ISLAMABAD, Aug 15: The Singapore Port Authority (SPA) which is to run the Gwadar Port has overcome its teething problems and the port is likely to be made fully operational from next month with three berths handling the arriving ships.

However, according to authorities, the port requires more berths to handle big ships.

Director-General of the Gwadar Development Authority (GDA) Ahmad Bakhash Lehri told Dawn that businessmen need more warehouses and other equipment to enhance the country’s foreign trade. He said that due to destruction of the coastal highway and floods, it had become difficult to make the port fully operational. “But this job is expected to be done by next month,” he said, adding that ships had started to arrive at the Gwadar port.

An Iranian ship carrying relief goods for flood victims in Balochistan had reached the port recently, he said. He expressed the hope that the SPA would be in a position to run Gwadar port by next month. Sources said the Singapore-based operators were told to expedite their work, especially after having received a 40-year tax holiday, despite concerns expressed by other investors and the World Bank and the Asian Development Bank (ADB).

“The government is already extending tax exemptions and tax holidays at various industrial zones and duty-free economic zones and that is why such a facility had been offered to Singapore port which is investing $550 million there,” a senior government official said. He said that export processing zones were also enjoying certain tax holidays and exemptions and there was nothing exceptional in the case of the SPA.

Gwadar port located at Balochistan is being considered as a future trading hub in the region due to its proximity with the Gulf region.

Initially, the port is expected to face competition from Port Salalah of Iran. But after completion of the Phase-II by 2010 at a cost of $840 million, it is likely to become one of the busiest ports in the region, providing warehousing, trans-shipment and industrial facilities for trade with over 20 countries, including Gulf countries, Iran, Central Asian States, India, China and East Africa. Phase-I of Gwadar port has cost $298 million.

The government also planned some other concessions at the proposed Export Processing Zone (EPZ) near Gwadar port for local and foreign investors. There will be tax exemption on customs, sales tax and excise duty in the EPZ with a view to promote substantial investment in Gwadar.

A number of foreign investors have shown interest to establish mega refineries, building storage capacity and undertaking other businesses in Gwadar to help expedite the process of industrialisation in Balochistan. With the completion of both phases of the Gwadar port, a Special Industrial Development Zone (SIDZ) with an area of 4,000 hectares will also be set up for various industries.

The SIDZ is located on the north of Gwadar town at a distance of about 30kms from the port. The federal government is also providing special Rs700 million funding to Balochistan to help meet 15 years water demand of the Gwadar Industrial Estate (GIE) through installation of a foreign assembled desalination plant.

The future demand of water supply will be met partly by recycling of waste water (irrigation and industrial cooling) and partly by addition to the desalination plant. At present, there is no water resource available in the area.

The Balochistan government has provided 3,000 acres through two separate allotment letters, out of which 20 acres will be made available free of cost through the GIE to set up water desalination plant, intake work, storage tanks and other facilities.

The total cost of water supply from the plant (including depreciation) will be Rs0.25 per gallon against the cost of water supplied by tankers at Rs0.76 per gallon.

There will be approximately 2,000 industrial units in the GIE providing employment to 30,000 workers. Most of the production will be export-oriented and will bring foreign exchange to the country.