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Potential of Gwadar Port
By A.M. Malik
GWADAR port has been under constant discussion for some time. There are apprehensions in some quarters about the success of plans for the port. These fears could well prove true if the port is not managed in a professional manner.
There are also contentions that Gwadar is destined to become a feeder port owing to depth constraints. This, however, is not true. A depth of 14.5 metres is safe enough for a large number of post-Panamax mother ships. Adding another two metres or so to bring the vessel on top of the tide - a common practice - would enable even mother ships with a draft of about 16 metres to be accommodated.
This capacity would almost equal that of Sallalah and Dubai. The port has been designed for 50,000 DWT (deadweight tonnage) vessels of a depth of 14.5 metres, but resting on piles of 42-45 metres, below the chart datum, could make the channel deeper, at least by a metre and a half or even more without jeopardizing safety.
It will take another 10 years or so for recently launched ships with a capacity of 8,000 TEU's (twenty-foot equivalent unit) and above to capture the market. There is enough time for Gwadar to get established and for future extensions. However, at present because of the manner in which the port is being managed, it may turn into a failed project.
During the late '70s and early '80s, the new concept of containerization of cargo prompted nations to opt for altered strategies. More containers meant not only more revenue but also reduced costs. It brought about a revolution in cargo handling and accounting techniques. This led to larger parcel-loads on board larger ships, compelling ports to discharge the containers quickly to enable the ship to leave the port, thus saving on harbour dues (i.e. wet charges). This also brought about the concept of transshipment in its present form, as cargo handling did not remain as cumbersome as before.
It is estimated that the Asian container trade is expected to increase more rapidly than the overall world average during 1999-2011. Asia's share in containerized exports will rise from 46.4 per cent in 1999 to 51.5 per cent by 2011. Containerized imports will rise from 40 per cent to 44.1 per cent. In the Escap region, meanwhile, container handling will increase from 94 million TEU in 1999 to 155mn TEU in 2006 to around 216mn by 2011. Of this South Asia is also expected to post a high increase in 1999-2011 with 10 per cent in Sri Lanka and 9.4 per cent in Bangladesh and India.
This means that there should be focus on two important areas. First, the port should be shaped basically for container handling and, secondly, for being geared towards transshipment. The suitability for transit trade of the Central Asian countries can be considered if and when the situation so allows.
During the past decade or so there has been a trend of privatizing ports. As mentioned, containerization has brought about altered scales of efficiency, services and quality care. Competitive market forces have compelled ports to seek privatization as the answer. Owing to their inherent structure and serial regulatory orders, our ports would not be able to compete commercially in the private sector.
There are several questions to be answered before the Gwadar plans can find a proper context. Is Gwadar to be a container handling port or a mix with LCL/non-containerized cargo? Would it be used only for transshipment/transit purposes or would it be used for local imports as well? Based on this, will decisions be taken on the tariff structure and the manner in which it will affect the other two ports?
The adoption of relevant policy should determine whether this port would be able to earn the much-needed revenue or function at the cost of the other two ports. However, previously no meeting was conducted with stakeholders on the basis of which some policy could have been evolved.
The geographical position of Gwadar makes it an ideal Hub port, provided we stop looking towards Afghanistan and the Central Asian nations for any transit cargo - at least for the time being. Strategically, Gwadar is situated atop the shipping lane through which at least 60 per cent of the world oil passes. In economic terms, it is the central point encircling parts of eastern India and curling around the Gulf states.
Compared to regional hubs, Dubai is about 500nm from Gwadar. A ship will take about 30 hours more than Gwadar one way, with extra running expenses of about $100,000 for a 20,000-ton ship, on a return trip - notwithstanding the extra time and insurance for entering Hormuz. Had we constructed Gwadar a decade earlier, we would have been the most vibrant hub port in the region. During this time quite a few hubs have come up after Sri Lanka. Nahva Sheva, Salalah, Fujerah, are but just a few.
Yet as the ports come into being so does cargo - or is it vice versa? So would the cargo for Gwadar, despite the misunderstanding some quarters are causing with regard to Gwadar's competition with various ports, be handled professionally.
While a considerable amount of money is being spent on Gwadar, there has been no development in the industrial sector. Till the time the export zone is set up, an immediate stepping stone could be the establishment of regional warehouses by multinationals. It only requires a huge warehouse and a generator, pending any other facilities. A road is, however, necessary for the transportation of containers to and from the port.
Karachi will also benefit. Pakistan's cargo now being transshipped through Sallalah or Dubai would go through Gwadar saving much-needed foreign exchange. For Central Asian transit trade, Iran has a fully developed infrastructure. Gwadar is only 70 miles from the Iranian border; a link road will be of considerable advantage for both Iran and Pakistan with the former earning its own share of the land route and Pakistan through shipping for the Central Asian cargo.
We should also keep in mind the Chinese factor. Our region is likely to see an overwhelming influx of Chinese trade. And, expectedly, the cargo volumes are likely to see a phenomenal increase in which Gwadar should be able to take a sizable market. If the Chinese shipping lines are able to acquire the key functions of the port during privatization, it will be beneficial both in strategic and economic terms.
There has been heavy political fallout of the Balochistan situation on Gwadar. Continuing with the status quo would be disastrous. It has also been announced that the vacancies in BPS 1-16 are to be filled by locals. It is no secret that handling port equipment is a sophisticated process and any conditions must be based on the availability of trained force.
Other points too must be addressed. The tugs required to berth the ships have less power than required even during a fair weather. In Gwadar, the winds especially during the monsoons are strong. Any ship that goes out of control can block the channel.
Where cargo handling equipment is concerned, the provision of outdated portal cranes do not make sense as these were discarded by other ports more than 30 years ago. There is an outdated version of a channel maintenance system for which the wherewithal is not available even to shift or reposition buoys.
Land should have been acquired prior to the construction of the port. This aspect was not even addressed. It became impossible to acquire land at a later stage because of the phenomenal rise in prices. The port has used not a single inch of Gwadar land as it is built on reclaimed soil from the sea. Of the 800 metres back-up area, only 250 has been turned into concrete. What will happen when sand-laden winds blow on to the berths? The slow pace of constructing buildings and residential areas is cause for concern.
Adopting remedial measures, and following a well thought-out policy are the only ways to ensure that activity in Gwadar is not disjointed and begets positive results.
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