Gwadar port city is moving towards becoming a hub of economic activities with the help of Chinese investment. Now, its momentum depends upon the successful political transition in Pakistan over the next few months. If that does not happen, there are chances of a derailment in the gained momentum thus far.
Insight
Gwadar port city is moving towards becoming a hub of economic activities with the help of Chinese investment. Now, its momentum depends upon the successful political transition in Pakistan over the next few months. If that does not happen, there are chances of a derailment in the gained momentum thus far.
For now, the Gwadar port can receive three ships to deliver goods at a time. The capacity will be increased to six ships over the next year and a half. The master plan of Gwadar layouts the next five to 10 years for the city on modern lines, however, this momentum can only be sustained if the local population of 216,000 feels a part of this development process.
The government has procured land from locals for undertaking projects under the China-Pakistan Economic Corridor (CPEC). Currently, a construction boom can be witnessed in parts of the city, which is a positive sign. To make it work, the government needs to overcome many of the pressing problems, including water shortages that are faced by the city.
Pakistan undertook several years to make practical efforts for ensuring development at Gwadar. First of all in 1992, then in 1998 Palling Commission’s Central Development Working Party (CDWP) approved its development; however, after the nuclear test, all funds were stalled.
Finally, the Executive Committee of National Economic Council (ECNEC) granted its nod before a military coup led by General Musharraf. During his rule, efforts were made to develop Gwadar, but those too did not work out as there was hardly any consensus over all the economic activities.
All this though changed as Pakistan and China signed the CPEC agreement. The current regime, led by the Pakistan Muslim League-Nawaz (PML-N), with the help of the Chinese was finally able to find a viable solution to develop Gwadar under the CPEC banner.
China has so far invested around $2 billion to build infrastructure at Gwadar, including $300 million for the first phase of the free economic zone and the remaining for other infrastructure developments. Just in a period of five months, China has constructed Gwadar Business Centre, a five-storey building, which will be provided with a one-window system to assist investors in resolving their problems in a stipulated timeframe.
The officers of the Federal Board of Revenue, State Bank of Pakistan, Security Exchange Commission of Pakistan, different banks and others will be sitting under one roof in this newly constructed Business Centre in the developing port city.
Gwadar Port Authority (GPA) Chairman Dostain Khan Jamaldini said, “The free economic zone expected to attract $3 to $4 billion in investment...$5 billion for building infrastructure to help the 216,000 population to move from lowest income to higher income brackets in the next few years.”
Currently, a 2,500 workforce was undertaking construction work at Gwadar, including 500 Chinese nationals. For free economic zone the authorities procured 60 acres of land which will be expanded to 2,200 acres of land. So far five industrial units have been granted permission to install their units.
With development of free zone, it is expected that around 300 to 400 industrial units will be installed at Gwadar. Under the long term plan, it is expected that around 7,500 to 10,000 Chinese could come to Gwadar over the next five to 10 years for working in different projects.
All this will only remain a dream if the right synergies are not developed for the sake of Pakistan. Despite facing challenges of insurgency in some parts of Balochistan, Pakistan and China are pinning quite high hopes on Gwadar as becoming the central point of economic activities in this region by connecting Asia with Central Asia and South Asia. With the help of this connectivity, Pakistan can maximise its benefits Federal Minister for Planning Ahsan Iqbal said.
Pakistan gave no special treatment to China on Gwadar port, the terms were the same as were given to the Singapore Port Authority, but they delivered nothing. Now with the same terms and conditions, this port was handed over to China Overseas Port Holding Company, he said.
“You can see that they have actualised the project development. Within short span of five to six months, the Gwadar Business Centre - a five storey building – was built, which is the largest facility in Balochistan,” the minister informed.
He said that Chinese companies were moving quickly for infrastructure development. The minister said that around $4 billion investment was made in entire Gwadar for energizing or completing different projects in the first phase, including the port, basic infrastructure and free zone.
He said initially China committed $800 million out of total $46 billion under the CPEC for development of Gwadar. For the second phase, investment of $3 to $4 billion has been mobilised cumulatively by the government of Pakistan, provincial government of Balochistan and the private sector of both China and Pakistan that will translate Gwadar into the gateway for CPEC.
Gwadar Port Authority Chairman Dostain Khan Jamaldini said China had so far invested $2 billion into Gwadar which can significantly improve the socio-economic condition of the local population of the port city. This included infrastructure, energy, transport and industrial cooperation, he added.
He said the local budget of Gwadar development had gone up from Rs36 million to Rs35 billion which was equivalent to Balochistan’s total development budget a few years back.
The current water requirement for Gwadar stands at six million gallons per day but two small dams are currently providing around 2.7 million gallons per day. The water requirement would be 12 million gallons per day, he said, and added that additional arrangements were made to get 10 million gallons of water.
In the first phase of displacement of 300 families for setting up of free zone, two plots each of 500 square yards and one constructed shop were given to compensate the displaced residents. The need is to stay consistent in policies and their implementation. The Chinese are moving very fast to develop Gwadar to establish links with their western region, as it will reduce the distance by 10,000 kilometres, benefitting them a lot.
But pace of other development projects, especially new initiatives like the Mainline-1 (ML-1) for railways might slow down if the upcoming political transition is not smooth. For now, the Chinese have adopted the “wait and see” policy, and it all depends now on Pakistan how uneventful the transition is in the next few months on the political front.
The writer is a staff member
