After years of languishing, Gwadar port is finally set to be handed over to a credible operator who has signalled a willingness to also invest in the associated infrastructure to bring the facility into operation. This is a good development and deserves to be received with optimism.
Thus far the port is handling less than 3pc of the cargo that Karachi does between its two harbours.
The main reason for this has been its relative isolation from the country’s transport infrastructure such as roads and railways as well as its inability to serve as a home for a large number of skilled workers, which are required to operate a port.
The city of Gwadar lacks the water resources, as well as housing and other services such as educational and health facilities to provide for a large workforce.
It is connected to the rest of the country via a single road that leads to Karachi, which makes shipping goods there more expensive than Karachi since the cost of overland transport is far greater. Without these investments, as well as warehousing and other storage infrastructure, the port would be destined to languish.
But all that is about to change, we are told. In February, the port was handed over to the China Overseas Port Holding company as part of a larger transition towards making it operational. Issues surrounding the acquisition of land from the navy and coastguard were also resolved, and over 2,000 acres are set to be transferred to the port authorities for building an industrial park. Additionally, the Chinese have agreed to build the road infrastructure connecting the harbour with Sukkur and an international airport, along with a Gwadar Economic Free Zone, although details of these commitments are not yet known. The agreements required to initiate this work are reportedly going to be signed during the visit of China’s President Xi Jinping soon.
There is little doubt that the move to make Gwadar port fully operational will have a transformative impact on Pakistan. Still, there are good reasons to keep the optimism controlled, and to be mindful of the challenges ahead. For one, much of the engagement with China is being seen in Pakistan through an emotional lens, as friendly assistance by a brotherly neighbour. In fact, much of this assistance is coming on commercial terms, and the Chinese have been known to walk away from large projects in Pakistan when they believe that the authorities here have failed to live up to their end of the bargain. There is much that needs to be done by Pakistan to make the Chinese opportunity a reality, and there are question marks hanging over the government’s ability to do so. Instead of undue optimism, it would be better if more energy were invested in doing the homework that is necessary to successfully see this project through.
Published in Dawn, April 14th, 2015