A Belated But Good Start

By  V/Adm Asaf Humayun HI(M) (Retired)

(Director General NCMPR)

I can recall the pleasant afternoon in Gwadar in March 2007.  President Pervez Musharraf, Prime Minister, Governor of Balochistan, all Federal Ministers, Chief Minister Balochistan, the Provincial Cabinet and many other VIPS were present for the inauguration of Gwadar port.  Gwadar port received the first symbolic cargo on 20 March 2007.  The ship in port was PNSC vessel MV SIBI, which carried dummy cargo for the inaugural off-loading of a container.  Perhaps the empty container symbolised that Gwadar was not ready to fulfil its role, as the port for Afghanistan and Central Asian Region.  During the speeches, the President, on the urging of Minister for Ports and Shipping, made the distracting and pre-mature announcement of planning another port at Sonmiani on the Balochistan coast.  This announcement diverted attention of the investors towards Sonmiani, which is closer to Karachi.   Sonmiani port is yet to see light of the day but the announcement did put a break to the investment boom in Gwadar.

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 From 2008 to 2014 Gwadar port handled only 5.7 million tons of imported cargo.  The cargo was wheat and urea imported by the Government through Trading Corporation of Pakistan.  The cargo was, then, carried to Karachi through Coastal Highway.  Meanwhile the first port operator PSA (Port of Singapore Authority) could not exploit the promised potential of Gwadar.  The reasons were many; some on part of PSA and some on part of Pakistani authorities.  Ultimately, the Concession Agreement with PSA was terminated in 2012.  On 18 Feb 2013, a new Concession Agreement was signed with COPHC (China Overseas Port Holding Company).

conatiner gwadar

COPHC has been deliberate in consolidating its presence in Gwadar port.  The acquisition of land for tax-free zone has been making slow progress.  By 2015, most of the land for tax-free zone at Gwadar has been acquired.  The road link to Northern Pakistan through M‑8 Gwadar-Ratodero motorway and N-85 Gwadar-Surab Highway, though on high priority, have lingered for so many years.  One also reads about Gwadar-Turbat-Hoshab road making some headway.  Their completion is forecast during 2016.  In spite of the slow progress of essential infrastructure, the launching of China Pakistan Economic Corridor has provided a fantastic opportunity to Gwadar Port and COPHC.

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In this environment of slow progress, the news of the first export cargo leaving Gwadar port provides a sign of great hope.  In my meeting with Mr. Zheng Qingsong, CEO of COPHC in Pakistan in January 2015, he had hinted about the high priority he gave to export of cargo from Gwadar.  It was rumoured that the first ship will leave with cargo in the first week of April.  Nevertheless, the first ship arrived on 10 May and left on 11 May 2015.  It was not a container ship.  It was a break-bulk vessel MV ZI JING SONG of 27,000 DWT.  The volume of cargo at Gwadar is still quite small.  Using a container ship for a cargo of 6 containers only does not make economic sense.

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To witness the momentous occasion, Mr Kamran Michael Minister of Ports and Shipping was present himself.  The first cargo comprised 135 tons of frozen fish exported by Gaba Group of Companies. The fish had been caught by the fishermen of Gwadar.  The refrigerated containers are destined for Far East.  However, the cargo went westward to Jebel Ali to be loaded onto a regular service container ship for the Far East.  Another batch of export cargo will leave Gwadar on 18 May.  With regular export cargo service, the fishermen of Pasni, Gwadar and Jiwani area will have a direct link to rest of the World.  That will change the life of the local population.

The credit for this achievement goes to COPHC.  The exporter, of course, paid normal freight rates from Gwadar to Jebel Ali.  The vessel was not carrying any import cargo.  So COPHC had to bear the cost of diverting this vessel for Gwadar and offered other concessions.  The service can become a regular feature in the long run, only if the quantum of export and import cargo justifies the costs of vessels calling at Gwadar.

COPHC

One hundred thirty five tons of export cargo appears a laughable quantity; that too in such a manner that may not be sustainable for long.  However, it demonstrates the commitment of COPHC that they will not leave any stone unturned to make a success of their Gwadar port venture.  It also ushers in an open gateway of prosperity for the fishermen of Gwadar.  So let us not dismiss this as an insignificant event.  As the Chinese sage Lao Tzu said, “A journey of a thousand miles must begin with a single step.”

Is Gwadar Port a Game Changer for Dubai?

By Mehar-un-nisa

Research Assistant NCMPR

Gulf countries will be the biggest beneficiaries of the Pak China Economic Corridor (PCEC) linking Kashgar and Gwadar Port through Pakistan. The Chinese Govt. resolve to invest over 40 Billion Dollars in the development of the linkage and in the Gwadar port, will shorten the transit distance of Chinese products to gulf countries from 12000 km to 3000 km. As the trade develops through PCEC, the quantum of manufactured goods (from Gulf), oil and gas (from neighbouring Iran) etc will jump substantially.   The service sector in Pakistan will benefit a lot as the trade flows through PCEC.  The return on investments can accrue quickly if the trade takes the existing route Kashgar – Sost Dry Port in Pakistan – Gwadar Port.  The Pakistan’s connectivity with Kashgar through the Khunjrab pass is usable during the coming summer season.

Gwadar

A lot of activities and revenue will be generated due to call of ships at Gwadar Port, including port charges, the transshipment of containers, the handling of the containers on the terminal, carrying of containers by feeder vessels in the gulf, increase in support services to these ships, increase in demand for infrastructural development for terminals and quays etc. It is normal for ships to request and pay for additional services while in port, including stores, repairs, surveys, supplies of spare parts and transport services. The 3PL Service Providers based in the Gulf will find the Gwadar potential very lucrative and are starting to invest in establishing their offices in Gwadar.

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Greater economic growth in Pakistan is resulting in greater UAE investment in many sectors including export-oriented industry, IT and software. The economies of the Gulf states will be benefitting by the increase in the trade volume and huge savings in freight. The Free Trade Zone (FTZ) being developed by the China Over Seas Port Holding Company (COPHC) at Gwadar is the dream come true for Gwadar and Baluchistan people and a big opportunity for Gulf based industries to diversify their assets, seize the opportunity and invest in Gwadar FTZ.

Dubai’s biggest non-oil trade partner is China with around $50 Billion trade annually.  This can increase greatly if foreign direct investments are made by UAE based companies in Gwadar FTZ.

Gwadar

Gwadar

Gwadar is not competing with Dubai, but it is providing Dubai based companies to invest in Gwadar FTZ and market the products in the Gulf.  Within UAE there are several ports but they are not competing each other. They all are complementing to the flow of trade, each port has its own dynamics and they supplement each other in productivity and shipping.

map

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923 hectares of land of Free Zone has been allocated to China Overseas Port Holding Company. There is freedom of operation and freedom of remittances and tax exemptions.

Gwadar Free Trade Zone

Gwadar Free Trade Zone

Gwadar is providing investment opportunities in Balochistan and turning them into sustainable economic activities. Invest in Gwadar as it is not just a port, it is a global trade opportunity.

Gwadar

Gwadar

Gwadar and PCEC are important for both China and Pakistan

By Mehar-un-nisa

Research Assistant NCMPR

“Gwadar is strategically located in proximity of major shipping routes emanating from the Gulf. Gwadar and Pakistan China Economic Corridor (PCEC) are important for both China and Pakistan,” said the CEO of China Overseas Port Holding Company Mr. Zeng Qingsong.

Speaking at Maritime Discourse on the topic “The Future of Gwadar” at Bahria University on 20th March, 2015, he highlighted the significance of the Gwadar Port in the near future. He elaborated the economic and geographic importance of the Gwadar port by comparing statistics of other ports in Pakistan.

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The CEO of China Overseas Port Holding Company, Mr. Zeng Qingsong highlighting the economic importance of Gwadar.

Maritime Discourse is a series of lectures, organized by National Centre for Maritime Policy Research (NCMPR). NCMPR organizes maritime discourse twice a year to provide a valuable platform for discussing maritime issues being faced by Pakistan.

The core objective to conduct this discourse was to shed light on the significance of Gwadar Port and the role it can play to boost the economy of Pakistan in future. Gwadar port offers multi-dimensional advantages and will influence the geo-strategic and economic environment in the region.

Gwadar Port

Gwadar Port

The Discourse began with the presentation of Director NCMPR Capt. Tariq Masood who highlighted the hinterland connectivity of Gwadar Port.

Guests of Maritime Discourse listening to the presentation of Director NCMPR Capt. Tariq Masood

Guests of Maritime Discourse listening to the presentation of Director NCMPR Capt. Tariq Masood

He said “The hinterland connectivity of Gwadar needs to be seen in detail as the port efficiency largely depends on it Gwadar port has many options to serve the hinterland countries a s well as the neighbor Iran. The central Asian and Chinese individual bases can be connected through CAREC 1 to 6 corridors. Corridor 5 and 6 start from China and Kazakhstan respectively and both of them terminate at Turkham.”

Director NCMPR giving presentation on “hinterland connectivity of Gwadar Port

Director NCMPR giving presentation on “hinterland connectivity of Gwadar Port

Additionally, Pakistan China Economic Corridor terminates at Gwadar. Iranian North South Corridors from Chabahar Bandar-e Abbas and Bushehr  can be connected via the coastal road from Gwadar to Gabd, Such geographic significance of Gwadar in the region can open new door for economic growth and progress” he added.

Hinterland connectivity of Gwadar

Hinterland connectivity of Gwadar

Director General NCMPR, Vice Admiral Asaf Humayun HI(M) (Retired) in his closing remarks said, “Gwadar is inching towards its development at a slow pace whereas the whole nation desired to see the progress and prosperity at a much faster pace.”

Director General giving his closing remarks

Director General giving his closing remarks

“Two things will actually determine that how fast Gwadar can progress, one is security and the other is connectivity”

He stressed on the need to have due regard to the preservation of environment, which should be a part of all development work in Gwadar  area.

Various intellectuals, senior officers of Pakistan Navy, renowned stakeholders of maritime sector, marine scientists, students of maritime studies and many other dignitaries attended this productive session.

“Activities similar to Maritime Discourse are essential to be conducted on continual basis, in order to create mass awareness regarding maritime sector, which we really need to highlight for the development of Pakistan,“ said Tabassum Naz, a guest.