Gwadar port and Pakistan

You will never win if you never begin. — Helen Rowland

It was a pleasant afternoon in Gwadar in March 2007. President Pervez Musharraf, Prime Minister, Governor of Balochistan, all Federal Ministers, Chief Minister Balochistan, the Provincial Cabinet and many other VIPS were present for the inauguration of Gwadar port. Gwadar port received the first symbolic cargo on 20 March, 2007. The ship in port was PNSC vessel MV SIBI, which carried dummy cargo for the inaugural off-loading of a container. During the speeches, the President, on the urging of Minister for Ports and Shipping, made the distracting and premature announcement of planning another port at Sonmiani on the Balochistan coast. This announcement diverted attention of the investors towards Sonmiani, which is closer to Karachi. Sonmiani port is yet to see light of the day but the announcement did put a break to the investment boom in Gwadar.

From 2008 to 2014 Gwadar port handled only 5.7 million tons of imported cargo. The cargo was wheat and urea imported by the government through Trading Corporation of Pakistan. The cargo was, then, carried to Karachi through Coastal Highway. Meanwhile the first port operator PSA (Port of Singapore Authority) could not exploit the promised potential of Gwadar. The reasons were many: some on part of PSA and some on part of Pakistani authorities. Ultimately, the Concession Agreement with PSA was terminated in 2012. On 18 Feb, 2013, a new Concession Agreement was signed with COPHC (China Overseas Port Holding Company).

COPHC has been deliberate in consolidating its presence in Gwadar port. The acquisition of land for tax-free zone has been making slow progress. By 2015, most of the land for tax-free zone at Gwadar has been acquired. The road link to Northern Pakistan through M‑8 Gwadar-Ratodero motorway and N-85 Gwadar-Surab Highway, though on high priority, have lingered for so many years. One also reads about Gwadar-Turbat-Hoshab road making some headway. Their completion is forecast during 2016. Inspite of the slow progress of essential infrastructure, the launching of China-Pakistan Economic Corridor has provided a fantastic opportunity to Gwadar Port and COPHC.

In this environment of slow progress, the news of the first export cargo leaving Gwadar port provides a sign of great hope. In a meeting with Mr Zheng Qingsong, CEO of COPHC in Pakistan in January 2015, he had hinted about the high priority he gave to export of cargo from Gwadar. It was rumoured that the first ship will leave with cargo in the first week of April. Nevertheless, the first ship arrived on 10 May and left on 11 May 2015. It was not a container ship. It was a break-bulk vessel MV ZI JING SONG of 27,000 DWT. The volume of cargo at Gwadar is still quite small. Using a container ship for a cargo of six containers only does not make economic sense.

To witness the momentous occasion, Mr Kamran Michael, Minister of Ports and Shipping, was present himself. The first cargo comprised 135 tons of frozen fish exported by Gaba Group of Companies. The fish had been caught by the fishermen of Gwadar. The refrigerated containers are destined for Far East. However, the cargo went westward to Jebel Ali to be loaded onto a regular service container ship for the Far East. Another batch of export cargo will leave Gwadar on 18 May. With regular export cargo service, the fishermen of Pasni, Gwadar and Jiwani area will have a direct link to rest of the world. That will change the life of the local population.

The credit for this achievement goes to COPHC. The exporter, of course, paid normal freight rates from Gwadar to Jebel Ali. The vessel was not carrying any import cargo. So COPHC had to bear the cost of diverting this vessel for Gwadar and offered other concessions. The service can become a regular feature in the long run, only if the quantum of export and import cargo justifies the costs of vessels calling at Gwadar.

One hundred and thirty five tons of export cargo appears a laughable quantity, that too in such a manner that may not be sustainable for long. However, it demonstrates the commitment of COPHC that they will not leave any stone unturned to make a success of their Gwadar port venture. It also ushers in an open gateway of prosperity for the fishermen of Gwadar. So let us not dismiss this as an insignificant event. As the Chinese sage Lao Tzu said, “A journey of a thousand miles must begin with a single step.”