Categorized | News & Updates

The limping Gwadar port

Posted on 10 August 2009

The arrival and anchorage of first commercial cargo ship Al-Fahdah carrying 650 tons of dates at the Gwadar deep-sea port on July 22 indicated that the port can handle big cargo vessels. Presently, three berths are functional but significant issues in making the port fully operational have yet to be addressed.

‘There are two key issues in port operations: one is land connectivity and other is land acquisition’, said Khurram Abbas, director PSA Gwadar, while talking to this scribe on phone. He said, ‘the land under possession of Pakistan Navy and coast guards has not yet been handed over to the Singapore Port Authority (PSA) for development of free zone and other port-related infrastructure.’

‘Without port connectivity through rail and road links, goods cannot be transported to Afghanistan, the Central Asian States and other regional countries’, he added.

Abbas said, ‘we need land for the development of a free zone for the port related facilities at East Bay of Gwadar. Without land acquisition, the PSA is unable to develop offices, residential facilities, port back up area in the proposed free zone and provide the traders, industrialists, businessmen, shipping companies, stevedoring firms, transporters with all possible facilities for doing business at Gwadar’.

The ball is in government’s court to make the port fully functional. Under the concession agreement signed with PSA in February 2007, the government was committed to hand over 923 hectares of land to the Singaporean firm by June 2008 on lease for the development of a free zone. The Gwadar Port Authority (GPA) is bound to acquire 350 hectares for ‘free zone area’ in addition to 584 acres in the possession of Pakistan Navy and 70 acres with the coast guards. .

Though 700 km long Makran Coastal Highway links Gwadar with Pasni, Ormara and Karachi, other regional linkages such as Gwadar-Ratodero motorway are yet to be completed. The motorway would link Gwadar with Indus Highway through districts of Turbat, Awaran and Khuzdar. Similarly, no progress has been made on the proposed rail link from Gwadar to Quetta and Zahidan.

Mekran coastal highway is the only link which is being used by a large number of trucks to transport urea and wheat from Gwadar to Karachi. In view of the port operations, which have boosted the trucking activity, the Gwadar Development Authority (GDA) needs to build a truck stand in the port area.

In the absence of truck stand, vehicles are parked on roads and traffic congestion has emerged as a problem in the port area. The long-term solution would come after completion of East Bay Expressway project, which will ensure a smooth flow of vehicles and link the port to the National Highway network.

In this year’s budget, the federal government has earmarked a mere Rs30 million for East Bay Expressway project that would cost Rs3.77 billion, according to one estimate. Gwadar-Ratodero Road project, which will connect Gwadar port with the upcountry, is also facing financial crunch for its timely completion.

Ports and Shipping Minister Babar Khan Ghauri recently told the Senate that the Navy’s occupation of the land was adversely affecting the functioning of the port and could force its closure.

The federal government plans to establish a tax-free zone in the new port city of Gwadar for which transfer of 584-acre land to the Singaporean operator is a prerequisite.

Analysts fear that the Singaporean firm may ultimately go to the Arbitration Court in London, holding the government of Pakistan accountable for defaulting on its contractual obligations. The ministry of defence has refused a free-of-cost transfer of the said land to the GPA for the proposed free zone.

Pakistan Navy had acquired 584 acres of land with seafront from Balochistan government in 1980. On refusal of the Navy to hand over the land, the previous government decided that Pakistan Navy would hand over only 30 acres to GPA for developing the road-rail-link leading to the free zone at Gwadar port.

The defence ministry has been of the view that GPA has long enough waterfront available for mercantile needs and development of free zone. It believes that 584 acres of land with Pakistan Navy is essentially required for defence of maritime interests and for the protection of the port itself.

Another issue in making the port functional has been the delay in fixing the port tariff announced after the arrival of first vessel at Gwadar port in March 2008, a year after the ceremonial opening of the port in March 2008. Ship agents and cargo consultants have been waiting for the announcement of port tariff to start doing the business. ‘We have already fixed tariffs and port charges, which are available on our website,’ says Abbas.

Only a competitive tariff could attract shipping lines to discharge cargoes at Gwadar instead of cruising to Dubai and Karachi and leaving for the next port for loading.

Critics say that the project has been the victim of lethargy and an unprofessional approach. They argue that the port was not ready to start cargo handling at the time of its inauguration in March 2007, as the handling equipment including gantry cranes, post-panamic rubber-tyre cranes and fork lifters were not installed. The installation of the handling equipment took almost eight months. The operationalisation of the port was also delayed to December 2008.

The port began cargo handling from March 15, 2008 and was declared officially functional last December. Ships carrying urea and wheat have so far berthed at the port which can a handle cargo ships up to 0.25 million tons.

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