THE implementation of the second phase of Gwadar Port project began last month with the release of the first instalment of Rs16.3 billion. It will help undertake deepening of the port at a cost of $865 million. And China has promised to provide $50 million soft loan.

This mega project will take 8-10 years to complete. The first phase of the project was completed at a cost of $250 million in November last with the Chinese assistance in a span of nearly three-years.

Additional development costs were also envisaged for electrical supply 132 KV transmission line from Turbat to Gwadar at a cost of Rs360 million and a railway line Gwadar-Panjgoor-Dalbandin (515 km) that will cost Rs8,500 million.

In first phase, 15.5 meters channel draining draft were developed and three approach channels were also constructed. The first phase included the development of navigational aids, radar plus VTM system, service jetty, pilot boats, survey boats and a maintenance workshop. After completion of the first phase, the port is able to handle ‘bulk carriers’ of up to 30,000 DWT and container vessels of 25,000 DWT.

The ministry of ports and shipping conveyed its administrative approval to the chairman Gwadar Port Authority to initially start the second phase at a cost of Rs16.3 billion, which includes Rs11.8 billion foreign exchange component. The port authorities had been directed to install gantry cranes at the port and that the specification of the cranes and their installation could be negotiated with the port operators.

The phase-II would be executed by private sector to accommodate 50,000 DWT container ships, 100,000 DWT dry bulk carriers and up to 200,000 DWT oil tankers, three container terminals (2010m quay length), one bulk cargo terminal (305m length), one grain handling terminal (305m length), one twin pier oil terminal (688m length), breakwater (600m length), approach channel (16./20m deep), back up areas, craft and equipment and building etc.

With the beginning of the second phase, a long-term process has started to set up industrial zones in the port city along with the development of new roads for which the government had earmarked thousands of acres of land.

The government is reportedly offering concessions to foreign investors for the development of second phase of the port project. It has decided to allow China and South Korea to set up their tax-free special industrial development zones (SIDZs). Official sources say a number of countries including those of the region, had expressed willingness to establish duty-free industrial zones in Gwadar. These include China, Japan, Singapore.

Prime Minister Shaukat Aziz has already agreed to creation of new industrial parks at Gwadar and Karachi. The parks would be completed with public private-partnership. The financial allocation for creation of new parks was also discussed. An amount of Rs 150 million had been arranged while National Bank would provide Rs5 billion in loans for the project.

The government has reportedly agreed to lease out land to UAE at Gwadar for the establishment of shipping companies and other related trade activities.

The second phase of the port project is designed to facilitate transshipment for Central Asian states, Afghanistan, Iran, China, India and many other countries. Gwadar port would provide port, warehousing, trans- shipment and industrial facilities for trade with over 20 countries, including Gulf states, Central Asian republics (CAR), Iran, East Africa, Red Sea countries and North West parts of China and India.

The potential investment areas in Gwadar include fish processing, crabs processing, cold storage, ice factories, sea-water reverse osmosis desalination plants, shrimp farming, boat building and naval architecture institute, oil storage tankers, ferry service for Karachi Ormara-Pasni-Gwadar and up to Oman and Dubai.

Investments can also be made in fisheries and aquaculture, port management projects, hotels and restaurants and resorts, date processing, canned food, gravel crush plant, water sports and recreation facilities, palm oil cultivation, marine and automobile repair workshops, cluster for Internet service providers, renewable energy, wind, solar and IPPs, clearing and forwarding agency, hospital clinics, re-rolling mills and warehouses.

An Export Processing Zone (EPZ) has also been planned for assembling plants and other industries for marketing in the region of Gulf and Central Asian republics. Oil storage yard and refinery have also been proposed in the north of Gwadar town near the East bay for which an area of 1,000 hectares has been identified. Initially, a storage tank farm will also be constructed followed by a refinery in future. There exists a huge potential to build an oil refinery at the Gwadar port on the pattern of Singapore port for facilitating trans-shipment.

The second phase of the project would be built on BOO (build-operate-own) or BOT (build- operate-transfer) basis. The second phase is expected to be completed by 2010. In the second phase, 18 additional berths will be constructed and the container work would be further expanded to an area of 141 hectares.

The completion of phase-II will help meet strategic needs and standby facility to the Port Qasim and the Karachi Port in case of emergencies arising out of any mishaps. With the completion of the second phase the congestion at Port Qasim will reduce.

Gwadar port will generate foreign exchange earning, as the vessels registered under foreign flags are required to pay some portion of charges in foreign exchange through their local agents for cargoes.