SHRUGGING off apprehensions, and shedding their biases, the country’s business community supports transfer of Gwadar Port to a Chinese company.
The business enthusiasm, however, is not being shared by Balochistan.
Last week in Islamabad all relevant partners gathered to formalise the agreement to shift the operating rights of Gwadar Port from Singapore Port Authority (PSA) International to China Overseas Port Holdings Limited. President Zardari presided over the ceremony.
China built the port, sharing about 75 per cent of its total cost. In 2007, former President Musharraf, however, handed over the 40-year operating lease to PSA International, which was unable to make the port work. According to available information, initially PSA did try, but lost interest in the project after the change in the government in 2008.
PSA International sources attributed their waning interest in the project — that was challenging from the word go — to problems the authority encountered in its attempt to purchase land in the area. “The hostilities were difficult to handle but it was the lack of government support that decided the fate of the project”, a source privy to affairs of PSA in Gwadar told Dawn.
“The formal PSA withdrawal has materialised now but the project never took off as the lack of connectivity to the rest of the country rendered it commercially unviable for operators. Except for some wheat and fertiliser shipment belonging to the government that had to be subsidised heavily to cover high transportation cost — Rs2200 per ton for fertiliser — no one showed any interest in using an isolated facility several hundred miles from any major market”, an expert commented.
The private sector, disillusioned with PSA for its failure to deliver, attaches great value to the involvement of ambitious China in the Gwadar Port.
“The government has corrected a cardinal mistake. China should have been a natural choice. No one can match its economic might and interest, with strategic dimensions, in the region. It has the ability and will to make Gwadar functional and commercially viable for trade and industry”, a business leader with stakes in shipping and commodity trade asserted.
All business leaders contacted across the spectrum supported the deal. Haji Fazal Khan Sheerani, chairman Federation of Pakistan Chamber of Commerce and Industry, said the potential gains from the port to trade and industry are so promising that they overshadow the possible pitfalls of discomfort of some nations for economic or political reasons.
“The development for Gwadar Port has geo-political dimensions that cannot be overlooked. If handled with care, involving the local population, it has potential to give a major boost to the economy by easing the logistic bottleneck. It can open up new vistas for trade and industry in the country”, he said commenting on the deal.
Kamran Mirza, CEO, Pakistan Business Council, believed that Gwadar Port can be developed into a transshipment hub in the region in the short-run. However, developing required infrastructure to connect the port with markets will require time and big injection of resources.“A longer journey starts with a small step. I do not think Gwadar Port could be commercially viable for the private sector immediately but it holds huge potential for trade and industry in the long run. We need to take a longer term view and complement the government for its initiative”, Mirza representing big business said.
“We have lost many years because of the ineffectiveness of PSA. I hope and wish that China makes it happen. With national trade corridor running through Afghanistan to Central Asian countries and untapped resource base in Pakistan sky will be the limit. A functional port would help the private sector drive the country to develop at much faster pace”, Majyd Aziz, a senior representative of the community, said over telephone.
However, high ranking officials, businessmen and opinion leaders in Balochistan, reached over telephone, expressed reservations over the fate of Gwadar Port. They lamented lack of involvement of the provincial government in the whole affair.
“I know as much as you do. The federal government did not feel the need to take us in confidence. The sense of deprivation and unfair treatment by the federal government is not misplaced” a senior official in the provincial government lamented.
“There are three ‘D’s associated with any mega project of this proportion: development, destruction, and displacement. We believe that Balochistan will be called to bear the burden of destruction and displacement and will again be deprived of its fair share in development”, another officer explained reservations over the port in Balochistan.
Dostain Khan Jamaldini, finance secretary of Balochistan, confirmed to Dawn from Quetta over the telephone that the provincial government was not taken on board in processing of the deal.
“I do not believe that the government followed the laid down rules and procedures necessary to ensure transparency and good business practices. The recent Supreme Court decision to annul a contract for a mineral project in Balochistan should have alerted the government”, a corporate lawyer commented.
“I find the haste of federal government indecent. I have no proof to support my apprehensions but it would have better had the government taken the province on board before deciding the fate of Gwadar Port” another officer told Dawn.
“We fought for our claim on port during the debates on the 18th Amendment. We were supported by Sindh but the other two provinces sided with the federal government and we had to give in”, a provincial secretary said.
“Sorry, but pragmatically speaking, Balochistan has little to offer in terms of trained manpower, expertise in the field or resources to develop the site. It does not surprise me if the government did not seek their input. I fail to understand the mindset there. They block change instead of supporting it”, a frustrated businessman said responding to points raised by Balochis. A port and shipping expert, who runs a private consultancy, was not inclined to take the deal too seriously. “They may wish whatever they want, their prayers would only be answered if they put in the effort where it is needed and do it the right way. I think they lack vision, understanding and commitment and reduce everything to an election gimmick”, he said.
“A country that paid no attention to develop inland waterways, destroyed railways cannot be trusted to be serious about addressing logistic bottlenecks in the country.
There are too many ifs for the Gwadar to deliver. I am sorry but I will be pleasantly surprised if China makes it work”, he said.
Chairman AKD Securities , who had 20 per cent share in Gwadar port, told reporters in Islamabad that the Chinese company has assured to invest $750 million immediately to improve infrastructure. He was confident that Gwadar Port will soon become a trade hub in the region.