Making Gwadar Port functional

[Naveed Yaseen]

By Syed Fazl-e-Haider
THE government has decided to generate business activity at the still non-functional Gwadar Port. Cement export and some imports of wheat and fertiliser may also be routed through this port.

Chief Minister Nawab Aslam Raisani is making serious effort to persuade the federal government to unload imported wheat quota of Balochistan and 100,000 tons of fertiliser at the Gwadar Port. The first ship loaded with fertiliser was due on Sunday.

The nature of the agreements with the port operator signed by the former federal government is causing a delay in making the Gwadar Port functional, according to the chief minister. The provincial government has proposed that the agreement may be revised.

The concession agreement, signed in February 2007 between the government and the Port of Singapore Authority (PSA), stipulates ministerial authority over the operators to fix port fees.

Under the agreement, Port of Singapore Authority (PSA) International, the port operator is bound to set up three different companies to look after various activities at the Gwadar Port, including cargo operation, marine operation and the free economic zone. PSA is also bound to invest $550 million for improvement of Gwadar Port, besides building additional berths.

The questions are being asked are: Why has the PSA so far failed to set up the required companies for handling port operations even after lapse of more than one and half year? Why the delay in fixing of port fees which could attract shipping lines?

Balochistan has demanded that 20 per cent of the workload of other ports should be diverted to Gwadar. Cement exporters have to bear heavy demurrages at Karachi port.

Bulk cargo facility is available at Gwadar. It is the only port with a RoRo facility for moving cargo directly to the berth without using cranes. Moreover, Gwadar will get business as soon as export of cement is shifted to it from Karachi However, cement exporters and wheat importers have reservations about the higher handling and transportation charges at Gwadar.

Gwadar seaport is an important project for the province that is expected to contribute to the provincial exchequer significantly. Former provincial government had announced to exempt the Singaporean operators from all local and provincial taxes for 20 years. But Balochistan Finance secretary Mehfooz Ali Khan told this scribe that there was nothing in black and white about exemption of local and provincial taxes.

According to Federal Minister for Industries and Production Mian Manzoor Ahmed Wattoo, an amount Rs1 billion has been allocated for establishment of Export Processing Zone to support development activities around the port..

A fully functional Gwadar Port is estimated to earn a handsome revenue of $40 billion a year, when China, Afghanistan, Central Asian states and Russia will start using the port where cargo ships up to 0.25 million tons could anchor. Initially the port can handle 100,000 containers, 300,000 tons of general cargo and half a million ton of food grains.

Some people say that marketing of cargo for the new port should have started much earlier so that once the port was ready, it could become fully functional.

Following steps should be taken to make the Gwadar Port functional:

*Gwadar Port Authority should announce the port tariff so that the ship agents and cargo consultants can come forward to use the port facilities. A competitive tariff would attract shipping lines to discharge cargo at Gwadar instead of cruising to Dubai and Karachi and leave for the next port for loading.

* Special attention should be paid to maintain draft of approach channel and of berths by regular dredging.

* The GPA should send information on the facilities including cargo handling, berthing, night navigation, storage etc to the major shipping lines to facilitate them to plan cargo well in advance.

* The government should quicken the pace of development of communication links, network of roads, railways and relating activities, including trade transactions, goods transportation and storage facilities in the port city.

*All the agreements previously signed with the PSA need to be revised and re-drafted with the help of ports and shipping experts to remove the snags in port operations.

http://www.dawn.com/2008/12/22/ebr9.htm