Gwadar is located on the southwestern coast of Pakistan, close to the important Straits of Hormuz, through which more than 13 million bbd of oil passes. It is strategically located between three increasingly important regions of the world: the oil-rich Middle East, heavily populated South Asia and the economically emerging and resource-rich Central Asia. The construction of the Gwadar deep-sea port is just one component of a larger development plan which includes building a network of roads connecting Gwadar with the rest of Pakistan, such as the 650 km Coastal Highway to Karachi and the Gwadar-Turbat road (188 km). This network of roads connects with China through the Indus Highway. Pakistan, China, Kazakhistan, Kyrgizstan and Uzbekistan are developing extensive road and rail links from Central Asia and the Chinese province of Xinjiang to the Arabian Sea coast. The Pakistani Government has initiated several projects, with majority financial and technical assistance from China, to develop Gwadar’sstrategic location as a goods transit and trade point. The primary project is the construction of a deep-sea port at Gwadar to enable high-volume cargo movement to and from the landlocked Central Asian states. The new port will also encompass conversion facilities to allow for the movement of natural gas as a part of plans for a termination point for the Turkmenistan-Afghanistan-Pakistan natural gas pipeline. The secondary project is a coastal highway connecting Gwadar to Karachi, whose $200 million cost will be completely financed by the Chinese. Gwadar will serve as a port of entry for oil and gas to be transported by land to the western regions of China. The significance of Gwadar is great to both Pakistan and China. Pakistan will be able to have astrategic depth southwest from its naval base in Karachi that has long been vulnerable to blockade by the Indian Navy. China is going to be the beneficiary of Gwadar’s most accessible international trade routes to the Central Asian republics and Xinjiang. By extending its East-West Railway from the Chinese border city of Kashi to Peshawar in Pakistan’s northwest, Beijing can receive cargo to and from Gwadar along the shortest route, from Karachi to Peshawar. The rail network could also be used to supply oil from the Persian Gulf to Xinjiang. Pakistan’s internal rail network can also provide China with rail access to Iran. Rail access will however be hampered somewhat by differences in gauge: China and Iran – 1435mm; Pakistan – 1676mm; Central Asia – 1524mm.
Economic forecasts
The government declared Gwadar port a “Special Economic Zone” in the budget, 2003-2004. All banks will open their branches, five star hotels will be built, offshore banking will be started, factories, warehouses and storage will be set up, the tourism industry will be promoted in the area, an export processing zone will be set up, making Pakistan a very attractive place for direct foreign investment, and Gwadar port a regional hub of trade and investment activities.
Prospective Port for Regional Countries Trade Prospect with CARs.
The total population of this region is around 65 million, which is distributed amongst 6 states, out of which Uzbekistan, Tajikistan and Turkmenistan, have close geographical proximity with us and as such will be the potential users of Gwadar port. The present total foreign trade of the area is estimated to be 20 billion US$ with 12 billion US $ of exports. The total international trade in terms of weight and volume is approximately 80 million freight tons. The main items and commodities of trade brought in from various ports are all kinds of consumer goods, electronic items and garments. Exports, which are our main focus of attention, include cotton, metal ores, machinery, gas and oil. The road distance from Kushka in Turkmenistan to Gwadar is only 1200 kms whereas, the nearest Black Sea port of Odessa in Ukraine is approximately three thousand and four hundred kms away from Central Asian States (map at annex D). Thus Gwadar automatically becomes the most viable option available with the CARs. A 500-km long highway connecting Gwadar with CARS via Panjgur, Chaghi and Rabat, up to Herat is therefore being rightly planned.
Trade Prospect with China.
China is an economic giant of the region. The trade prospects with China are envisaged to evolve along with the construction of the port. Being a coastal region, the eastern part of China is far more developed than her Western region. But ever since China has triggered the western development strategy in the late 1990s, the western region has drawn the attention due to its cheaper labour force, rich natural resources and potential huge market. Incidentally the southern tip of the huge Xinjiang autonomous region is four thousand five hundred km from Chinese ports located on the eastern coast but only about 2500 km from ports of Pakistan. It is expected that China’s use of Gwadar port for exports originating from western region will provide her preferred option over the ports located along her eastern coast, for which a distance of 10,000 km has to be covered. Thus it may be logically visualized that Gwadar port will be an integral part of the China’s Foreign Trade route in future. The existing Karakoram highway already connects western China with Pakistan. With further expansion and upgrading of this traffic artery and proposed linkages with Gwadar via planned Ratodero – Khuzdar road, Western China shall have easier access to Gwadar.
Trade Prospects with Afghanistan.
Afghanistan after having been placed on a path of development is in desperate need of finding new avenues for boosting its economy. The country is full of natural resources amongst them are huge deposits of copper, high-grade iron ore, chromite, sulpher, zinc, precious stones, oil and gas. Besides this, the country possesses reserves of oil, gas, coal and precious stones. Once the conditions in Afghanistan become conducive to full exploitation of this productive potential, it will trigger a formidable momentum of trade activity, which would need operationally feasible and economically viable sea trade routes. Another important fact is US approval of over 1.4 billion US $ for the economic recovery of Trans Afghan gas pipeline. This project will carry 30 billion cubic meters of gas per annum from Turkmenistan’s gas fields to Gwadar, and will be the first and foremost step towards the perceived economic benefits. With almost 30 billion US $ already invested by US oil companies in Central Asian region, the suggested Afghan route would cost only one-half the amount of the other alternative, which would run through Georgia to Turkey’s Mediterranean coast. This 1500 Km pipeline project can yield significant revenues as Pakistan has plans to build a liquid-gas plant at the Gwadar Port for export purposes. Therefore, the importance of Gwadar Port in providing sea access to Afghanistan cannot be over stressed.
Incentives for the Development of the Country
The development of Gwadar port will also play an active role in changing the economic destiny of our country. This province has abundant mineral resources, which could not be exploited earlier mainly due to poor communication infrastructure. The development of roads due to increased economic activity in the province will bring about the much-needed development. Fishery is an avenue, which is providing employment to 300,000 fishermen. This is in addition to 400,000 attached to its ancillary industries. Karachi fish harbour handles 90% fish and sea food catch and earned 120 million US $ in export in the recent years. It is anticipated that with the construction of Gwadar port there would be a marked improvement in fish and seafood catch along with the enhanced offshore exploitation of EEZ.
Feasibility of Gwadar as a Free Port
The government of Pakistan has already planned to make Gwadar as a free port. The necessary study of the feasibility of Dubai based Jabal Ali free port has already been carried out and the same will be implemented at Gwadar Port.
Tourism Attractions
The government has already declared tourism as an industry and is taking practical steps in this regard. Incentives have also been given to tourists visiting Pakistan like availability of chartered flights, helicopter services, 30 days visa at the airport etc. In Gwadar, PTDC has four acres of land earmarked at a prime location in Gwadar over which a 12 room motel was approved for construction. The project however, could not be implemented due to lack of funds. PTDC has welcomed investors to undertake the project and enhance its scope to a beach resort having multifarious activities. The government of Pakistan is also giving various incentives to investors in this region. With the completion of the port the tourists flow is likely to increase many folds in Gwadar.
Economic forecasts
The government declared Gwadar port a “Special Economic Zone” in the budget, 2003-2004. All banks will open their branches, five star hotels will be built, offshore banking will be started, factories, warehouses and storage will be set up, the tourism industry will be promoted in the area, an export processing zone will be set up, making Pakistan a very attractive place for direct foreign investment, and Gwadar port a regional hub of trade and investment activities.
Prospective Port for Regional Countries Trade Prospect with CARs.
The total population of this region is around 65 million, which is distributed amongst 6 states, out of which Uzbekistan, Tajikistan and Turkmenistan, have close geographical proximity with us and as such will be the potential users of Gwadar port. The present total foreign trade of the area is estimated to be 20 billion US$ with 12 billion US $ of exports. The total international trade in terms of weight and volume is approximately 80 million freight tons. The main items and commodities of trade brought in from various ports are all kinds of consumer goods, electronic items and garments. Exports, which are our main focus of attention, include cotton, metal ores, machinery, gas and oil. The road distance from Kushka in Turkmenistan to Gwadar is only 1200 kms whereas, the nearest Black Sea port of Odessa in Ukraine is approximately three thousand and four hundred kms away from Central Asian States (map at annex D). Thus Gwadar automatically becomes the most viable option available with the CARs. A 500-km long highway connecting Gwadar with CARS via Panjgur, Chaghi and Rabat, up to Herat is therefore being rightly planned.
Trade Prospect with China.
China is an economic giant of the region. The trade prospects with China are envisaged to evolve along with the construction of the port. Being a coastal region, the eastern part of China is far more developed than her Western region. But ever since China has triggered the western development strategy in the late 1990s, the western region has drawn the attention due to its cheaper labour force, rich natural resources and potential huge market. Incidentally the southern tip of the huge Xinjiang autonomous region is four thousand five hundred km from Chinese ports located on the eastern coast but only about 2500 km from ports of Pakistan. It is expected that China’s use of Gwadar port for exports originating from western region will provide her preferred option over the ports located along her eastern coast, for which a distance of 10,000 km has to be covered. Thus it may be logically visualized that Gwadar port will be an integral part of the China’s Foreign Trade route in future. The existing Karakoram highway already connects western China with Pakistan. With further expansion and upgrading of this traffic artery and proposed linkages with Gwadar via planned Ratodero – Khuzdar road, Western China shall have easier access to Gwadar.
Trade Prospects with Afghanistan.
Afghanistan after having been placed on a path of development is in desperate need of finding new avenues for boosting its economy. The country is full of natural resources amongst them are huge deposits of copper, high-grade iron ore, chromite, sulpher, zinc, precious stones, oil and gas. Besides this, the country possesses reserves of oil, gas, coal and precious stones. Once the conditions in Afghanistan become conducive to full exploitation of this productive potential, it will trigger a formidable momentum of trade activity, which would need operationally feasible and economically viable sea trade routes. Another important fact is US approval of over 1.4 billion US $ for the economic recovery of Trans Afghan gas pipeline. This project will carry 30 billion cubic meters of gas per annum from Turkmenistan’s gas fields to Gwadar, and will be the first and foremost step towards the perceived economic benefits. With almost 30 billion US $ already invested by US oil companies in Central Asian region, the suggested Afghan route would cost only one-half the amount of the other alternative, which would run through Georgia to Turkey’s Mediterranean coast. This 1500 Km pipeline project can yield significant revenues as Pakistan has plans to build a liquid-gas plant at the Gwadar Port for export purposes. Therefore, the importance of Gwadar Port in providing sea access to Afghanistan cannot be over stressed.
Incentives for the Development of the Country
The development of Gwadar port will also play an active role in changing the economic destiny of our country. This province has abundant mineral resources, which could not be exploited earlier mainly due to poor communication infrastructure. The development of roads due to increased economic activity in the province will bring about the much-needed development. Fishery is an avenue, which is providing employment to 300,000 fishermen. This is in addition to 400,000 attached to its ancillary industries. Karachi fish harbour handles 90% fish and sea food catch and earned 120 million US $ in export in the recent years. It is anticipated that with the construction of Gwadar port there would be a marked improvement in fish and seafood catch along with the enhanced offshore exploitation of EEZ.Feasibility of Gwadar as a Free Port
The government of Pakistan has already planned to make Gwadar as a free port. The necessary study of the feasibility of Dubai based Jabal Ali free port has already been carried out and the same will be implemented at Gwadar Port.
Tourism Attractions
The government has already declared tourism as an industry and is taking practical steps in this regard. Incentives have also been given to tourists visiting Pakistan like availability of chartered flights, helicopter services, 30 days visa at the airport etc. In Gwadar, PTDC has four acres of land earmarked at a prime location in Gwadar over which a 12 room motel was approved for construction. The project however, could not be implemented due to lack of funds. PTDC has welcomed investors to undertake the project and enhance its scope to a beach resort having multifarious activities. The government of Pakistan is also giving various incentives to investors in this region. With the completion of the port the tourists flow is likely to increase many folds in Gwadar.
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