Gwadar Port is expected to become fully operational by the end of this month with all three berths handling the arriving ships. However, more berths would be needed to handle big ships.

Islamabad has asked the Port of Singapore Authority (PSA) International, which is investing $550 million in Gwadar port, to expedite their work, especially after having received a 40-year tax holiday.

Since the Singaporean company took over the Gwadar port, it has overcome the operational problems it faced earlier, also caused by flooding of the coastal area. An Iranian ship carrying relief goods for flood victims in Balochistan reached the port recently.

The first phase of the port was completed at a cost of $298 million with Chinese assistance. After completion of second phase by 2010 at a cost of $840 million, Gwadar 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.

Islamabad has extended tax exemptions and tax holidays for the industrial zones and duty-free economic zones to be set up in the area. A Special Industrial Development Zone (SIDZ) will be set up for which an area of 4,000 hectares has been ear-marked. The SIDZ will be located in the north of Gwadar town at a distance of about 30kms from the port. The federal government is providing Rs700 million to the provincial government to help meet 15 years of water demand of the Gwadar Industrial Estate (GIE) through installation of a foreign assembled desalination plant. Approximately 2,000 export-oriented industrial units have been planned in the GIE.

The Asian Development Bank has agreed to provide $1 billion for the National Trade Corridor (NTC) project that would link Karachi to Gwadar and Khunjrab in Northern Areas, close to the Pakistan-China border. The provincial government has directed the concerned officials to hand over industrial plots to allottees as per prescribed rules.

The future demand of water supply will be met partly by recycling of waste water and partly by addition of the desalination plant. An area 20 acres will be made available free of cost through the GIE to set up water desalination plant, storage tanks and other facilities. The total cost of water supply from the plant is estimated at Rs0.25 per gallon against the cost of water supplied by tankers at Rs0.76 per gallon.

Iran will provide electricity to meet the demands of its future commercial and industrial estates. Wapda recently signed an agreement with Iranian company Tavanir under which Pakistan will buy 100-megawatt power from Iran from January 2009. The Iranian company will invest $26 million and the Pakistan would provide $60 million for the project costing total $86 million.

While 100-km transmission line will be laid by Pakistan, Iran will lay 70 kilometre transmission line. The two grid stations of 220 KV will be installed, one in Gwadar and another in Iran’s Polan area. The tariff for one year has been fixed at 6.25 cent per unit and the price will be reviewed after one year.

The future demand for electricity may increase, according to an estimate, from 14MW in 2010 to 74 MW in 2030 and 370 MW in 2050. The government has requested Tehran to supply 2700 MW more electricity to meet the future power requirement of the port city. Iran is already supplying 35 MW electricity to the coastal belt..

Islamabad also plans to review the special incentives for the investors interested in setting up industrial units at EPZ at Gawadar. There will be tax exemption on customs, sales tax and excise duty in the EPZ with a view to promote substantial investment. Prime Minister Shaukat Aziz has directed the ministry of industries and production to develop a package of incentives for EPZ to promote industrial development.

Foreign investors have shown interest in establishing mega refineries, building storage capacity and undertaking other businesses. The federal government is likely to announce a 15-year tax holiday. The federal cabinet has approved Gawadar Port Authority’s (GPA) revised bill for the new corporate structure of the port.

Islamabad also plans to develop a modern facility for repair and maintenance of bigger local and foreign ships and vessels in collaboration with some leading international shipyards. Daewoo Shipyard of the South Korea has shown interest to work with a subsidiary of the Karachi Shipyard and Engineering Works (KSEW).

Pakistan intends to take advantage of strategic location of Gwadar and fast pace of growth of maritime activity in the region. The capacity in the Gulf for repair of vessels is limited and Gwadar can turn out to be an ideal place for such a facility. The facility can be upgraded to undertake state-of-the-art shipbuilding of bigger size and high-tech ships.

The country’s only yard— the KSEW works with the limitation of depth of water in the present channel. Its docking facilities have not been enhanced since 1970 which has created constraints in docking of vessels and affecting its productivity. The Karachi Port Trust (KPT) is planning deep draught container terminal and cargo village for which KSEW needs space to accept bigger ships for repair and maintenance. The new ship lift and transfer system will enable the KSEW to meet the additional work-load and schedule of the customers and quality of product.

A Rs2.8 billion project, both for Karachi and Gwadar, is aimed at enhancing the capacity of ship repairs by replacing the old and obsolete machines and by upgrading the KSEW’s repair facilities. A 4,000-ton ship lift system is proposed to be installed for the purpose.