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GWADAR PORT

GWADAR BACKGROUND:

Gwadar district, with its 600 kilometres long coast line and un-irrigated tracts of Kulanch and
Dasht valleys, has always been an important chapter of Makran’s history. The known history of
Makran goes back to the time of prophet Dawood when people entombed themselves to avoid
famine. The area is said to be possessed by Iranian King Kaus followed by Afrasiab of Turan and
then by Kai Khusrau, again an Iranian. Then there is a long list of rulers, including Lehrasp,
Gushtasp, Bahman, Huma and Darab, to the year 325 BC when Alexander the Great incidentally
found the sea in this area on his way from India to Macedonia. Greek historian Arrian has
mentioned the coast line as the country of Ichthyophagoi. At that time Nearchos, the admiral of
Alexander, sailed along the coast and mentioned places named Kalmat, Gwadar, Pishukan and
Chahbar. Afterwards, the area was ruled by Seleukos Nikator, one of Alexander’s generals, who
lost it to Chandragupta in 303 BC. Then the tract of history is lost in darkness for centuries. An
account of this area is found in the beginning of the sixteenth century when the Portuguese found
their way to India and captured several places along the Makran coast. In 1581 they burnt “the
rich and beautiful city of Pasni” and Gwadar. Although many invaders conquered the land,
mostly the local rulers, including Hots, Rinds, Maliks, Buledais and Gichkis, exercised authority
in the area as the conquerors had no intentions to stay there.

Two regimes of local rulers, of Buledais and Gichkis, are worth mentioning here. The Buledais
gained power with the rise of the Zikri sect. These rulers are said to be connected with the rulers
of Maskat and were called Buledais with reference to the valley of Buleda where they resided.
The Buledais ruled the area for more than a century up to the year 1740. In the last years of their
regime they embraced Islam. The Zikri folk joined hands with the Gichkis who also were Zikris
by faith. The family feuds and internal dissension between Gichkis resulted in nine successful
expeditions (either partially or fully) by Mir Nasir Khan I. It is said, that the main motive behind
all these expeditions, made by Mir Nasir Khan I, was to eliminate the Zikris as he belonged to the
(anti-Zikri) Muslim faith. These expeditions resulted in a division of revenues between the Khan
and Gichkis.

In the last quarter of the eighteenth century, Gwadar and the surrounding country fell into the
hands of Maskat. Saiad Said succeeded to the masnad of Muscat in 1783 and had a dispute with
his brother Saiad Sultan. The latter appears to have fled to Makran and entered into
communication with Nasir Khan who granted him the Kalat share of the revenues of Gwadar.
Saiad Sultan lived at Gwadar for some time and eventually succeeded in usurping the Sultanate of
Maskat in 1797. He died in 1804 and during his sons reign, the Buledai chief of Sarbaz, Mir
Dosten, is said to have acquired temporary possession of Gwadar, but a force sent from Maskat
regained it. Although it is generally understood that the right of sovereignty in Gwadar was
transferred by the Khans of Kalat to Maskat in perpetuity, the Khans and natives of Gwadar have
always denounced this perception. The un-irrigated tracts of Kulanch and Dasht valleys have
always been connected with Kech.

The first Afghan war (1838-39) directed attention of the British to the area. Major Goldsmith
visited the area in 1861 and an Assistant Political Agent was appointed in Gwadar in 1863. Both
Pasni and Gwadar have been ports of call for the steamers of the British India Steam Navigation
Company. The first ever telegraphic link to this area was made in 1863 when Gwadar was linked
to Karachi. Telegraph offices were opened at Gwadar and Pasni. Later post offices were opened
at Gwadar in 1894 and at Pasni in 1903. Ormara was linked telegraphically in 1904.[1]

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After the division of the Indian subcontinent into two sovereign states, areas except Gwadar and
its surroundings, joined the Balochistan States Union, as part of Makran state. In early 1949 along
with Kalat, Lasbela and Kharan. In October 1955, Makran was given the status of a district of
former West Pakistan province after its accession to Pakistan. In 1958, Gwadar and its
surrounding area was reverted back from Maskat to Pakistan and was made a tehsil of Makran
district. On 1st July 1970, when one unit was dissolved and Balochistan gained the status of a
province, Makran became one of its 8 districts. On 1st July 1977, Makran was declared a division
and was divided into three districts, named Panjgur, Turbat (renamed Kech) and Gwadar. Gwadar
was notified as a district on July 1, 1977 with its headquarters at Gwadar town.

A stone-built domed shrine of some saint at Gwadar is said to be centuries old. It may be the
same one indicated in the Gazetteer of Balochistan. A square fort along with a tower is present
amidst the Memon Muhallah of Gwadar. It is near the old bungalow of the Assistant Political
Agent to the Governor General (therefore renowned as governor’s house). Moreover, the fort of
Saiad Sultan is still in good condition and is being used as a police station.

HISTORICAL PERSPECTIVE:

Located at the entrance of the Persian Gulf and about 460 kms from Karachi, Gwadar has had
immense Geostrategic significance on many accounts. The continued unstable regional
environment in the Persian Gulf in particular as a result of the Iran/Iraq war, the Gulf war and the
emergence of the new Central Asian States has added to this importance. Considering the Geo-
economic imperative of the regional changes, the ADB’s Ports Master Plan studies considered an
alternate to the Persian Gulf Ports to capture the transit trade of the Central Asian Republic
(CAR) as well as the trans-shipment trade of the region. Both Karachi and PQA were considered
for such development but were found unattractive to major shipping lines due to the remoteness
from the main shipping routes, the limitations of draft for mother ships and large bulk oil carriers
and the comparative long turn around times. The ADB studies, however considered Gwadar to
have the most advantageous location for such an alternative port in the region, which could
handle mother ships and large oil tankers in due course.

Keeping that aspect in view as well as the inherent strategic and economic benefits that Gwadar
Port offered, the transport plan of the 8th Five Year Plan (1993-94) of Pakistan included the
development of Gwadar Port as an essential element of its aims and objectives. Technical and
financial feasibilities therefore were under taken resulting in decisions for the development of
Gwadar Port by the Govt. of Pakistan.

The Project started on 22 March 2002, is on fast track and will Inshaullah complete in schedule
time i.e March 2005. In fact it would surprise many that with initiative and calculated risk, we
have received merchant ships since Jan 2003 and have been able to off load hundreds of tones of
cargo imported for the Project, thus saving precious time and money which otherwise is required
for transportation of the same cargo by road from Karachi/PQA to Gwadar.

BENEFITS:

 1: Besides the Geostrategic importance mentioned earlier, some of the evident economic
benefits of the development of Gwadar Port are:

2:Capitalize on opportunities for trade with landlocked Central Asian States and
Afghanistan.

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3: Promote trade and transport with Gulf States.

4: Trans-shipment essentially of containerized cargo.

5: Unlock the development potential of hinterland.

6: Diversion of influx of human resources from up country to Gwadar instead of Karachi.

7: Socio economic uplift of the province of Balochistan.

8: Establishment of shipping related industries.

9: Oil storage, refinery and petrochemicals

10: Export Processing and Industrial Zones

11: Reduce congestion & dependency on existing Ports Complex at Karachi/PQA.

12: Serve as an alternate port to handle Pakistani trade in case of blockade of existing ports.

13: Will become a Regional Hub for major trade and commercial activities.

SCOPE OF WORK:

The development of Gwadar Deep Sea Port as per approved PC-I and Master Plan is to be
undertaken in two phases. Phase-I will comprise of:-

3 Multipurpose Berths

Length of Berths 602m

4.5 Km long Approach Channel Dredged to 11.5m-12.5m.

Turning Basin 450m dia.

One 100m Service Berth.

Related port infrastructure and port handling equipment & Pilot Boat, Tugs, Survey Vessel etc.

The port will be equipped with the essential port handling equipment and other infrastructure
required for smooth operations of a modern port. On completion of Phase-I, the Port will handle
Bulk Carriers of upto 30,000 DWT and Container Vessels of 25,000 DWT. Phase-I will be
completed at a cost of Rs.14.9 Billion (US$. 248/- Million) and will complete in 36 months i.e.
March 3005.

Phase – II

This Phase of the Project is planned to be built on BOO/BOT basis at an estimated cost US$. 600
Million. It will comprise of 9 additional berths as per following details:-

http://www.gwadarnews.com/gwadarphotos/Gawader.jpg

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4 Container Berths.

1 Bulk Cargo Terminal (to handle 100,000 DWT ships).

1 Grain Terminal.

1 Ro-Ro Terminal.

2 Oil Terminals to handle 200,000 DWT ships.

Phase II of the project involves construction of more berths on BOT basis including two container
berths, one bulk cargo terminal, one grain terminal with capacity handling vessels up to 100,000
DWT, one roll on/ roll off terminal, two oil piers for vessels up to 200,000 DWT and future
expansion of two container berths. On completion of the project, Gwadar Deep-sea port would be
on of the world's most strategically located port in this part of the world.

On successful completion of Phase-I, it is anticipated that the private sector would come forward
to invest in the second phase of the Project. It is envisaged that the complete development of such
a Mega project will take 8-10 years depending on the active participation of the private sector.

Cost of The Project

Total amount equivalent to Rs 14.9 Billion (248 million US dollars) were approved by ECNEC
for Phase-I of the project. The financial agreement for development of Phase-I was signed with
the Govt. of China on 10 August 2001 under which the Chinese will provide US$. 198 Million
and the Govt. of Pakistan will provide US$. 50 Million.

Chinese:

Grant US$ 18 Million.

New Grant Assistance US$ 31 Million.

New Interest Free Loan US$ 31 Million

Govt. Concessional Loan US$ 58 Million

Buyer’s Credit US$ 60 Million

Total US $ 198.00 Million

Pakistani:

Rs. 3000 Million (US 50.00 Million) in Local Currency.

Additional Development Cost:

Additional development costs were also envisaged for Electrical Supply 132 KV Transmission
Line from Turbat to Gwadar at an approx cost Rs.360.00 million and a Railway line from
Gwadar-Panjgoor-Dalbandin (515 Km) at approx cost of Rs.8, 500 million. This is however not a
part of the sanction to the Gwadar Port Development Authority.

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Human Resource:

The Chinese have mobilized 450 personal from China and hired 512 local workmen as per
following detail:-

Chinese: 450

Pakistani: 512

Civil Works and Infrastructure Development:

The design and construction of residential buildings and civil works of various port operation
buildings and related infrastructure development is to be undertaken by Pakistani contractors and
firms out of the US dollars 50 Million allocated for the Project. In this regard consultants have
been hired and process for pre-qualification of contractors has commenced. Similarly, award of
contract for the construction of residential area was approved by the MOC in June 2003 and the
Contractor has already fully mobilized and a construction activity has started.

Master Plan of GWADAR:

Concurrent with the Port development a Master Plan of Gwadar has been approved by
Balochistan Government through NESPAK and which has been a hot topic of discussions at
various forums. Implementation of the Master Plan is the responsibility of Govt. of Balochistan.
Physically no headway has been made so far which is a matter of concern.

The following potentials have been identified in the Master Plan of Gwadar Deep Sea-port
Project:

Increased trade to and from Balochistan and Iran.

Trade potential from Central Asian countries through Afghanistan.

Transit cargo (liquid and dry bulk)

Warehousing and assembly industries (EPZ)

Oil storage, refineries, petrochemical industries etc.

Handle the shipping traffic of the region.

Gwadar Master Plan envisages development of about 18,600 hectares of land for this project
including the followings:

Port development in Phase 1 & 11 on 400 hectares.

An Export Processing Zone of 74 hectares located on land adjacent to the port in East Bay.

A Special Industrial Zone of about 4,000 hectares lying to the north of the town.

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An oil refinery of 1,000 hectares located to the north east of the town, linked to the proposed oil
terminal by an
underground pipeline across East Bay.

A residential area of 400 hectares stretching north of the existing town along West Bay.

To bring Gwadar close to the national mainstream, 700 Km long Makran Coastal Highway is in
advanced stage of implementation. It will link Gwadar with Pasni, Ormara and Karachi. An other
regional linkage is the Gwadar Ratto-Dero motorway linking it with Indus Highway through
Turbat, Awaran and Khuzdar. A rail link is also planned to connect Gwadar to Quetta and
Zahidan. Civil Aviation Authority also plans to upgrade the existing length of runway from 5,000
ft to 15,000 ft for operation of wide bodied jet air-crafts. The extension work will begin by end
August, 2003 and the extension facilities will be available for use by end 2004.

Investment Opportunities:

Some of the evident investment opportunities:-

Master Plan related infrastructure i.e. internal roads & services, water and power and
communication services for the new township and the Industrial Zone.

Private owned Ware Houses and Cold Storages.

Private cargo handling equipment and trucking yards.

Corporate Infrastructure i.e. offices for operating firms & agencies.

Development of Industrial Zone and Industries.

Development of Commercial/residential areas & buildings.

Labour related amenities for thousands of workers employed on developmental work of Great
Gwadar.

Hotels & Motels.

Hospitals, Colleges & Schools.

Tourism related industry.

Marine related industry i.e. shipyards, dry dock and repair yards.

Marine Fuel bunkering for visiting ships to include large fuel storages and mobile barges etc.

Oil refinery and large oil storages.

Ferry services between Gwadar-Karachi/Oman/Bunder Abbas and UAE.

Industrial Export Processing Zone

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Hinterland road; Gwadar – Rattodero Expressway (735 km) will pass through Turbat-Awaran-
Khuzdar & Shahdad Kot.

Gwadar-Quetta (via Turbat-Panjgoor-Kharan-Nushki) requires to be widened and improved. This

link road will reduce the distance to Quetta from 1090 km to 795 km.

Railway; Gwadar – Panjgoor-Dalbadin (515 km).

Gwadar-Afghanistan via Quetta by National Highway- N-25.

Potential Projects at GWADAR Port:

Gwadar being unexplored territory till to date as far as business is concerned; a lot of business
activities are possible. There are numerous businesses that offer sizeable profits for the investors
in Gwadar. Few are mentioned as under:

1: Fish Processing 13 Shrimp farming, Shrimp /Lobsters

2:Grabs processing 14 Training services in Fisheries and Aquaculture
3: Cold storages, Ice factories 15 Port Management projects.
4: Seawater Reverse Osmosis Desalination Plants for profitable purpose 16 Hotels Restaurants &
Resorts
5: Business Development 17 Date Processing
6: Service Providers 18 Canned food, Gravel Crush plant
7: Oil Palm cultivation (Govt. of Balochistan can provide land on easy terms) 19 Water sports
center and recreation facilities.
8: Marine & Automobile repair workshop 20 Cluster for Internet service providers
9: Renewable Energy; wing, solar- IPP 21 Warehouses
10:Clearing & Forwarding agency 22 Boat building & naval architecture institute
11: Hospitals & Clinics 23 Oil Storage tankers.
12: Re-rolling Mills 24 Ferry Service for Karachi* Ormara-Pasni- Gwadar and up to Oman and
Duba

STRATEGIC IMPORTANCE OF GAWADAR

It’s amazing that tomorrow’s small fishing village ‘Gwadar’ is fast emerging as a Deep Sea Port
today. This is important to note that the Government of Pakistan, keeping in view its utmost
significance in the area, has declared ‘Gwadar’ as a Duty Free Port and a Free Economic Zone.
This has not only enhanced its commercial worth manifold but has also accelerated the pace of
development to an incredible extent.
In fact, Gwadar enjoys the status of a third Deep Sea Port of Pakistan which has a special
significance with reference to trade links with Central Asian Countries, Persian Gulf, East Africa,
United Arab Emirates and North Western India.

Gwadar by virtue of its finest location, development projects, recreation programmes and
Government’s special attention, will soon turn into a city which will be comparable with cities
like Singapore, Hong Kong and Dubai.

In view of the promising future of Gwadar, people from Pakistan and abroad who believe in safe
and sound investment, are taking keen interest in Gwadar.

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Historical Info:

Located at the entrance of the Persian Gulf and about 460 kms from Karachi, Gwadar has had
immense Geostrategic significance on many accounts. The continued unstable regional
environment in the Persian Gulf in particular as a result of the Iran/Iraq war, the Gulf war and the
emergence of the new Central Asian States has added to this importance. Considering the Geo-
economic imperative of the regional changes, the ADB’s Ports Master Plan studies considered an
alternate to the Persian Gulf Ports to capture the transit trade of the Central Asian Republic
(CAR) as well as the trans-shipment trade of the region. Both Karachi and PQA were considered
for such development but were found unattractive to major shipping lines due to the remoteness
from the main shipping routes, the limitations of draft for mother ships and large bulk oil carriers
and the comparative long turn around times. The ADB studies, however considered Gwadar to
have the most advantageous location for such an alternative port in the region, which could
handle mother ships and large oil tankers in due course. Keeping that aspect in view as well as the
inherent strategic and economic benefits that Gwadar Port offered, the transport plan of the 8th
Five Year Plan (1993-94) of Pakistan included the development of Gwadar Port as an essential
element of its aims and objectives. Technical and financial feasibilities therefore were under
taken resulting in decisions for the development of Gwadar Port by the Govt. of Pakistan. The
Project started on 22 March 2002, is on fast track and will Inshaullah complete in schedule time
i.e March 2005. In fact it would surprise many that with initiative and calculated risk, we have
received merchant ships since Jan 2003 and have been able to off load hundreds of tones of cargo
imported for the Project, thus saving precious time and money which otherwise is required for
transportation of the same cargo by road from Karachi/PQA to Gwadar.

Gawadar At A Glance:

Gawadar is the District Headquarter of Makran Division in Balochistan, the largest province of
Islamic Republic of Pakistan. It is situated on the coastal line of Makran. Along the coastal line
,there are four Tehsils including Gawadar, Jiwani, Kulanch and Ormara. Jiwani is the only one on
the western part of Gawadar, joining Iranian border on Pakistani side. Kulanch and Ormara, on its
eastern side are connecting District Lasbela and to Karachi finally. The distance between
Gawadar and Karachi in this way, is around 715 km.

Geo-Political Importance Of Gawadar:

Dubai is the hub of business not only for Gulf but also for rest of the world including Europe,
United States, Africa, China and Central Asian States, simultaneously. The gulf region is facing
many political conflicts at the moment and huge disturbances in the current administrative
structure are expected in the coming years. In such a scenario, a substitute of Dubai is essential to
be located before the crisis hits the finances of millions. The substitute shall be a nearest point
probably, to ensure continuous supply line of oil from Gulf to the outer world. Fortunately,
Gawadar proves to be the nearest and infact more cost-effective substitute of Dubai, from many
aspects.

China is emerging as a super economic power of the world in the recent years. Despite occupying
a huge area of world's land, it doesn't have any port of hot waters, which can be used the whole
year. The distance of Chinese industrial approach to the Shinghai port is approximately 16000 km
and the sea travel of 2-3 months is additional. This costs them a lot in the form of taxes and duties
as well. As compared to this, Gawadar port is only on a distance of 2500 km from China and the
port is working for the whole year because of the hot waters here. Therefore, the interest of China

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in the development of Gawadar port is infact in the interest of Chinese economy.

The central Asian states, after the independence from USSR, are trying to develop their
economies. These states are land locked and Karachi was expected to provide them the services
through Afghanistan. For the purpose, a highway from Peshawar to Karachi was constructed but
due to Afghan crisis, this line couldn't be established. The Afghan situation is till not clear, so,
Gawadar being near to Iranian border will provide port facilities to Central Asia as well.

Geo-Economic Importance Of Gawadar:

With a population of 160000, the Gawadar Town on Makran Coast is now set to become a hub of
shipping, commercial and industrial activities. Pakistan and China had signed a comprehensive
agreement on March 16, 2002 at Beijing undertaking the task of construction of Gawadar deep
seaport of universal standards. The work on the first phase of this mega project, which is being
constructed by Chinese Harbor Engineering Company, is now at full swing. The project is bound
to be a vital landmark in the economic development of the region. The port comes as a much-
needed national requirement in the wake of the rise in cargo traffic at Keamari and Bin Qasim,
which are operating at full capacity. It is expected that Pakistan's maritime traffic would rise by
three folds by 2010. With the construction of a third port, it is estimated that Pakistan will not
only be able to meet its own requirements of the future but also offer its port facilities to the
neighboring countries.

Gawadar is now destined to be the most important upcoming coastal town located on the inter
junction of the three most strategically and economically important regions of the world that are
oil rich Middle East, South Asia where one- fifth of world population lives and the Central Asian
Republics endowed with mineral wealth and an educated and highly skilled and disciplined
workforce.

STRATEGIC IMPORTANCE OF GAWADAR