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Gwadar seaport.

In the early second hail of 1992, the first major development along the over 550 kilometre long coast of Balochistan, aiming at the exploration of its coastline, i.e. Gwadar fish harbour and miniport, was substantially completed. The total cost so far incurred, including foreign exchange component, as per official figures, stands at Rs. 1681 million. Situated some 300 miles westward from Karachi in the close vicinity of strategically vital Strait of Hormuz, in the eastern bay of Gwadar, the port is spread over a land area of 70 acres. Gwadar fish harbour and miniport facilities include a 416 metre long and 65 metre wide jetty capable of berthing three vessels of up to 1000 DWT (dead weight tonnes) at a time, an approach channel of 1670 metre length, 60 metre width and 3.5 metre depth, connecting harbour complex with the open sea; an auction shed of 3000 square metre, a storage shed of 960 square metre, jetty and mooring facilities for 500 fish boats and gillnetters daily, mobile cranes and handling gear, a power plant (3x750 KVA), with provision for ice plant (4 units of 50 tonnes capacity each daily) and 2 cold storage units of 500 tonnes capacity each. The port is already in trial operation and its formal operation is awaiting completion of institutional framework and issuance of formal notification by the Government of Pakistan.

The straight result of this development in the context of socio-economic uplift of Gwadar region is that this area for the first time in its history has been provided reliable modern and economical transport connection via sea with the two ports of Pakistan and the neighbouring countries. The port provides conduit for mobility of goods and people. Mobility, from the very outset of human history, has been at the root of economic growth and development.

In the contemporary world where national economies are essentially exchange economies, mobility ensures the linkage between production and consumption. Different modes of transport, i.e. shipping, airline. rail-road, pipeline etc. are the expression of the function of mobility to ensure time and cost-effective, distribution of production. No wonder that progressive and developed economies are characterised by equally efficient production and transportation systems.

The biggest curse of this region has been the rough and difficult terrain acting as formidable impediment between Gwadar region and other parts of the country. As such Gwadar port should be seen as a massive economic opening for the region in relation to the domestic economy as well as to the economies of the countries in the neighbourhood. This will facilitate to transport, what Gwadar region has to offer on the markets nationally and internationally; and to get goods and commodities from other ports in Pakistan and other countries via cost-effective, modern and reliable sea transportation.

As so far identified, the economic mainstay and developmental potential of coastal belt of Balochistan is mari-culture-based, i.e. fish catching in the Arabian Sea and economic activities connected therewith. The viability of a mariculture-based economy depends on how modern and efficient the equipment and technique being used happen to be. In the absence of a seaport, the inaccessibility of the region h as thwarted the development of a modern fishing industry and facilities, techniques and skills for preservation and marketing in use the world over. Gwadar fish harbour and mini-port offers a comprehensive package of measures ensuring high return to the fishers of the region on their efforts. The port has set as its objectives to increase the fish production 35% of the total national fish catch increasing from 24009 tonnes in 1989-90 to 58403 tonnes in the year 1996; to provide requisite infrastructure for establishment by the private sector of fish-based trade and industrial activities to change the socio-economic countenance of the area; creation of job opportunities to employ 5000 to 8000 people by 1995. The Government of Pakistan, in line with its current economic policy of deregulation, privatisation and liberalisation of markets is actively interested to use port facilities to attract private sector's participation for investment in the development of the region on "Build, Operate, Own" (BOO) basis. The port is envisaged to set in motion a process of economic development with it social spillovers to improve and enrich the living conditions of the population of the coastal areas at an accelerated pace.

When seen in comparison to the leading ports of the world, or even the two operational ports of the country, i.e. Karachi Port and Port Qasim, Gwadar fish harbour and miniport is not a thrilling event in terms of the dimensions and magnitude of its facilities and the level of performance expected. However seen against the background of the backwardness along the entire Makran coast and the socio-economic intertial and immobilization to which the region has been kept hostage so far, this development is going to be of pivotal significance in changing the socioeconomic matrix of the area. A seaport marks the modern industrial environment constituting interface with the rest of the world, with potential and power to generate the contours of a modern industrial society. As such Gwadar Port is a unique and all embracing factor in socio-economic change. It is not the present performance potential but the strategic long-range impact of Gwadar Port as pole of economic growth and regional development that should deserve focus of efforts and attention at the national level while integrating it into the scheme of national resources and strategies. A decision by the federal government is clear evidence of this realization.

The government's decision of March 27, 1991 direction the development of a deep sea port at Gwadar with capacities to handle 50,000 dwt. capacity vessels to be completed by 1995, reflects a realistic and pragmatic appreciation of the national, regional and global factors perceived to determine the course of events in politico-economic area. The economic survival of Pakistan lies in an aggressive export-based economic growth, providing full exposure for our productive machinery to the international forces, trends and requisites to gain a firm foothold in the global market place. This in turn would require liberal trade regime with rising imports volume to feed the expanding economic apparatus. Seaports as an interface between land and sea transport system can play a distinctly vital role by ensuring high degree of operational efficiency and economy of costs emerging in port both on ship and cargo account. The present economic policy of 'deregulation, privatisation and liberalisation" provides right institutional framework to realise these objectives. Since the port sector - including development and operation of planned deep sea Gwadar port - stands open to the private sector, it is presumed that professionalism, efficiency and integrity will be the sole determinant in managing and operating Pakistan's port sector in future.

With the disintegration of Soviet Union and emergence of independent states in central Asia, cessation of war operations in Afghanistan, entry of Iran in the peaceful phase after war with Iraq with prime concern for economic reconstruction and modernisation, the regional economic perspective appears to have undergone immutable transformation as far as Pakistan is concerned. as possible conduit to facilitate trade flows of these countries.

Relying purely on economic rationale and business logic of this potential through provision of rail, road and port facilities as per their requirements in line with globally accepted and desirable standards and norms, Pakistan can have immense economic gains that would in equal measure be available to the beneficiary countries. It is thus, in the mutual interest that we come up to the requirements of these countries for smooth. speedy and cost-effective passage of their international trade flows through Pakistan, to be dictated by market forces alone. Gwadar deep sea port can play fin outstanding role in this scheme. The commercial and economic viability of this scheme stands beyond any doubt.

As the dialectics of the dynamics of global economic development of the recent decades demonstrably bears out, a continuous reshuffling of economic and industrial cards is taking place worldwide. The old advanced economies are not spewing out the same range of products in our countries as decades back. Within the national boundaries they have moved far up the ladder of value-addition in manufacturing, with service sector grabbing increasingly bigger chunk of national employment spectrum. Being flush with capital and technological advances, they are concentrating at home on high-tech and highly capital intensive segments of manufacturing; with very high rate of return; land-and labour-intensive segments of production that are too expensive for implementation at home ar being shifted to developing economies where land and labour happen to cheap enough to act as strong incentives for foreign investments. Transplants are becoming a favoured pattern of international investments to be nearer to the market and to avoid the negative impact of trade policies of the host country. No wonder the multinationals in home countries are retreating up-market, in the higher reaches of manufacturing where professional. industrial and luxury products command far fatter profit margins.

The prime consideration impacting foreign investments is to seek in host countries the optimal combination of production factors, i.e. combining technology and capital with cheap land and labour of developing economies, to have highest possible competitive edge for the investors in the global market place. While the economic viability of a production system can be ensured by keeping the cost of production to the minimum, it is through time and cost-effective and efficient transportation to the markets abroad that an economy can stand on its own and assert itself in the export market. The efficiency of production and transportation system reinforces each other.

Development of Gwadar deep sea port is required to incorporate the afore-cited factors while determining the size, functional scope, dimensions, location and layout of port facilities. The decision by the government that future deep sea Gwadar port will handle 50,000 plus tonnes carrying vessels serves as the fundamental parameter of development. It is only too obvious that a port providing depths in the navigable channel for vessels of this class, must have an annual throughout of exceeding 20 million tonnes to ensure financial self-sustenance.

The experience and expertise gained at Port Qasim during one decade of its operation can be very instructive in its regard. Keeping in view the national, regional and global economic landscape as at present and the strategic trends defining and determining it in the decades ahead, Gwadar deep sea port must be trifunctional port. It must handle not only cargo and ships as Karachi Port (Uni-functional) and provide locational sites with direct access to waterfront on its land for export targetted industrial and commercial enterprises saving massively on time and cost of inland transportation to have a competitive edge in the markets abroad, like Port Qasim (bi-functional) but also be able to perform trans-shipment function on a grand scale, becoming a trans-shipment hub for regional trade like Hong Kong and Singapore. Gwadar Port would require not only berthing facilities to handle high-volume commodities carried by bulkers and tankers but also high-paying containers carried by modern gearless cellular container vessels.

To carryout the conventional port function the future deep sea Gwadar port must be a multi-purpose port capable of handling high-volume dry and liquid cargo, fourth-generation containers vessels, roll-on/roll-off (wheeled cargo, i.e. cars, trucks etc.) and piece goods cargo. It must have vast areas of land to function as an industrial port, like Port Qasim that owns 12000 acres of land above high-water mark, for location of imports-based but targeted for experts manufacturing and commercial enterprises with direct access to waterfront to save substantially on the cost of inland transportation. Given the strategic location of Gwadar to international sea lanes and the countries of the region, the industrial function can best be performed within the parameters of Free Port Zone, i.e. declaring the free port areas outside national customs boundaries, where the goods moving from custom territory of Pakistan into Gwadar Free Port will be deemed as exports and goods moving from the Free Port into customs area of Pakistan as imports subject to normal customs laws, rules and conditions. If implemented strictly in line with theory and practice of the scheme as in other successful industrial ports of the world, it can result in economic activities and employment opportunities on a very massive scale, converting Gwadar into a veritable commercial and industrial centre of Pakistan, drawing talent, skills, resources and expertise from all over the country, cementing the very desirable process of national integration and changing the socio-economic profile of Gwadar region beyond recognition. The new dimension to be added to the planning and development of Gwadar -so far not incorporated as designing and planning parameter in case of the presently two functional ports of the country - should be the trans-shipment function. For this purpose the allocation of area, the layout and location of planned facilities must reflect trans-shipment function of the port catering to the requirements of the countries of the region. Again it is the geographical location, i.e. in relation to Gulf States, central Asian republics, Iran, Afghanistan etc. that gives Gwadar edge as trans-shipment port. This would require concessional port tariffs, incentives and more favourable terms and conditions that operative in trans-shipment ports of the region.

The operational efficiency of a seaport greatly depends on the efficiency of the inland transport systems. It is only logical that top priority is assigned to planning, designing and development of rail-road links capable of moving tens of millions of cargo tonnes to and from Gwadar for trans-shipment annually. It is in this context that Ratto Dero/Gwadar section of Motorway assumes very high priority. Further full range of benefits and incentives must be provided by the government to ensure maximum participation and involvement of the private sector from home and abroad for development and operation of different facets of Gwadar deep sea port as this represents a viable option for this development.
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Author:Siddiqui, Jamil A.
Publication:Economic Review
Date:Apr 1, 1993
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