Gwadar port

Gwadar Port

View of the Earth centred over Gwadar, Pakistan

Gwadar Port is a developing warm-water, deep-sea port situated at Gwadar in Balochistan province of Pakistan at the apex of the Arabian Sea and at the entrance of the Persian Gulf, about 460 km west of Karachi and approximately 75 km (47 mi) east of Pakistan's border with Iran. The port is located on the eastern bay of a natural hammerhead-shaped peninsula jutting out into the Arabian Sea from the coastline.

The Gwadar port is situated right next to the strategic Strait of Hormuz and its busy oil shipping lanes. The surrounding region is home to around two-thirds of the world's oil reserves. It is also on the shortest route to the oil rich Central Asian states through land-locked Afghanistan.

Gwadar Port is managed by the Gwadar Port Authority.

The development work started on March 22, 2002 and its first phase was completed on March 2005. Phase I covered building of three multipurpose berths and related port infrastructure and port handling equipment. In 2007, the government of Pakistan handed over port operations to PSA International for 25 years, and gave it the status of a Tax Free Port for the following 40 years. During the same year it was inaugurated by then Pakistani President General Pervez Musharraf.

Gwadar Port became operational in 2008 with the first ship to dock bringing 72.000 tonnes of wheat from Canada by the vessel .M.V POS GLORY which was handled by M/S GURAB LINES Shipping Gwadar.

Gwadar Port is featured on the back of the 5 Pakistani Rupee.

Construction

Gwadar Port is being constructed in two phases with heavy investment from China.

Phase I: Us $ 248 million. Status: 100% Complete

• 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.

Phase II: US $ 932 million: Work Progressing on building 9 additional berths, which will be:

• 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.

China has acknowledged that Gwadar’s strategic value is no less than that of the Karakoram Highway, which helped cement the China-Pakistan relationship. Beijing is also interested in turning it into an energy-transport hub by building an oil pipeline from Gwadar into China's Xinjiang region. The planned pipeline will carry crude oil sourced from Arab and African states. Such transport by pipeline will cut freight costs and also help insulate the Chinese imports from interdiction by hostile naval forces in case of any major war.

Chinese funded US $198 million (out of total phase I cost of US $248 million) and also provided 450 engineers on site to finish the project on time.

Commercially, it is expected that the Gwadar Port would generate billions of dollars in revenues and create at least two million jobs.

Technical and financial feasibility studies commenced by the Government of Pakistan in 1993 but construction could not start until 2002. The Gwadar Port was built on a turnkey basis by China.

Gwadar Port is now being expanded into a deep sea port and naval base with Chinese technical and financial assistance.

Operations

Initially, the chairman of Dubai Ports World, Sultan Ahmed bin Sulayem, who met Pakistani president General Pervez Musharraf on May 5, 2006, expressed a strong hope for management of facilities at the strategic Gwadar port and development of infrastructure in the southern port city and elsewhere in Pakistan. But a decision was taken not to bid, after India’s National Security Council voiced concerns about DP World’s ventures in India, alongside its plans in Pakistan, and Sultan Ahmed bin Sulayem assured the Indians their pull-out was well considered and India need not have any security concerns. The port will now be in competition with that of Dubai in the United Arab Emirates.

Following the completion of Phase I of Gwadar, Govt. of Pakistan on 1 Feb 2007 signed a 40-year agreement with PSA International for the development and operation of the tax-free port and duty-free trade zone. The PSA International was the highest bidder for the Gwadar port after DP World backed out of the bidding process.

In a highly competitive environment, in order to enable Gwadar to compete with its regional peers, the port fees was kept low by allowing a wide range of tax concessions to the PSA International to cut operational and business costs. These include complete exemption from corporate tax for 20 years, duty-free imports of materials and equipment for construction and operations of the port and a free economic zone; and zero rate of duty for shipping and bunker oil for 40 years”. In addition to these incentives, the provincial government of Baluchistan was also asked to exempt the PSA International from the levy of provincial and district taxes.

According to the agreement, the Gwadar Port Authority, the Government of Pakistan would get a fixed share i.e 9% of the revenue from cargo and maritime services, and 15% of the revenue earned from the free-trade zone. PSA International is expected to invest US$550 million in the next five to ten years on creating the operational facilities. Salients of the agreement are as under:

1. Agreement signed between Gwadar Port Authority (GPA) and Concession Holding Company (CHC) a subsidiary of Port of Singapore Authority (PSA) on 05-02-2007.
2. 40 year lease agreement for operating and managing Gwadar Port.
3. PSA will invest US $550 million during the next 5 years for Port Development. The areas where the concession agreement is to be implemented are Terminal and Cargo operations, marine services and Free Zone development.
4. GPA will receive the following fixed share of revenues: 9% from Cargo operations and Marine services. 15% from Gwadar Free Zone business.
5. No duty would be imposed on the machinery and equipment to be imported for development work in this area and for port operations, for 40 years.
6. CHC (the port operator) will have complete exemption from corporate tax for 20 years.
7. Duty exemption for shipping lines and bunker oil for Gwadar port for 40 years.
8. CHC will have complete exemption from all local and provincial taxes for 20 years.
9. CHC will take over the marketing and operations of the current terminal area which provides 602 metres of berthing and will invest and expand berthing space as demand grows during the concession period up to a total maximum of 14 berths in an area of 4.2 Km.
10. Marine services to be operated by CHC will consist of pilotage, tugging, mooring, vessel traffic control, anchorage management and bunkering.
11. GPA will be responsible for dredging of approach channel and harbour to maintain the required depth. All conservancy, security and firefighting services will be provided by GPA.

See also

• Karachi Port
• Port Qasim
• Keti Bandar
• List of seaports
• List of deep water ports

External links

• Gwadar Port Authority
• Pakistan’s Gwadar Port – Prospects of Economic Revival (PDF), by Ammad Hassan, Naval Postgraduate School, June 2005