expert at a meeting of Economic Cooperation Organisation (ECO) held in Karachi on 19 November 2011, an event sponsored by the FPCCI. Iranian and Turkish delegations promoted their ports extremely well during that meeting. Iranians were well prepared, promoting very well their Chah-Bahar port to ECO participating countries. In particular, they marketed well the use of Shahid Beheshti Port for handling of cargo bound for Central Asian land locked countries. At the same event, Turkey promoted Mersin Port, but Pakistan government lost the opportunity to promote our ports. We need to induce interest by through planned marketing efforts to show maritime facilities in Pakistan to induce ECO countries and to increase our share in regional trade. We must launch our marketing initiative to cater ECO countries to use our Deep Water Port capacity to boost our volumes by making in-roads in ECO countries. Such marketing efforts are needed to ensure the success of PDWCP and bring benefits to the people of Pakistan where job creation is so desperately needed.
Having spent so much energies and a planned injection of $1.6 billion, there are several more matters that we, as a nation, need to do to cement the foundations necessary to build a world class port facility. I have expounded these potential initiatives in my previous writings. Firstly, it is imperative that there be serious efforts to build the connecting roads and other infrastructure to cater for efficient cargo flow enabling the full utilisation of PDWCP. Failing such infrastructure, PDWCP will not realise its full potential. Secondly, we must afford the legal status and recognition a deep sea port deserves by enacting a Deep Sea Port Act. It would also confer recognition to the men and women who had toiled and sacrificed to make the deep sea port a success. Such a legal status should form the sound basis for other legislation to attract further investment in other economic sectors and to empower the appropriate authorities to expedite bold initiatives to bring our ports to world class competitiveness. Thirdly, there is need to amend the Customs Act such as to make Pakistani ports a viable option and place them in a fighting chance to get a piece of the trans-shipment cargo market vis-à-vis other ports the region.
The writer is Ex Additional Secretary and Director General, Ministry of Ports and Shipping. He had also been the Chairman of Gwadar Port. Currently, he is a member Board of Governors, World Maritime University Malmao (Sweden), while he is also a member of IMO Secretary General’s Panel of Experts, London
PDWCP
The long awaited deep sea container port project, Pakistan Deep Water Container Port (PDWCP) at Keamari in Karachi is well in progress and is reported as per print media to bearing fruit by the first quarter of 2014. Karachi Port Trust (KPT) will have spent close to $1 billion on the project to bring this component of our country’s logistics vision to fruition. KPT has now established the key infrastructure by building the breakwater and dredging a new channel, which will pave the way for modular addition of capacity. According to the feasibility study by UK based consultants, Royal Haskoning, PDWCP’s planned six phases shall be capable of handling up to 10 million TEUs (twenty foot equivalent box units) upon their completion. Phase I of PDWCP was awarded to Hong Kong based Hutchison Port Holdings following competitive bidding.
Hutchison is said to be independently investing up to $500 million to build and equip the terminal. This is probably amongst the biggest foreign direct investment coming into the country at a time when other investors have exited Pakistan and adopted a wait and see policy. When Phase I is fully completed, it shall be capable of handling 3.1 million TEUs. It is planned for the facility to have a draft of 18 metres capable of handling the largest container ships in the world and shall be the biggest source of revenue to KPT.
As a Pakistani, I am proud of the fact that our country will have the most advance container handling facilities in the West region of the Indian sub-continent. Years of hard work by KPT and others have finally put our country on the world maritime map with PDWCP being Pakistan’s latest success stories. To me, this is just the beginning of a major vision of our country. Pakistan is blessed with a strategic location as the gateway of goods and people to Afghanistan, Central Asia and beyond. These future terminals will also have the capability to handle container traffic for China’s western region. However, such a blessing will be wasted if we do not plan our limited resources to gain maximum benefits. By this, I mean that we have to ensure that expenditures are incurred in the most efficient manner. As I discussed in the foregoing paragraph, once the key infrastructure is built for PDWCP, modular additions can be made using the same breakwater and channel resulting in substantially lesser investment when adding new capacity. The success of this port shall also require adequate road and rail connectivity to upcountry destinations and improvements in logistics management techniques.
While we forge ahead with major investment in PDWCP, there are discussions about adding further capacity to enhance existing port capacity at our ports. Furthermore, there are discussions to build a third container terminal at Port Qasim. One has to ask if our nation is spending its limited resources wisely to avoid excess capacity. Our GDP growth is not satisfactory and container volumes are registering a downward trend, in particular loosing 2.0 Lac TEUs of NATO / ISAF cargo, which is presently congesting port awaiting decision to open transit to Afghanistan. There is the real danger of uncontrolled expansion of cargo handling facilities. One has to learn from the mistakes of Vietnam, Korea and Rotterdam, where currently, there is a fatal excess of capacity, which is driving down the local port’s revenues due to bad decision making by its management and in the long term, may result in driving away foreign investments. Pakistan’s port authorities would be well advised to avoid a similar mistake. The example of Gwadar should also provide lessons for all. Much has been debated as to the wastage caused by building Gwadar, which has been left non-operational except handling TCP (Trading Corporation of Pakistan) government cargo in bulk where logistic is heavily subsidised at the cost of poor tax payers. The subsidy is said to be around Rs2,655 per tonne against Rs395 per tonne from Karachi. Thus, an excess liability/subsidy of Rs2,260 per tonne is being paid on cargo discharged at Gwadar. The searching question is how long we can afford logistic subsidy bearing in mind that Gwadar Port was inaugurated in 2007. This wastage is due to policy making failure by the government to plan properly. The project was doomed from the start, as Gwadar has no industries and the required population base to support the generation of container traffic. The absence to date of road and rail links also raises questions about the project’s feasibility. The provision of these links is expected to cost several times more than the cost of the port itself. It is now evident that the predictions made by several senior port experts about Gwadar port’s failure have proved to be true. Even as early as 2001, it was advised to proceed with PDWCP instead of throwing away over a billion dollars on Gwadar port.
Pakistan is a gateway for the flow of goods and people from the sea to Central Asia and beyond. I was representing the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) as a transport expert at a meeting of Economic Cooperation Organisation (ECO) held in Karachi on 19 November 2011, an event sponsored by the FPCCI. Iranian and Turkish delegations promoted their ports extremely well during that meeting. Iranians were well prepared, promoting very well their Chah-Bahar port to ECO participating countries. In particular, they marketed well the use of Shahid Beheshti Port for handling of cargo bound for Central Asian land locked countries. At the same event, Turkey promoted Mersin Port, but Pakistan government lost the opportunity to promote our ports. We need to induce interest by through planned marketing efforts to show maritime facilities in Pakistan to induce ECO countries and to increase our share in regional trade. We must launch our marketing initiative to cater ECO countries to use our Deep Water Port capacity to boost our volumes by making in-roads in ECO countries. Such marketing efforts are needed to ensure the success of PDWCP and bring benefits to the people of Pakistan where job creation is so desperately needed.
Having spent so much energies and a planned injection of $1.6 billion, there are several more matters that we, as a nation, need to do to cement the foundations necessary to build a world class port facility. I have expounded these potential initiatives in my previous writings. Firstly, it is imperative that there be serious efforts to build the connecting roads and other infrastructure to cater for efficient cargo flow enabling the full utilisation of PDWCP. Failing such infrastructure, PDWCP will not realise its full potential. Secondly, we must afford the legal status and recognition a deep sea port deserves by enacting a Deep Sea Port Act. It would also confer recognition to the men and women who had toiled and sacrificed to make the deep sea port a success. Such a legal status should form the sound basis for other legislation to attract further investment in other economic sectors and to empower the appropriate authorities to expedite bold initiatives to bring our ports to world class competitiveness. Thirdly, there is need to amend the Customs Act such as to make Pakistani ports a viable option and place them in a fighting chance to get a piece of the trans-shipment cargo market vis-à-vis other ports the region.
The writer is Ex Additional Secretary and Director General, Ministry of Ports and Shipping. He had also been the Chairman of Gwadar Port. Currently, he is a member Board of Governors, World Maritime University Malmao (Sweden), while he is also a member of IMO Secretary General’s Panel of Experts, London
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