The federal budget 2008-09 has earmarked Rs1 billion for setting up of Gwadar’s Export Processing Zone (EPZ) and Rs750 million for construction of new Gwadar international airport.

In his budget speech, Balochistan Finance Minister Mir Asim Kurd also vowed to take all possible steps for developing the port city. He said: “work on 350-bedded hospital and sports complex on a 300- acre plot is in progress”. The provincial government has allocated Rs10.2 million for the Gwadar Development Authority (GDA).

The port has been built but it has not seen any significant related development on infrastructure and it is still without roads and rail links with the rest of the country. All mega infrastructure projects arel in planning stage. The port has remained non-functional for more than a year after its official opening in March 2007.

The first ship arrived at the port in March this year under special arrangements. Since then, no business has been transacted by the port authorities.

Gwadar Port Authority (GPA) has not yet announced the port tariff. The concession agreement, signed last February between Pakistan and the Port of Singapore Authority (PSA), entails ministerial authority over the operators to fix port fees to attract shipping lines.

Officials blame that while huge development funds have been invested, the economy has so far not reaped any benefits from such a gigantic project. Federal minister for Ports and Shipping Qamaruzzaman Kaira recently said that Gwadar port cannot be made operational before 2011 as it lacks required infrastructure, communication network and utilities.

The government plans to complete the business plan of Gwadar port in the new fiscal year. A project monitoring unit in the ministry of ports and shipping will undertake a study to identify the bottlenecks in efficient operation of ports and recommend phase-wise improvements required at all the Pakistani ports including Gwadar.

Pakistan has awarded the contract for new Gwadar International Airport to the China Harbour Engineering Company (CHEC). In February 2007, Islamabad had approved the construction of an international airport at Gwadar at a cost of $70 million for which 6,500 acres plot will be provided. The EPZ will be established on a 1,000-acre plot of land at Gwadar for providing better import and export facilities.

Gwadar port can handle mother ships and large oil tankers and serve the transit trade of the Central Asian Republic (CAR) as well as the trans-shipment trade of the region.

Bug the development of communication links -roads, railways, ports and terminals is an equally pressing need. In the next fiscal year, an amount of Rs36.5 billion has been allocated for the national highways programme with main thrust on the remaining work on Makran Coastal Road, Nutal-Sibi-Dhadar Section (N-65), Ratodero-Shahdadkot-Khuzdar Road, Qilla Saifuliah-Loralai-Bewata Section of (N-70), Gwadar Ratodero Road (Khuzdar-Khori, Ratodero-Quba Saeed Khan & Gwadar- Turbat) and Hoshab-Panjgur-Nag-Baseema-Surab (450 Km long section).

Under Phase-II, a new motorway corridor on the west of Indus touching Balochistan would be developed as a long-term measure. It is envisaged to develop industrial clusters, oil storage facilities and oil and gas pipelines along the proposed motorway and expressway corridors.

Gwadar port will be used as captive cargo or for trans-shipment purposes only. Initially, the port would handle 100,000 containers, 300,000 tons of general cargo and half a million ton of food grains, according to the officials of the GPA. The federal government has provided the additional funding to install the required equipment, complete the civil work and build roads linking the port with provincial capital Quetta.

The first shipment at Gwadar port has cost dearly to the Trading Corporation of Pakistan, which chartered a Panamax class vessel Post Glory for importing72,000 metric tons of wheat from Canada. The vessel arrived on March 10 but was not allowed to berth at the port and stopped at the outer anchorage.

A vessel from Pakistan National Shipping Corporation (PNSC), M V Hyderabad was engaged for lighterage and around 9,000 tons of wheat were unloaded before the Post Glory was allowed to berth at the Gwadar Port. The TCP was expecting a saving of $17 per metric ton by anchoring the ship at Gwadar instead of country’s other ports of Bin Qasim and Karachi as PSA.

The operator of Gwadar port had offered concessional rates, as compared to the country’s other ports, for unloading the imported wheat at Gwadar port. Lighterage of the weight of Post Glory into another vessel and the process of discharging wheat had created extra financial burden on the TCP as it had hired another vessel, technical staff, required machinery and labour, besides demurrage charges.

Critics accuse Gwadar Port Authority (GPA) of not maintaining draft of approach channel and of berths by doing regular dredging, as at the time of official opening of the port in March 2007 it had a 14-metre draft. Some local experts believe that the draft has reduced due to accumulation of silt, as during the year 2007, there had been cyclones and heavy monsoon rains which must have added silt.

The local officials had pointed out the risks involved in allowing berth to the huge vessel at new port of Gwadar, asking the government to berth the vessel at Karachi Port instead of Gwadar. They had informed about the arrival of the huge vessel with 72,000 DWT to unload wheat at new port of Gwadar may damage the jetty with a designed capacity of 50,000 dead weight tonnage (DWT).

Similarly, the port had only two tugs of 30 tons Bollard Pull, whereas the Panamax vessel needed at least two tugs of 60 tons for turning it within the 480-metre basin of the port. The experts apprehended that if the 30 tons tugs were used for this huge vessel, it might swing them and cause some mishap.

Balochistan’s development poses serious challenges to the new elected government. It’s main grievances include, denial of the provincial autonomy as guaranteed by the Constitution, inadequate royalty on gas and other minerals, sharing of resources under the NFC Award on the basis of population in total disregard to the economic backwardness of the province.