Delay in Completion of Gwadar Port Costing Pakistan Strategically
By: Bassam Javed
1/31/2013

 

The Singapore Port Authority’s subsidiary ‘Concession Holding Company’ was contracted in February 2007 to manage operations and develop the Port of Gwadar on 40 years’ lease. The parent company, the Singapore Port Authority (PSA) was supposed to channel US $550 million over a five year period to develop the Port. However, the company failed to deliver thus far in either investing the promised amount or market the Port facilities to international shipping companies. Today, the Port infrastructure is either becoming redundant or rusty with frequent technical faults for non utilization to its full potential. The bone of contention seemingly is provision of land around the Port facilities where the company intends building a warehouse for trans-shipments and creating other logistics support infrastructure. The land that the company eyes is a 584 acres of Naval land which it wants to be handed over free of cost although only thirty acres of this chunk of land suffices the requirement for constructing an express way through it. Pakistan Navy has already agreed to spare the requisite land for the purpose.

The Minister in-charge, who is long associated with the Ministry in various political set-ups has cited the extra land problem for the stalemate in further development of the Port, blaming the Federal Government for its inability for provision of the said land for free. The inability of the Ports and Shipping Ministry to see through the development as per the agreement, has led the Singapore Port Authority to Dilley dally the Port development subjecting the country to an enormous strategic and revenue loss that it could have collected from the Port of Gwadar for the last so many years if it were operating at its full potential. If press reports were to be believed, the Port is intentionally being subjected to criminal neglect for if it takes off, the significance of Karachi Port will reduce thereby affecting its economic status. The reports also say that the same disenchanted group is buying out the near by port land for personal benefits rather than affording the same for Port development. The project which had an added benefit of improving the lives of Baluch people when completed, keeps the people of Baluchistan devoid of economic benefits. The young educated Baluch are striving to look for jobs elsewhere in other provinces. Had the Port been completed in its stipulated time they may not have had to move out from their Province. Does the criminal neglect of the port development deserve a sue Moto notice by the judiciary, is fast becoming an emerging possibility.

As far as the Port of Singapore is concerned it virtually has kept the Port in a total disarray for over six years. Now, the Port of Singapore Authority has indicated to withdraw from the contract for what it calls government’s failure to honor the agreement clauses that it had signed as a wholesome document. The Government and the PSA locked themselves in meeting their respective obligations fatally affecting the development of the Port. Under the agreement, the government was supposed to lay a network of roads that could not only link the Port Authority to inland destinations but also the regional countries. Linking by railways was also governments responsibility. PSA says that the government also failed to allocate additional land that it promised for development of the Port. On its part, the PSA has also defaulted on its investment undertakings and failed to invest any amount towards the development or marketing of the Port. Notwithstanding the follies committed by both the parties the end result may end up for good of the Port. If the PSA does withdraw, analysts believe that it would do a world of good to Pakistan.

Now with the prospective quitting of Gwadar Port Operations by Singapore Port Authority, whom should Pakistan invite to replace the departing company? As per the law, international tenders may once again be floated. Despite the political environment of the Province of Baluchistan, its security concerns China may be the front runner in bidding for the Port Operations. Their interest for the same can be accrued from the fact that it has offered Baluchistan government to construct yet another twenty berths at the Port if it gets the rights to operate the Port. This willingness is in line with Chinese strategic interests that it harbors for the Indian Ocean and the North Arabian sea. The increased presence of Chinese Navy in the region specially at the gate way to the Persian Gulf may not only check the US and Indian quest for domination of the North Arabian sea area but also bring the Chinese Navy in the category of global naval powers. China also knows that without some significant naval presence in the Indian Ocean especially the North Arabian Sea, it will not be able to exercise any influence in the Middle-East or control or monitor strategic shipping to and from the Persian Gulf. China’s own 60% energy requirements are shipped through Straits of Hormuz. Not only that US-Iran Stand off, Indian overreach in the Persian gulf and the Gulf of Aden, Syrian crises are some of the impediments that mandates Chinese naval presence in this important area of geopolitical significance.

Nevertheless, whosoever wins the next contract for Gwadar Port Operations, the government of Pakistan has to contribute towards ensuring that they are afforded all cooperation in ratcheting up the full potentials of the Port. It is all the more necessary since Iran, Oman and other Gulf countries have overtime constructed their own Ports and are attracting foreign shipping making Gwadar Port less relevent. Baluchistan’s internal dynamics like Sardari hegemony opposing the construction of Port and external dynamics like international efforts to deny space to China in this strategic SLOC are some irritants that the government has to strategize. The priority must be given to educate the Baluch masses of the immense benefits that the Port when completed will accrue for them. Security concerns is a major bone of discontent for foreign workers in the Province and as such it has to be squelched with iron hand to create normalcy. The violence, sectarianism and shades of localized separatist insurgencies must be addressed to give a chance to Port development. The Supreme Court of Pakistan has recently expressed its concern over the failure of Central and Provincial Governments to control law and order in the Province. The Government must on priority basis link the Port with rail and road network not only within the country but also to the borders of the neighboring countries. The Port still lacks a big warehouse facility, an essential ingredient for any successful Port to be viable for trans-shipping. When the Government completes its part of the support network, the Chinese or whichever company is granted the rights for Gwadar Port Operations and its development must be bound to market and exploit the Port to its full potentials. The Ministry of Ports and Shipping under the prolonged leadership of the incumbent minister, before inking any agreement with the highest bidders must examine the agreement threadbare keeping the national interests supreme. The earlier agreement that the ministry signed with the Singapore Port Authority has had many loop holes. Thus far, the Ministry’s inactions of sort with regards to Port Development reflect its disenchantment on completion of the Port. While giving a push to Port development through the next contract, the Central Government must strive to make Baluch people as stake holders too for development of Gwadar Port for they are the ones that have sacrificed their traditional fishing areas and lands for the Port to develop.