KARACHI: Serious bottlenecks exist in the completion of Gwadar Port as a full-fledged commercial facility and the government needs to take up such issues on priority basis.

Experts expressed these views at a discussion held here on Friday at the National Centre for Maritime Policy Research (NCMPR) of Bahria University.

They said road connectivity and security were major problems facing the project and unless these were solved the high expectations attached to the port would remain only a dream.

Know more: Gwadar Port has potential to turn Pakistan into ‘maritime power’

They said the 924 hectares of land required for the development of a free-trade zone at the port had yet to be handed over to the Chinese company tasked with managing and operating the port. And work on the electricity, gas and water connections for the project had yet to begin.

The event began with a presentation by NCMPR Director retired Captain Tariq Masood who spoke about the geostrategic position of Gwadar, the vision behind developing the port, its current capability, gaps in the road connectivity of the coastal city to the rest of the country, road linkages existing between China and Pakistan and efforts being made to build and improve Pakistan’s road linkages with other regional countries.

The province of Xinjiang that connected China to Pakistan, he said, had a population of 22 million but was twice the size of Pakistan. It shares borders with Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan and India.

The region had a lot of commercial and industrial opportunities if one had access to it through proper road and rail links, he added.

“The trade between Pakistan and China is via land route through the Khunjerab Pass. The road service between Kashgar and Gilgit (via Sost) began in 2006. However, the border is closed for all kinds of traffic except for government delegation and mail service from December to April as part of an agreement signed in 1985. In winters, the roads are blocked by snow,” he said, adding that trade traffic issues between the countries needed to be sorted out.

The huge marine traffic already existing in the region presented an opportunity for providing different services to vessels at Gwadar port, he said.

Showing slides of a presentation, Qingsong Zeng of the China Overseas Ports Holding Company (a wholly owned subsidiary of COPHCL Hong Kong) said his organisation had been granted a 40-year concession to manage and operate Gwadar terminals.

The company, he said, was being supported by Gwadar International Terminals Limited, Gwadar Marine Services Limited and Gwadar Free Zone Limited.

The business scope under the concession included general cargo handling and storage, container handling, provision of marine services, supply of ship bunkers and supply of freshwater to ships.

“Gwadar is a national gateway to Pakistan. Driven by a team of experts delivering flexible innovative solutions, exceptional customised services and dedicated safe operations, it could be a catalyst for economic development and grow from local port operator to one with a regional and then global presence,” he said.

The operation of the port, he said, was handed over to the company through an assignment and transfer agreement in 2013 from the Port of Singapore Authority. The accord covered areas such as multi-purpose terminals (Phase-I and its expansion), container terminals, marine services and the free trade zone.

“The entire project ($288 million) has been handed over to the company with all the port’s mobile and immobile, afloat and ashore assets, superstructures, infrastructures and systems. There is exemption on import duties and sales tax on all imports for materials, equipment for construction, expansion and operations of port for 40 years,” he said.

There was exemption from corporate income tax for 20 years and stamp duties on loans acquired, sales tax, all provincial and local taxes, charges and levies for 20 years, he explained.

It was pointed out that the Chinese government planned to build an international airport in Gwadar and coal-fired power generation plant, among other facilities.

During the question-answer session, some participants expressed dissatisfaction over the project details presented at the event and said that key information on project targets and development strategy was not shared with the audience.

Questions were raised also about the data on Port Qasim Authority and the Karachi port.

Concern was also expressed that the company assigned the job of managing and operating the project had not been tasked by the government to take care of environmental concerns and to involve local communities in the project.

Retired Lieutenant Commander Adil Rasheed, in his capacity as adviser to the China Overseas Ports Holding Company, clarified that the environmental impact assessment (EIA) of the project had been approved by the Balochistan government and more EIAs would be required only if there was a change in the master plan.

Published in Dawn, March 21st, 2015

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