APSA chairman says proposed corridor will cut conventional 19,000-mile Sino-Europe shipping route by thousands of miles
The governments of Pakistan and China have finalised an investment formula to logistically link the strategically-located Gwadar Port with western China within the next five years.
Beijing would be investing between $30 billion and $40 billion in Pakistan to develop the much-awaited Pak-China Economic Corridor (PCEC) which the logistics experts believe would enable China to significantly reduce the cost of its 70-million-TEUs containerised trade with Europe.
According to All Pakistan Shipping Association (APSA) Chairman Aasim Siddiqui once developed the proposed corridor would cut the conventional 19,000-mile Sino-Europe shipping route by thousands of miles.
Rendering PCEC to be of “immense importance” for the economy of Pakistan, Siddiqui told an intermodal Europe exhibition held recently in Rotterdam, Netherlands, that if transported through PCEC, the shipment of containerised cargo from Europe to western China would take about 9,000 miles only.
“Sino-Europe bilateral trade involves around 225 million TEUs. If only 10 percent of this huge containerised trade goes through Pakistan we would see our transport industry grow by three fold,” Aasim told a group of journalists at his office.
The APSA chief says this 10 percent, which would add at least 7 million TEUs to Pakistan’s containerised trade, was a conservative figure and the potential figure might be up to 20 plus percent.
Work on the significant project, however, had been lingering for quite some time because the Chinese government had been planning to link Gwadar Port with western parts of China through constructing a new road network.
The government of Pakistan, however, suggested to Chinese that instead of building new one they should tape Pakistan’s existing communication network and build an expressway to link Gwadar-Ratodhero Road to the national highway.
“The two sides have decided the formula to make a matching investment on the expressway project,” Aasim said.
Under the formula, the APSA chairman said, a third lane would be added to the two-lane national highway road network to save money the development of a new trade route was to incur.
“Matching funds would be made as the economic interest of two countries has matched,” he said.
To reap the “trickled down” dividends of the Sino-Europe future trade, Aasim said, the government of Pakistan would have to build local infrastructure through developing cargo villages, dry ports, attracting fresh investment in trucking field and so on.
“We would have to engage the trade pro-actively to benefit from this huge thing coming up,” he viewed.
Aasim, who again is due to visit Europe in March next year, said even Kazakistan was pro-actively working to benefit its geo-strategic location by developing a rail network to link Shanghai with Eastern Europe. “They have run the train which would take 16 days to commute between the two destinations,” he said.
This was the PCEC project for which, he said, the Chinese side was setting up an infrastructure development bank in Pakistan.
The corridor would have a “slow trickle-down effect” on Pakistan’s economy, the shipping association chief said.
The APSA chairman during the Rotterdam’s event claims to have received “encouraging” response from international intermodal transport service providers to establish business alliance with Pakistan for the development of PCEC.