Gawadar Port Research Paper

Gawadar Port; prospects and ChallengesBy

Sardar SajjadAhmed

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Contents

IntroductionSection ITheoretical frame work Section IIOverview of Gawadar PortSection IIIMilitary and Political Aspect of Gawadar PortSection IV

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Interest of Other Countries in GawadarSection VComparison with Neighbouring PortsSection VIChallenges in Development of Gawadar PortRecommendationsConclusion

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INTRODUCTION

Depleting oil resources and growing energy demands in world has increased the Pakistan importance manifolds. Energy and trade route from Central Asian republics, China and Afghanistan will have to pass through Pakistan. These countries were longing for warm water access since long.1 If Pakistan enjoys any geopolitical importance in the region, it is largely due to the geo-strategic importance of the south western province of Balochistan. The province is situated at cross road of South Asia, Central Asia and Middle East.2

Baluchistan importance is due to its long 760 km coastal line, known as Makran Coast. The Makran coast stretches itself from Gadani near Karachi to Iranian Chabahar port. It provides many suitable places for the establishment of Naval as well as commercial ports. Presently important ports like Karachi, Bin Qasim and Gawadar are established on Makran coast. Ormara, Pasni and Jiwani are some of the important naval bases situated on the Makran coast. These bases provide an opportunity to monitor the Indian Ocean as well as act as listening post.

Development of Gawadar port has also provided Pakistan with long awaited strategic depth for its Naval and commercial resources in case of crisis with India. Gawadar is located very near to Indian Ocean highways. 80% of world shipping passes very near to Gawadar carrying oil and raw material to Europe, America and Far East. Therefore Gawadar is strategically located at a place to create a hindrance in smooth flow of the commercial trade.

Chinese incredible investment in the Gawadar port is seen by India and US with the same perception. Since China’s is in process of consolidating its foothold in Indian Ocean with the establishment of ports starting from South China sea to Persian gulf.

Objectives of the StudyGawadar is positioned at junctures of three regions namely South Asia, West Asia and Central Asia. It is expected to become a terminus point of trade and energy corridor emanating from Central Asian region. This paper aims to highlight the significance of Gwadar port with a view to bringing forth the economic and strategic advantages of the port as well as its effect on securing Sea lines of Communications in Indian Ocean in relation to International trade. Questions to be Addressed1. To explore whether Gawadar has potential to become future economic hub for the

region?2. What are the political and military aspects of the Gawadar port?

1 Rashid Ahmed Malik, “Emerging Regional Economic Integration in East Asia: Challenges And Choices For Pakistan” IPRI Journal, Winter 2007, Volume VII, Number 1: 50. 2 Syed Fazal-e-Haider, “Balochistan: challenges and opportunities” (Expert meeting on Afghanistan and regional stabilization, Rome Ministry of Foreign Affairs 28th & 29th May 2009.) http://www.syedfazlehaider.com/research-papers/, (accessed on November 15th 2011).

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3. What are the challenges in the development of Gawadar port?4. How other regional countries see developments in Gawadar port?5. Can Pakistan make Gawadar port operational?

Limitation of the StudyThe scope of this study is very vast. There are so many factors and actors involved with the development of Gawadar port. It is very difficult to identify interest of each actor in the right manner. There is abundance of both primary and secondary sources of information on the issue related to Gawadar development but there is less data on the political nature of the problem specially the hidden agendas of the Great or Major Powers.

MethodologyThe Qualitative method of research has been adopted for this particular study, which is going to be based on secondary sources. Secondary data is used through books, journals, editorials, magazines, research papers, news papers and electronic resources

Review of LiteratureThe available literature on the Gawadar port reveals great prospects for the prosperity and future of the Port. Due to its proximity to Persian Gulf and at a strategic cross roads of three regions it offers economic opportunities. Since Gawadar provides shortest route to the warm waters of Indian Ocean form north therefore trade of Central Asian States is likely to be fully dependent upon it. However few of the scholars have linked the future of the port with the security situation in Balochistan and Afghanistan. Others link it with the development of communication infrastructure.

Lt Col Syed Mohammad Iqbal in his book “Baluchistan; Its Strategic Importance” discusses in detail the importance of port facilities at Makran Coast in relation to oil and trade politics in Indian Ocean. He has investigated the interest of Great powers during Cold war and Great game in Balochistan. His inquiry goes back to early periods when Alexander and Mohammad bin Qasim used Makran coast. He has also highlighted the ingresses of the British agent to the Queen Sir Sandeman into the Baloch Sardari system.

Christopher J. Pehrson in his study Strings of Pearls: Meeting the Challenges of China’s Rising Power Across the Asian littoral examine the growing maritime of the power of China. He describes the growing Chinese sway from South China Sea through Indian Ocean to Arabian Sea as strings of pearls. He however doesn’t see Chinese expansion as confrontationist and conflicting. He proposes action for both US and Chinese government for the smooth sailing.

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Zahid Anwar in his research article Gawadar Deep Sea Port’s Emergence as Trade and transportation Hub: Prospects and Problems highlight the potential benefits likely to be accrued from development of Gawadar port. He emphasized that Middle East and Central Asian resources will find a market in Asia through Pakistan. This will reduce Pakistan’s dependence on the west.

Robert G Wirsing in his article Baloch Nationalism and the Geopolitics of energy Resources: The changing Context of the Separatism in Pakistan discusses in detail the Balochistan importance for fulfilling its energy demands. He explores the insurgency in Balochistan in the back drop of oil politics in the region. He considered the importance of the Gawadar port as strategic alternative for Pakistan Naval forces. He also highlights the economic potential of the province. He sees government failures in resolving the Baloch insurgency issue. Division of StudyThe study has been divided into six sections. Section I, is an effort to understand the Gawadar port project in the light of Mackinder’s heartland theory. Section II gives the overview of the Gawadar Port its historical prospective, facilities and importance of its strategic location. Section III would evaluate its military and political aspects. Section IV would elaborate the interest of other countries in relation to Gawadar project. Section V would explore the neighbouring ports and their comparison with Gawadar. Section VI would discuss the challenges being faced in the development of the Gawadar port. This section would also present some solution and remedies in from of viable steps to obtain maximum benefit from the Gawadar project.

SECTION I

THEORETICAL FRAMEWORK

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Heartland theory was propounded by the Halford Mackinder at the start of the 20 th

century. He considers the land masses of Central Asia and surrounding regions as the Heartland of the world. According to Mackinder:-

“The "world-island" is the land mass of Euro-Asia-Africa. Heartland extending from Eastern Europe into Russia at the centre of which was a pivot.”

Who so ever controls the pivot controls the Heartland, who controls the Heartland control the world-island, he who controls the world-island control the world.3 According to him this region was the centre of power competition. Mackinder theory initiated a new curiosity in the geopolitics. It was readily applied as a major strategic doctrine in the defense policies of all major powers of the time.4 To counter Mackinder’s theory Nicholas Spykman presented Rimland theory in the centre of 20 th

century. This became an alternative paradigm.

Spykman’s theory accepted the significance of Heartland but while weighing the importance of Heartland theory, describes how the expansion of the land based power can be restricted. Spykman’s gave more importance to the Rimland countries. Where as Mackinder’ emphasis was on the pivot. Spykman gave more importance to sea power. Mackinder saw history as struggle between land base and sea base powers. Mackinder and Spykman influenced the foreign and defense policies of the super powers during the cold war. Both the approaches of Heartland and Rimland were applied during this period in the conflict and cooperation between Great powers.5

History has reveals itself that to have political control over the resources of the Heartland all the Powers tend to make coalitions, build up statuses and defy rivals.6 Of course, Asia is rich with historic rivalries: India and China, Pakistan and India, Iran and Pakistan, Iran and the US, the US and China.7 While on the Makran coast in the Arabian Sea, Iran’s Chabahar port and Pakistan‘s Gawadar port, presents a promising competition for influence in the Indian Ocean, explains Christophe Jaffrelot,

3 Jaap W. Nobel, “Morgenthau's Struggle with Power: The Theory of Power Politics and the Cold War”, Review of International Studies, Vol. 21, No. 1, Jan, 1995: 64.4Aftab Kazi, “Pivotal Pakistan: GCAP and the Geopolinomics of Central Asia’s Traditional Indus Basin Corridor” (Paper presented during the International Conference on “ Partnership, Trade, and Development in Greater Central Asia,” Kabul Afghanistan. April 1 and 2, 2006).5 Ibid.6 Ibid.7 Christophe Jaffrelot,“Gwadar and Chabahar display Chinese-Indian rivalry in the Arabian Sea” Yale Global, January 7, 2011, http://yaleglobal.yale.edu/content/tale-two-ports, (accessed December 12, 2011).

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“China helps Pakistan with its port at Gwadar while India assists Iran with the port at Chabahar. The development entails rail lines, highways and other massive construction projects and signals that the emerging Asian giants seek connections while resisting encirclement by rivals. Some of the new alliances make for strange bedfellows and, depending on political or military events, may not last for long”.8

Now all the major powers of the world want to reach the modern Heartland for securing their energy requirements. The shortest possible out let for the transportation of black gold to the seas is key to success. That is not possible without having control on the oil and gas pipelines routes terminating over the Rimland of Gawadar Balochistan or Iran, Chabahar port. This involves competition between US, UK & other NATO countries against Russia, China and other Shanghai cooperation countries for influence of power, hegemony and profit in central Asia and Trans Caucasus.9 As stated by Hans. J. Morgenthau in Politics among actions: The Struggle for Power and Peace, my International politics, “all politics, is a struggle for power.”10

This new great game is all about the influence on the resources of Central Asian Republics (CARs). Mean while Rimland or Mackinder’s outer crescent countries like Pakistan and Iran are ready to accrued maximum benefit by attracting trade through their ports facilities and communication infrastructure. War on terror in Afghanistan is to be seen in the same context, America after securing the Middle East energy resources have come to secure Afghanistan for the safe transportation of oil and gas to warm waters.11 American and Chinese presence in the Balochistan is prelude to their long term energy security.

8 Ibid.9 Martin, W. Lewis, “Balochistan and a New “Great Game” in Central Asia,” Geo Currents, May 20, 2011, http://geocurrents.info, (accessed December 12, 2011).10 Jaap W. Nobel, “Morgenthau's Struggle with Power: The Theory of Power Politics and the Cold War”, 64.11 Ronald Hee, “World Conquest: The Heartland Theory of Halford J. Mackinder,” Journal of Singapore Armed Forces, Journal Volune 24, Nomber 3 (Jul - Sep 1998) http://www.mindef.gov.sg/safti/pointer/back/journals/1998/Vol24_3/8.htm, (accessed on December 5, 2011).

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Figure I; Halford Mackinder’s Heartland and Pivot in 1904 and 191912

Figure ii Pivot Area13

Gawadar location on the Makran coast makes it very important and ideal for securing sea lines of communication (SLOC). The geographic importance of this area is evident from the fact that long before Mackinder’s all the invaders form

12 The map is borrowed from (Megoran and Sharapova, “Mackinder’s “Heartland,” p. 9).13 Eldar Ismailov and Vladimer Papava, “The Heartland Theory and the Present-Day Geopolitical Structure of Central Eurasia” Silk Road papers, http://www.silkroadstudies.org, (accessed November 25, 2011).

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North or South have all trespassed through Gawadar.14 Heartland/Rimland approaches will be used as a reference to an alternative geopolitical conception about the Pivot of the 21st century and possible scenarios for the future.15 In the same context Gawadar importance becomes evident being close to Strait of Hormuz and shortest route for CARs to warm waters. Gawadar therefore becomes the pivot of modern Heartland.

SECTION II

OVERVIEW OF THE GWADAR PORT PROJECT

Historical Back Ground: Gwadar is surrounded by Makran region and Dasht and Kolanch valleys.16 In 303 BC, the area came under the rule of locals. The area did not appear on the geo-political map again till 711 AD, when Muhammad Bin Qasim's army conquered the town of Gwadar.17 Later, the Mughals and the Safavids also planted their flags in the region. In 1550, an admiral of the Ottoman Empire, Seydi Ali Reis travelled to this area. In his book, Mirat Ul Memalik (The Mirror of the Countries), he wrote that Baloch tribes were living in Gwadar and their chief was Malik Jelaleddin, son of Malik Dinar. In 1581, the Portuguese captured the area.18

A Portuguese writer mentioned in his memoir that Gwadar's rulers had resisted the colonial army but later they were arrested and the town suffered badly.19 Taimur Sultan was given the authority to rule over the Gawadar by the Khan of Kalat in 1783.20 When the Sultan regained his thrown in Muscat, he continued his rule in Gwadar through his governor or wali.

The governor was than asked to overpower the nearby coastal town of Chah Bahar, now an Iranian port. The Gwadar fort was built during Omani rule. At some point, the English also visited, and introduced the people of the area to the system of telegraph. Gwadar remained under the Sultan of Oman until 1958. Realizing the importance of Gawadar on September 8, 1958, Pakistan bought the Gwadar Enclave from the Sultan

14 Ahmad, Iqbal Syed LT Col, Balochistan: its Strategic Importance, (Karachi: Royal Book Company, 1992), 118.15 Eldar Ismailov and Vladimer Papava, “The Heartland Theory and the Present-Day Geopolitical Structure of Central Eurasia,” 16 Ahmad, Iqbal Syed LT Col, “Balochistan: it’s Strategic Importance,” 64.17 Ibid.66. 18 Mines & Minerals Development Department Balochistan, www.balochistan.gov,pk, (accessed November 29, 2011).19 Ibid.20 Ibid.

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by paying $3 million.21 He was blamed for paying heavy price for the desolated fishing town of Gawadar. He however had realized the importance of the Gawadar importance seeing American-Russian interest.

Seaports are crucial for affluence and safety of the countries. The same is true for Pakistan as over 95% of her trade is through the sea. Karachi and Bin Qasim ports remained the sole port complex of Pakistan since long. This compulsion neither offered economic diversity nor addressed strategic vulnerabilities of Pakistan. Realizing these constraints, Gwadar Deep Sea port was build near the mouth of oil rich Persian Gulf and Indian Ocean oil highways. Besides domestic trade requirements, Gwadar port is equally suited to handle the trade of Western China, Afghanistan, also providing an economical route for flow of natural resources of Central Asia.22

2.1 ConstructionThe survey of Balochistan coast was first carried out by the Worth Condrick in 1954 who was deputed by the US. On his recommendation in the plan to construct the deep sea port at Gawadar was conceived.23 The formal plan to construct the port was conceived by the Government of Pakistan (GOP) in 1993 and was approved by the Executive Committee of the Cabinet in June 1994.24 Karachi Port Trust (KPT) was asked in December 1995 to initially finance the port project up to Rs one billion. However GOP released Rs Two billion in 1996 for the construction of the Gawadar port. During March 2002 Sino-Pakistan agreed to mutually built the Port and China Harbour Construction Company was contracted to build phase 1 of the Gawadar Port.25

2.1.1 The First Phase: First phase was completed in Jun 2006 at a total cost of the $ 248 million out of which $ 198 million was financed by the Chinese government. The first phase includes construction of three berths of 200 m each lengths. 4.5 km approach channel with a depth of 12.5 meter with a turning radius of 450 meter. Service berth of 100 meter. 602 meter long quay/jetty to handle Bulk carrier up to 50,000 Deadweight tonnages (DWT) and container vessel of 25000 DWT. Port infrastructure and port handling equipment and pilot boats, tugs, survey vessels were also incorporated in the first stage of this development.

21 Zahid Anwar, "Gwadar Deep Sea Port's Emergence as Regional Trade and Transportation Hub: Prospects and Problems." Journal of Political Studies, (2010):  Dec 13, 2011.22 Ibid.23 Ibid.24K Riffat Zaheer, “Development and Operations of The Port of Gawadar,” http://www.ifsma.org/tempannounce/aga33/Gwadar, (accessed December 12, 2011)25 Ibid.

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2.1.1.1 The Second Phase: Project is being built on build operate own (BOO)/build operate transfer (BOT) basis and is expected to take 8-10 years depending on the active participation of the private sector at the cost of $ 526 million.26 The second phase include nine additional berths including 4 Container Berths, 1 Bulk Cargo Terminal (to handle 100,000 DWT ships), 1 Grain Terminal, 1 Roll on/ Roll Off (Ro-Ro) Terminal and 2 Oil Terminals to handle 200,000 DWT ships. The cost of this development work is estimated to be US $ 840 million and the project was expected to be completed by 2010. A Chinese consortium has offered to provide a large part of the US $ 840 million required to construct the second phase of the port.

2.1.1.1.1 Port Operations: In 2006 the Gawadar port operation was given to the Concession Holding Company (CHC) a subsidiary of Port of Singapore authority (PSA) despite the fact that China has made major contributions and stakes in the project. It was decided mutually by the PSA and GOP that former will invest $ 550 million during next five years for Port Development and later will develop the road and rail network to connect Gawadar with rest of the country.

Unfortunately both failed to invest and develop the related infrastructure. According to the Planning Commission’s Task Force on Maritime Industry27 GOP was to connect the Port through road and rail link to Afghanistan, Iran and Western China within four years of its operation but fails to meet its commitment. On the other hand GOP has redirected its cargo from Karachi port and paid Rs 2,000 per tone in subsidies apart from paying PSA Rs 220 million as subsidies. PSA has not invested during the first three years and was not likely to do so in future as well. No commercial ships have ever arrived at Gawadar port nor is it likely in future. Basing on these allegations the deal with PSA has been scraped and negotiations for new port operators are underway.

2.2 Strategic Importance of Gawadar Port Visa-a-Vis Indian OceanThe Indian Ocean is surrounded by the world landmasses of Asia, Africa, Australia, and Antarctica. It is also flanked by the Pacific Ocean in the east and the Atlantic Ocean in the West and the Antarctic Ocean in the South. It is linked with the Mediterranean Sea through Suez Canal. Thus it inter connects the power loci of the North, East and West.28 In the present circumstances access to the Indian Ocean from north is by the way of Balochistan. Any route other then Afghanistan-Balochistan would pass through certain “choke points” like, strait of Malacca near Singapore, the Sunda strait and the Macassar Strait near Indonesia. In the North important choke points are the Strait of Aden in Babel-Mandeb, Suez Canal linking the Mediterranean sea with the red sea and the in the South West the Cape of Good Hope.29

26 Zahid Anwar, "Gwadar Deep Sea Port's Emergence as Regional Trade and Transportation Hub: Prospects and Problems."27 “Gwadar Port Deal with PSA” Daily Times, January 03, 2010.28 Ahmad, Iqbal Syed LT Col, Baluchistan: its Strategic Importance, 276.29 Ibid.

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The power controlling these caps and straits, let alone the possession of archipelagoes like Diego Garcia, Socotra, Dahlak, Maldives, Seychelles, lacadives, Andaman and Nicobar would enhance its ability to regulate oil and other raw material supplies to United States, Western Europe, Japan and Australia. It will also control the inflow of merchandise from the western world to the littoral30 and hinterland states of the Ocean. Location of Gawadar port would be controlling the supply of Gulf oil; Constituting sixty percent of the world’s known reserves. In addition it would also make Central Asian countries (CAR) dependable on it for their energy exports. The port facilities at Gawadar, Pasni and Karachi also provide bases for Naval fleets in the Arabian Sea. This location offers a unique capability to even control the port of Good hope in South Africa. Presently sea traffic carries eighty percent of the raw material and oil in super tankers to West Europe which passes through the Cape of Good Hope.31

The importance of Indian Ocean is evident from the Australian government latest comments on the issue of Uranium selling to India despite being non signatory of NPT, “that the reasoning behind the change of policy was to maximise the prosperity and the strength of Australia`s relationships in the Indian Ocean region. This is after all the `Asian century`, as it was repeatedly trumpeted at the latest APEC (Asia Pacific Economic Cooperation) meeting held in Hawaii in November 2011states that Australian might as well take advantage of Indian geo-political position in Indian Ocean. After all it is Asian century.”32

Keeping all the above factors in mind it is evident that Gawadar is located very close to the Indian Ocean SLOCs. It can serve as bridge between South West Asia and South Asia; Afghanistan, Iran and CARs are rich in energy while India and China are facing acute deficiency of it. China with its fastest growing rate of 9 % has invested massively in its southern province with the tune of over 25 billion dollars. Xinxiang also require short route to Indian Ocean. Moreover all other ports except Gawadar and are either congested or prone to political unrest thus making Gawadar a natural choice.

2.3 Gawadar-Terminus Point for Trade and Energy Corridor (TEC)

30 There are 37 littoral and inland countries and 16 hinterland countries. These are large number of countries along the Indian Ocean basin and in the hinterland with diversified ideological outlook and political systems largely form part of third world. 31 Ahmad, Iqbal Syed LT Col, “Baluchistan; It’s Strategic Importance.” 277. 32 Transcript of doorstop: 11th Meeting of the Indian-Ocean Rim Association of Regional Cooperation Council of Ministers at http://www.foreignminister.gov.au, (accessed on 6th December 2011). See also, Rakisits Claude, “Pakistan should have its share too” at http://epaper.dawn.com/, (accessed on 6th

December 2011)

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The concept of corridor emanates from inter regional trade and dependency. Once we refer to trade corridor we are talking about road and rail networks which interconnect different regions. This also involves port facilities, dry ports, borders storage facilities and related infrastructure. Energy corridor refers to oil and gas transportation pipe lines to and from different regions. Gawadar is located at a place which can become a terminus point for the trade and energy routes.

However due to lack of requisite infrastructure, finances and security situation in the neighbouring Afghanistan this aim could not be materialized since 1985.33 However with the Chinese assistance the completion of Gawadar port was carried out in 2007 and advent of proposed communication infrastructure connecting Pakistan with Iran and Afghanistan the concept of corridor seems to be materializing.

Almost all the countries of regions are vigorously developing their communication infrastructure which includes ports, roads, rail, and air networks. Pakistan has proposed to invest $ 6 billion in its National trade corridor (NTC) project for improving all sectors of communication, including air ports, shipping and aviation. NTC project would link Karachi to Gawadar and Khunjarab in Pakistan’s Northern Areas. Asian development Bank (ADB) and World Bank (WB) agreed to fund this project.34 India has constructed Zaranj-Delaran road connecting Iranian Chabahar port with the main ring road highway system of Afghanistan.35

On the other hand gas pipe line projects between Iran Pakistan & India (IPI) and Turkmenistan, Afghanistan, Pakistan and India (TAPI) are also important component of energy corridor. Pakistan concept of serving as TEC has gained more importance in the back drop of growing energy needs of India and China. Moreover United States after securing the energy resources in the Middle East and CA in the after math of war on terror has mad nuclear cooperation with India. This has further strengthened the Pakistan resolve to make the Gawadar port operational as soon as possible.

2.4 Trade Potentials of the Gwadar PortAccording to S. Frederick Starr the economic benefits from the new silk route can be obtained within 18 to 24 months provided Priority projects are completed. He further goes to explain that “Priority projects include the completion of the Afghan Ring Road and Kabul-Herat highway and linking them to continental trunk routes, especially to

33 Fazal-ur-Rehman, “Prospects of Pakistan becoming a Trade and Energy Corridor for China” Institute of Strategic Studies Islamabad, XXVII summer, 2007 no 2. 34 Syed Fazal-e-Haider, “Balochistan: challenges and opportunities” (Expert meeting on Afghanistan and regional stabilization, Rome Ministry of Foreign Afairs 28th & 29th May 2009.) http://www.syedfazlehaider.com/research-papers/, (accessed on November 15th 2011).35 Mahmoud Baloch, “Iran and India’s cooperation in Central Asia,” China and Eurasia forum Quarterly, Volume7, No, 3, 2009.

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the Pakistani port at Gwadar; completing trans-Afghan rail lines linking Europe and Asia; constructing the TAPI pipeline; and completing electrical transmission lines linking Central Asia, Afghanistan, northern Pakistan, and India.”36

The evolution of Gwadar will unlock fresh avenues for overseas investment in entire region of both Heartland and Rimland countries. Estimates of potential unnamed investors run as high as $8 billion, with the money used to develop various aspects of the infrastructure and economy needed to support large-scale operations and the influx of people to Gwadar Port.37

It is estimated that Pakistan would be earning about $ 600 million annually just from the IPI gas transit fees from India. While India would be saving $ 300 million annually apart from assured supply to its developing economy. Some of western writers like Wirsing are not hopeful for the planned energy pipe lines he considers them doomed to be a failures but he also considers transport corridors or net works competitive and politically divisive. According to him “the primary function of these networks is, along with promotion of commercial and political ties, access to energy rich CARs and to achieve some influence over the production, processing and distribution of energy resources.”38

Similarly development in the southern Chinese provinces would bear results only if it finds a shorter access to Indian Ocean for its exports. As its own port is 4500 km away from Sinkiang where as Gawadar is just 2500 km away. Likewise the transportation of Central Asian Countries uncaps oil and gas reserves would be much cheaper and easier to outside world from Balochistan. It plays an important role in findings way to Indian Ocean and Arabian Sea through Karakorum highway for China and Afghanistan for CARs states.

Power controlling the Makran coast would also be able to harness the natural resources of the Indian Ocean and the virgin Antarctica.39

36 Starr S. Frederick et.al, “The Key to Success in Afghanistan A Modern Silk Road Strategy” Institute for Security and Development Policy and Central Asia-Caucasus Institute & Silk Road Studies Program, May 2010, at www.silkroadstudies.org (accessed December10, 2011). 37 Sarfaraz Ahmed, "The Latest Hotspot: Gwadar,” Daily Times, May 5, 2004.38 Robert G. Wirsing, “Baloch Nationalism and the Geopolitics of energy Resources: The changing Context of the Separatism in Pakistan” Strategic Studies Institute of USA, April 2008. 39 The region of Indian Ocean accounts for 60% of uranium, 40% gold, 9.8% of diamonds, and 50% of proven tin reserves of the world. In addition it has 7% of nickel, 14.7% of iron, 13.5% manganese. Balochistan also possesses uranium, gold, natural gas, coal chromites, sulphur, copper, Zicron and black pearls.

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SECTION III

MILITARY AND POLITICAL ASPECTS OF GWADAR PORT

The geo political school of realist thought and political geography generally stresses the influences of geographic factors on the state powers and international conduct. Illustrative of early geopolitical thinking is Alfred Thayer Mahan’s (1980) The Influence of Sea Power in History, which maintained that control of seas shaped the national power. Thus states with extensive coastlines and ports enjoyed a competitive advantage.40

Gwadar Port is important for Pakistan not only for a supporting its drowning economy but it is also important from strategic and security position. During the fall of Dahaka in 1971, Pakistan complete commercial as well as Naval fleets were successfully blockaded by the Indian navy. There were serious threats again in the midst of Kargil crisis from the Indian Navy in 1999. These serious lacking in the naval defense compels Pakistan to urgently complete the construction of Ormara base.

A Gawadar port is more protected and secures substitute form the Military point of the view. India also faces strong resistance in implementing her hegemonic designs due to Chinese presence. From a defense perspective, Pakistan's navy would find it easier to operate closer to the Gulf as Talat a defense analyst put it “During times of crisis, Pakistan could move its naval assets farther from any Indian air and naval threat. In the event of war, a port in Gwadar would provide strategic depth to Pakistan’s commercial and military vessels and be in a relatively advantageous position from which to operate against an Indian navy.”41

Gawadar port also provides Pakistan with long awaited strategic depth for the dispersal of its commercial as well as naval resources. Since Gawadar is an open port on both East and West sides. Therefore its blockade is not possible as opposed to Karachi. It also provides an opportunity to interfere with Indian SLOCs for quid pro quo response in the event of crisis. It also offers an alternative oil storage facility away from Karachi which was bombed during 1971 war.

China has invested heavily in Gawadar port, by design or by default, but it has given China an access both the Arabian Sea and the Indian Ocean. Since 80% of the world's energy exports to West and Fareast flow from strait of Hormuz thus creating an alarm in both Indian and US policy makers. Gwadar port will facilitate China to keep an eye on its oil imports from the Persian Gulf. Secondly Development of Gawadar petro city by the Chinese will diversify their Oil imports routes, in the case of any hostile interruption. It will also give them another safer alternative passage for its energy

40 Charles W. Kegley, JR and Eugene R. Wittkopf, Worlds Politics: Trends and Transformations 11th Ed. (New York: Bedford/St. Martin’s, 2011), 58.41 Lt. Gen. (R) Talat Masood, “Gwadar Deep Water Port Project: Implications for Pakistan and China,” International Assessment and Strategy Centre, September 22, 2004, http://www.strategycenter.net/ (accessed on 10th December 2011).

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imports from Central Asia.42 Chinese dominance in the Indian Ocean would further enhance their strategic strength and cooperation with major South Asian nations, particularly Bangladesh, Nepal, Pakistan, and Sri Lanka, which would prompt the Indians in turn to re-strengthen their Navy.43

World oil and gas demand is expected to increase in the future thus making new ‘Great Game’ in Central Asia more complex. This time it would not be on gaining physical or political control over the territories located in the centre of Russia and India. The new game revolves round the routes of gas and oil pipelines. These routes are important for transportation of oil and gas resources from Central Asia and the Caucasus to international markets.44 “Besides the Chief rivals, Russia and the USA, the regional players including Turkey, Iran, Afghanistan, Pakistan and India have their own agendas to promote in regard to the routes of the proposed oil and gas pipelines.”45

Despite heavy flow of funds in developing the Gawadar port it is still a desolated fishing town. The absence of proper infrastructure, lack of social development projects, limited economic opportunities and exposure to the relatively developed areas of Pakistan is a major cause of low poverty-stricken (55% below poverty line) and illiteracy rate(over 75%)46. Since the conception of this project the economic growth, non-availability of infrastructure and dearth of resources were the foremost considerations that hampered the construction of Gwadar. But in the present circumstances political instability in Baluchistan is a major cause of concern today.

Due to the non functionality of Gawadar port the Locals from Gawadar are leaving to other cities in search of livelihood. Baloch Political leadership has not been involved in the development of the province creating unrest and insecurity in the area. Although GOP has taken some positive measures in the recent past to resolve the burning issues. The most important among them was the National Finance Commission (NFC) Award. However the recommendations of Mushahid Hussain committee need to be implemented to address the demands of Baloch nationalist.

A local fear about elimination of their identity due to sudden demographic propulsions needs to address by the Government. A massive public relations effort by the government is needed to convince the people of Baluchistan that all the work on the project is not designed to usurp the rights of natives of Baluchistan. On the contrary it is they who will be the ultimate beneficiaries of the project.

42 Tarique Niazi, “Gwadar: China's Naval Outpost On The Indian Ocean”, China Brief, Volume:5 Issue: 4, December 31, 1969, http://www.jamestown.org/single43 Ibid.44 Jehanzeb, et.al, “Regional & International Interest in Oil & Gas Pipelines To Gwadar” The Dialogue Volume II, Number II, at http://www.qurtuba.edu.pk, (accessed on December 24, 2011).45 Ibid. 46 Syed Arif Hussaini, “Balochistan: Crisis & Conflict” Pakistan Link, January 28, 2005.

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SECTION IV

INTERESTS OF OTHER COUNTRIES

IndiaIndia’s growing economy demands uninterrupted flow of energy resources as well as direct access to new emerging economies of CARs. Though it has assisted Iran in developing Iran Chabahar port but it still lacks direct access to landlocked energy rich CARs. The only direct access is through Pakistan Wahgah border trespassing Afghanistan. Pakistan has formally granted access to Indian goods through its ports in 2010. However due to the long list of disputes between both countries the road access seems to be a far cry.47

Indian see Gawadar not as commercial port builds by Chinese rather then a naval base. Indian strategist thinks that it would finally turn into a nuclear submarine or aircraft carrier homeport. Some of the foreign writers believe that the Chinese presence in Gwadar would irritate India’s designs of hegemony in the Arabian Sea and promote Pakistan interest; feeding into these fears, “Indian naval chief Admiral Suresh Mehta48 said in January 2008 that the Gwadar port would empower Pakistan to control strategically important energy sea-lanes in the Persian Gulf.”49

4.1 Iran Iran is facing sanctions from the International community due to its nuclear programme. In order to have economic leverage as well as influence in South Asia Iran wants to export its oil and gas through Pakistan to India and China. Iran also wants to attract CARs imports and exports through its newly developed port. Iran has already connected Chabahar port through rail and road with Afghanistan ring road to connect itself with CARs. Iran is posing strict competition to Gawadar and would be taking business away as soon as its relations with the west are improved.

4.2 China The Chinese economy is growing at a rate of over 10% and it plan to double the same in future. China was self sufficient in oil production before 1993 but due to growing demand it now consuming fifty thousands barrels of oil per day. Keeping in view it domestic needs China’s energy security policy demands secure energy resources across the globe. Gawadar offers China to make it a transit terminal for oil imports

47 Rana Shahbaz “India finds route to Kabul via Pakistani seaports,” The Express Tribune, July 20, 2010.48 Abdus Sattar Ghazali “India Alarmed as Chinese Built Gwadar Port of Pakistan Becomes Operational,” Bangladesh Defence Journal, January 4, 2008, http://111.68.99.107/libmax/opac/ArticleDetail.aspx?id=19002, (accessed November 29, 2011).49 Syed Fazl-e-Haider, “Gwadar: An Emerging Centre of the New Great Game” ISPI Policy brief, No 192, October 2009.

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from the Middle East and the Gulf region which will enhance its energy security. Presently china’s bulk oil imports have to pass through Strait of Malacca which is a serious threat for its energy security. Two factors make it unattractive and compel china to strengthen their position in Indian Ocean and diversify their oil imports. Foremost is risk factor of US presence and second is long distant involved.50

4.2.1 Chinese string of Pearls Strategy This term was first used by the defence contractor Booz Allen Hamilton to describe the Chinese maritime strategy. “China’s growing interest and influence from South China Sea through the Indian Ocean and on to the Arabian Gulf has been described as a Strings of Pearls” 51 approach which can pose potential challenge to the Indian Ocean region. Apart from Gwadar, other pearls in China’s sea-lane strategy are port facilities in Maldives, Cambodia, Bangladesh, Thailand, Myanmar and the South China Sea.52

Chinese have never shown any desire or approach towards military superiority or confrontation in the region. Since Chinese oil imports come through the Indian Ocean therefore they consider it justified to secure the sea lanes for the uninterrupted supply of oil. Joint naval exercises, goodwill visits by its naval vessels and increased trade and commercial activity with Pakistan are likely to raise China's profile in the Arabian Sea.”53

According to several observers Beijing, aims to take benefit of Gwadar’s most easily reached historical silk trade itineraries to CARs and its western province Xinjiang. For this purpose China plan to lay East-West Railway from the Chinese border city of Kashi to Peshawar in Pakistan. “The same road and rail network could also be used to supply oil from the Persian Gulf to the western provinces of China. Additionally, China could gain rail and road access to Iran through Pakistan’s internal road and rail network.”54

4.3 CARSCaspian and Caucasus regions are full of energy resources. During the cold war the region remained under the influence of Russian domination. These countries are still dependent upon Russian pipelines for their export of hydrocarbons. Russian

50 Fair C. Christine, “Under the Shrinking U.S. Security Umbrella: India’s End Game in Afghanistan,” The Washington Quarterly, 34:2, 179-192, http://www.twq.com/11spring/docs/11spring_Fair.pdf, (accessed on December 6, 2011).51 Christopher J. Pehrson,” String of Pearls Meeting the Challenge of China’s Rising Power across the Asian Littoral,” Strategic Studies Institute US Army, July 2006, www.strategicstudiesinstitute.army.mil (accessed on December, 2011). 52 Cowasjee Ardeshir, “One in the String of pearls,” Dawn, Sep 11, 2005, Also see Christopher J. Pehrson,” String of Pearls Meeting the Challenge of China’s Rising Power across the Asian Littoral,”53 Christopher J. Pehrson,” String of Pearls Meeting the Challenge of China’s Rising Power across the Asian Littoral.” 54 Syed Fazl-e-Haider, “Gwadar: An Emerging Centre of the New Great Game.”

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companies buy the gas from CARs at relatively far lower prices and sell it to Europe at market prices denying actual benefits to the CARs. Since then it is trying to emancipate itself from Russian influence.

After the disintegration of Soviet Union there was a need to reconnect these CA countries including Afghanistan to the outside world economies through cost effective transportation routes in South West Asia.55 Pakistan’s geo-strategic position genuinely makes it uneconomical for Central Asia to overlook it. Iran only provides shortest access to Turkmenistan and Southern Uzbekistan through sea but for remaining countries it is through Afghanistan and Pakistan. Less Southern Uzbekistan and Turkmenistan Karachi is the nearest port city and by air Islamabad is nearer to Tashkent then it is to Karachi for all other CA countries.56 “Dushanbe is only an hour’s flight from Islamabad, and by road through Afghanistan the distance from Dushanbe to Karachi is 2,720 km. In contrast, the port of Bandar Abbas is 3,400 km, Vladivostok 9,500 km and Rostov on the Don 4,200 km away. This makes Pakistan important for the CARs.”57

4.4 AfghanistanAfghanistan is completely land locked state which had been in chaos for the last two decades. Economy of newly independent states of CA is dependent upon peace in Afghanistan. Peace in Afghanistan is linked with its security situation which can make it stable. Therefore viability of Gawadar port is unequivocally associated with stability in Afghanistan. It is important to understand that Afghanistan has the world’s largest deposits of copper and large deposits of high-grade iron ore 38. 58 Besides this, country also possesses vast resources of coal and precious stones. Harmony and permanence in Afghanistan would kick start a redoubtable trade bustle.

Gawadar port can best provide the out let for this trade activity. Gwadar port offers the shortest and easily accessible route to CA countries as compared to other routes running in the north through Georgia to Turkey’s Mediterranean coasts. The south route of the Gawadar would cost them only half the amount of other routes.59

4.5 United States

55 Aftab Kazi, “Pivotal Pakistan: GCAP and the Geopolinomics of Central Asia’s Traditional Indus Basin Corridor”56 Meena Singh Roy, “Pakistan's Strategies in Central Asia,” Volume:  30 Issue:  4 Strategic Affairs, October 2006, http://www.idsa.in/strategicanalysis/PakistansStrategiesinCentralAsia_msroy_1006, (accessed on December 12, 2011).57 Ibid.58 Jehanzeb “Regional & International Interest in Oil & Gas Pipelines to Gwadar,” 140.59 Ibid.

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It is very clear from the study of Indian Ocean that 80% of the world trade passes through it. Today the US is building up its influence and military presence in the Middle East despite a general draw-down in its military commitments and expenditure.60 On the other hand it is maintaining its presence from Tajikistan, Kazakhstan, Afghanistan, Qatar, Bahrain, Djibouti and Diego Garcia. This presence is only for one purpose that is energy security or Oil.

Now the latest strategy review unveiled by Obama administration as reported by David Alexander and Phil Stewart of Reuters News agency also focuses China “The shift in focus to Asia comes amid increasing concern at the Pentagon over China's strategic goals as it begins to field a new generation of weapons that could prevent U.S. naval and air forces from projecting power into the Far East.”61

Perhaps US has changed this strategy as they don’t want these supplies to be bogged down by new land power aggressor, and to prevent that land power's access to the seas - just as Mackinder argued had to be done and the British had carried out through the 19th Century.62 Therefore Gawadar stands out prominently in the US strategic policies especially in the presence of growing Chinese influence.

4.6 Pakistan As security situation in neighbouring Afghanistan is unlikely to improve in near future. It would hinder any trade and energy benefits emanating from CARs in near future. Therefore Pakistan is purposely keeping china’s interest in the TEC as it’s the only country providing multibillion supports for development of Infrastructure. It also enjoys connectivity with Pakistan through KKH. Pakistan is also trying to establish gas pipe line, rail and road network on priority with Iran to have access to Caucasus region by passing Afghanistan volatile security situation.

Lt. Gen. (R) Talat Masood also thinks that Islamabad considers China a strategic partner. Beijing also thinks that it is a productive affiliation. All Pakistani leaderships irrespective of their political brand have always tried to keep good relationship with a country which has the power to neutralize India. He goes to add that China has always acknowledged Pakistan’s significance in the regional context, its distinction among the Muslim world, and its value as a friend at global forums. “With the two countries enjoying such good relations, it is no surprise that Islamabad is very comfortable working closely with Beijing on the important Gwadar port project.”63

60 President Obama Speaks about Defense Strategic Review at Pentagon, January 5, 2012, US Department of Defense, http://www.defense.gov/, (accessed January 5, 2012).61 David Alexander and Phil Stewart, “New Pentagon defense strategy puts more focus on Asia” Reuters News Agency, January 5, 2012.62 Ronald Hee, “World Conquest: The Heartland Theory of Halford J. Mackinder.” 63 Lt. Gen. (R) Talat Masood, “Gwadar Deep Water Port Project: Implications for Pakistan and China.”

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SECTION V

NEIGHBOURING PORTS (DUBAI, SALALAH, CHARBAHAR AND BANDAR ABBAS) & COMPARISION

After the inauguration of Gawadar port many Pakistani leaders believe that an era of economic prosperity and boom in eminent. They base their belief on two things Transport Corridors and Access to Warm Waters. They consider Gawadar as an opening to Caucasus and Central Asia region. It is also widely held belief in Pakistan’s elite that good relations within the region bring enormous economic benefits. It would improve upon its security as well.64 Apart from Gawadar Iran also provides another gateway to Central Asia. It has developed good communication and infrastructure systems to connect itself Afghanistan and CARs. Yet another gateway is via Turkey in the southwest.65

5.1 Gawadar Port It is not possible for CARs to avoid Pakistan due to its geo-strategic location. Iran provides shortest access to warm waters to Turkmenistan and southern Uzbekistan, but for remaining three states, the shortest route is through Afghanistan and Pakistan.66 It is very interesting that for CA Karachi is the nearest port city and by air Tashkent is closer to Islamabad than later is to Karachi. It takes only an hour to Dushanbe from Islamabad. Road distance through Afghanistan from Dushanbe to Karachi is 2,720 km. Where as port of Bandar Abbas is 3,400 km, Vladivostok 9,500 km and Rostov on the Don 4,200 km away.67  Moreover Gawadar is close to main sea lanes as well as its long approach channel and deep waters make it important for CARs as well as large supertankers.

5.2 Bandar Abbas Port Chabahar PortThe Chabahar port has two main jetties, which can handle vessels of up to 25,000 ton (DWT) and draft of 10.50 meters. Chabahar enjoys the advantage of being just outside the Strait of Hormuz and port authorities are providing more concessions to make it successful regional transshipment port. The Bandar Abbas port possesses 24 berths including 2 oil berths. The approach channel of Bandar Abbas (Shahid Rajaee) port is 6.4 kilometers long and 13 meters deep. Only four berths are capable to handle vessels up to 100,000 DWT. The port is already connected by weekly container block trains to Tashkent (Uzbekistan) in Central Asia.

64 Meena Singh Roy, “Pakistan's Strategies in Central Asia,” Strategic Affairs, Volume:  30 Issue:  4 October 2006, http://www.idsa.in/strategicanalysis/PakistansStrategiesinCentralAsia_msroy_100665 Ibid.66 Ibid.67 Meena Singh Roy, “Pakistan's Strategies in Central Asia,”

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5.3 Salalah Port of OmanSalalah is a multi purpose port located at the mouth of Gulf of Oman on one side and Persian Gulf on the other, close to East-West shipping lanes. Salalah container terminal first began operating at Port Raysut in the Sultanate of Oman. It requires little diversion by line haul ships, allowing a quick pit stop to pick up and drop off containers for the Arabian Peninsula, Indian and Pakistani markets.68 Port’s current throughput is estimated at 3.5 million TEUs.69 The port can accommodate vessels up to 16m draft. Currently, the port is one of the very few ports in the world capable of handling the largest container vessels and is already equipped to handle the next generation of vessels yet to be built.70

5.4 Dubai Ports71

Dubai Ports Authority handles two major ports, Rashid and Jebel Ali. It ranks among the top ten in term of berthing and fifteen in terms of containers terminal. Dubai has handled about 12.6 million Twenty Foot Equivalent Unit (TEU) in 2011 and is expected to surpass 55 million TEU by 203072, about a quarter of which is transshipment traffic within the Gulf. The excellent port facilities are backed by equally excellent support facilities such road as network in the form of expressway, airport and airport’s cargo village. Time sensitive cargo can be transited from ship to aircraft within four hours of docking of vessel.

5.5 Comparison of Ports

While highlighting the significance of Gawadar and comparing it with Iranian Chabahar port Aftab Kazi writes. The planned Iranian port of Chabahar at the mouth of the Persian Gulf will not be directly competitive with Gwadar for two reasons.

“First, Chabahar scope will be limited since it is near the Strait of Hormuz and is constrained by the relatively shallow waters of the Persian Gulf. Second, regional commerce may grow to the point that existing port facilities may no longer be sufficient. Once the Greater Central Asia partnership (GCAP) proposed southern routes are developed, the construction of additional ports may be necessary, and these will likely be in Pakistan.”73

68 Salalah Port, http://www.salalahport.com, (accessed December 15,2011). 69 Ibid.70 Ibid.71 Dubai Ports Authority, http://www.dpworld.ae/ (accessed December 15, 2011).72 CPI Financial, “Dubai Ports expected to handle 55 million TEU of cargo annually by 2030” June 30, 2010, at http://www.gulfbase.com/, (accessed Jan 5, 2012). 73 Aftab Kazi, Pivotal “Pakistan: GCAP and the Geopolinomics of Central Asia’s Traditional Indus Basin Corridor.”

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International isolation of Iran hampers both its port operation.As regards to Dubai & Salalah ports; these are well established hub ports with excellent port facilities. But both are located on the wrong side of Persian Gulf in term of their utility for CARs. Their competition with attracting business or having utility for Afghanistan and CARs trade is zero. Port of Salalah is located at mouth of Indian Ocean on the Sea of Oman but it has no direct road or rail link which can connect it with CARs.

Another important factor which also makes these port second choices is disturbed Persian Gulf situation.74 Analysts say that Iran could potentially cause havoc in the Strait of Hormuz, 75 a strip of water separating Oman and Iran, which connects the biggest Gulf oil producers, including Saudi Arabia, with the Gulf of Oman and the Arabian Sea. At its narrowest point, it is 34 km across.76 Due to this uncertainty Gawadar is also better placed.

Moreover saturation & congestion in the Persian Gulf will provide opportunity for Gwadar port to attract a sizable share of the market and hence establish itself as a hub if fully equipped with the latest facilities and the modern gadgetries to entertain super tankers and heavy ships.

SECTION VI

CHALLENGES TO DEVELOPMENT

Gawadar port was inaugurated on February 2007. The port operations were contracted to PSA along with a concession agreement (CA) for forty 40 years. It was agreed that PSA would invest $ 500 million for the development of the port and GOP would link Gawadar port to rest of countries within three years of its inauguration. Instead of attracting any business PSA remained dependent on GOP for its business. It has been revealed by the Planning Commission Task force for Maritime Industry Security that only 72 ships carrying government cargo were diverted to Gwadar. Causing an additional amount to exchequer at the rate of Rs 2000 per ton and paying $ 300 million extra to PSA.

It was agreed that if 21 ships per weeks arrived the port then GOP would not provide any subsidy to PSA, which remains to be to distinct possibility in foreseeable future in the absence of connectivity with Afghanistan, Iran and CARs. Several projects had been planned for the provision of infrastructure, which included a 950 km railway and 900 km motorway to link with the railway and highway systems of the country.

74 Ramin Mostaghim and Paul Richter “Iran naval chief says closing gulf to oil traffic would be easy” Los Angeles Times, December 28, 2011.75 Iran`s English-language Press TV on 28th December 2011.76 “US Fleet says won`t allow Hormuz disruption,” Dawn December 29, 2011

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However, “The port is still not contributing its share towards economic development. This is because all these expected benefits remain in files and there is nothing on the ground so far in and around Gwadar to facilitate such activities,” Federation of Pakistan Chamber of Commerce & Industry (FPCCI) President, Sultan Ahmed Chawla said.77

The Planning Commission Task force report notes that the road and rail links to Gwadar Port, critical to boosting its economic activities, have not yet been developed.“Road connectivity will take four years, and rail connectivity around 10 to 15 years.” The special committee of Public Accounts Committee (PAC) also has expressed its resentment in August 2011 over Gwadar Port, which has been still nonfunctional in spite of completion and instructed government to take immediate measures to get started the port functions78.

750 km coastal road from Karachi to Jiwani near the Iranian border had been in operation for some time. But a 200 km branch road which would link the coastal road to the Indus Highway at Ratto-Dera was still not developed. Report of the FPCCI research team said “there were no internal roads, water, gas and communication services for the newly built township and industrial zone79. No significant progress has been made so far in respect to development of commercial and residential areas and buildings, and there are no labour related amenities for accommodating thousands of workers to be employed on a functional sea port.”80

Gwadar has become a desolated and deserted town today where outsiders are unwelcome. Since no technical educational facilities have been established therefore locals are unable to participate in the port operations. All those who had little education have left for other cities to earn decent living. The Baloch nationalists are opposed to any development in Gwadar because they say these mega projects will marginalise the local Baloch population.81 They also give example of Karachi where locals have been outnumbered due to mass migration. More so Balochistan's growth record is also a genuine reason for this alienation which has always been miserable. The basic quality of life indicators are terrible. On-tap drinking water is available to less than 5% of the population. The female literacy rate is under 15%.82

Resentment from the Baloch leaders like Hasil Bizinjo of the Balochistan National Party has also been expressed in Parliament, “on a point of order said that the Gwadar port had not yet become functional. He said the only road link to Gwadar is from Karachi, so importers prefer to use the Karachi port instead of Gwadar from where imported goods must come again to Karachi for upcountry transportation”. He said the Gwadar-Naudero Road remains incomplete and the port would only become

77 “Gwadar not working on commercial lines: FPCCI,” The News, September 30, 2009.

78 “PAC panel for fully functional Gwadar Port,” The Financial Daily International, August 17, 2011.

79 “Gwadar not working on commercial lines: FPCCI”, The News, September 30, 200980 Ibid.81Rina Saeed Khan “Gwadar: Pakistan's new Great Game”, Guardian UK, April 8, 2011, http://www.guardian.co.uk/commentisfree/2011/apr/08/gwadar-pakistan-great-game,(accessed December 3, 2011).82 Ibid.

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functional when it was directly linked through road and rail to other parts of the country.83

Planning Commission’s task force on maritime industry had proposed that an operational agreement with PSA be cancelled “The task force had observed that the PSA had undertaken to spend $525 million in five years, but nothing was spent during the last three years. No commercial vessel had arrived at Gwadar port during the same period.”84 Gwadar Port rail connectivity would take some 10-15 years to complete.85

Road and rail communication infrastructure in Afghanistan, if not addressed in a timely fashion could delay the effective communication processes in the region, compelling the donor agencies and countries to emphasize upon, at least temporarily, for some other immediately available alternative transit routes, most likely through the Karakorum than via Afghanistan.86

Another potential challenge in functionality of Gawadar port is inter port politics between Karachi port authority and Gwadar. Minister for the State Babur Ghori has been blamed by PSA in their plea to Supreme Court. This aspect needs urgent attention.

Prospects for becoming trade corridor are more hopeful then energy corridor in short and medium term due to prevailing political and security situation in the region. As Chinese energy and oil demand are concentrated in the east rather then western China. It will have to traverse 4500 km through oil pipe lines to reach western china. Cost of laying pipelines is very heavy i.e. approximately $ 10 billion. Chinese are also looking to construct more cost effective pipeline through Myanmar, Russia and Kazakhstan.

RECOMMENDATIONS

The present roads and highways which connect border town of Chamman and Torkham to Afghanistan provide shortest rail links to CA. If Gawadar potentials as a main economic and trade hub have to be materialized then these routs will have to be developed up to international standards.87

83 Asim Awan, Part-functional Gwadar port provokes Senate walkout, the express tribune, May 5,

201084 Reuters, “Taking charge: China ready to operate Gwadar port Published,” The Express Tribune, May 22, 2011.85 “Gwadar Port Deal with PSA” Daily Times, January 03, 2010.86 Aftab Kazi, Pivotal “Pakistan: GCAP and the Geopolinomics of Central Asia’s Traditional Indus Basin Corridor.”

87 Lt. Gen. (R) Talat Masood, “Gwadar Deep Water Port Project: Implications for Pakistan and China.”

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Keeping in view the volatile security situation in Afghanistan Central Asian states should be pursed to trade through Karakorum via the under construction rail and road communication infrastructure through Western China till the situation is improved.

The transit routes will create interdependency between all the regional countries. It will evolve a relation of mutual dependence of bilateral interests –geopolitical, economic, security and strategic- between Pakistan, Afghanistan and CARs. Which would then be further enhanced to China and India as well.88 Therefore in order to fully utilize the potential of Gawadar port Iran should be allowed to use KKH for trade with China so as to have access to Uzbekistan through Iran for Pakistani products.

PSA authority was reluctant to invest or attract any business due to the failure of development of promised communication network of rail and road i.e. especially the road linking Khuzdar to Rato-Daero and Coastal highway connecting Iran. It is surprising that GOP is artificially generating business instead of developing road network. The appeasement to foreign investors at the cost of public exchequer is not understood.

Local tribes at the Gawadar port must be taken into confidence. Their concerns should be addressed seriously. Measure to address the expected population propulsion should be resolved with the locals. Locals should be made party into the revenues earned by Gawadar port on the line of Chamalang coal agreement by the Army.89

The definition of successful hub port requires meeting the demands of shipping lines. These demands comprises of concessions to global operators, lower port tariffs, quality services, accommodation of super large ships and consolidated port operations.90 Gawadar port will have to meet these demands to attract business. Gawadar port authority has to establish logistic cluster supporting value-added logistics activities, it should not have any red tapes culture and burdensome paper works.

It is of paramount importance that information technology intermodal infrastructures- access to rail, air and road distribution networks are developed.

Local industry has to be developed to produce freight volume for the exports.

88 Aftab Kazi, Pivotal “Pakistan: GCAP and the Geopolinomics of Central Asia’s Traditional Indus Basin Corridor.” 89 The Chamalang coal reserves were first discovered in 1885 during British rule. In spite of prosperity a bloody war started between the Pashtoon Luni and Marri tribes. Finally Pakistan Army intervened in 2007 after lot of efforts and deliberations Army was able bring to table the tribes. Each tribe is given its due share. This was a journey of sacrifices, jawans and officers of Pakistan Army lost their limbs, their lives but were determined to bring these people out of darkness. ISPR Video: Chamalang Coal Reserves, Luni & Marri Tribes and Pakistan Army. 90 The Port Industry at www.unescap.org/ttdw/Publications/TFS.../pub.../pub_2377_ch3.pdf (accessed December 9, 2011).

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The port would not be workable for transshipment or transit until the law and order situation in Balochistan & Afghanistan improved and China was connected via road and rail links with Gwadar.91

CONCLUSION

It has been amply clear from the study that Gawadar location makes it very attractive to become a hub port feeding neighbouring ports in the region. Gawadar port has also provided Pakistan with the opportunity to have long awaited strategic depth for its naval as well as commercial interest. It is most favored terminus point for Afghanistan and CARs for their trade and energy export. It has the potential to attract huge foreign direct investment. However political stability in Balochistan in particular and Afghanistan is a precondition for the viability of Gawadar port.

In the modern time economics has gain more importance then military power. Economic strengths is achieved through trade and most of the trade today is carried out through the Seas. Countries with long coastal belt and sea ports influence the trade activities at Global level. Therefore there is a serious competition between ports in attracting shipping alliances and major shipping lines. “Ports are losing their bargaining power and have been forced to provide deep water, quality services, productivity, efficiencies, and infrastructures including rails and roads, all of which are frequently demanded by shipping lines with bargaining power created by great amounts of container volume.”92 In case of Gawadar, no commercial ship has yet arrived due to the reason that it has fails to reach at the level of shipping lines.

Secondly in the absence of crucial road and rail links the business activity can’t be generated. Artificial efforts by diverting cargo are not the solution. Unfortunately since the inauguration in 2007 till today no serious approach has been taken by the political leaders. There is no likely hood of any future prospects from present Zardari government either. Therefore port has lost substantial amount of prospective business.

It will take another 8-10 years of uninterrupted development program before the real benefits of this project can be realised.

Appendix 1

THE GWADAR MASTER PLAN

91 “Planning Commission Urges Pakistani Govt to Scrap Gwadar Port Deal With PSA” The International States Man, January 3, 2010, http://www.thestatesmen.net/news/, (accessed 5 January 2012).92 The Port Industry at www.unescap.org/ttdw/Publications/TFS.../pub.../pub_2377_ch3.pdf (accessed December 9, 2011).

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The Gwadar Master Plan envisages establishment of Free Trade Zones, general

industrial areas, oil, gas and petrochemical development and new residential areas.

Gwadar Master Plan proposes development of port over an area of about 18,600

hectares of land. This is distributed as under:-

The port area of 400 hectares.

Export processing zone 74 hectares in East Bay.

Special Industrial Zone 4000 hectares on the north of the town.

Oil refinery of 1000 hectares on the north east of the town.

Residential area of over 400 hectares.

Source www.gwadarport.gov.pk/LatestNews.asp

Appendix 2Phases I & II of Gwadar Port

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Source www.gwadarport.gov.pk/LatestNews.asp

ROAD LINKS

Mekran Coastal Highway Completed

Karachi – Gwadar – Jiwani – Gabd

Gwadar – Ratodero Express Highway yet to be completed

Gwadar – Turbat – Khuzdar – Shahdadkot –Ratodero

Gwadar – Quetta Bypass Completed Gwadar – Turbat – Punjgur – Kharan – Nushki – Quetta

Gwadar Town – Gwadar Port bypass yet to be completed

3. Railway

Gwadar – Panjgur – Dalbadin under Construction

Gwadar – Punjgur – Dalbadin – Quetta/Chairman

Appendix 3

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Proposed Road Networks

Source www.nha.gov.pk/

Appendix 4

CHINA STRING OF PEARL STRATEGY

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Source; Christopher J. Pehrson,” String of Pearls Meeting the Challenge of China’s Rising Power across the Asian Littoral,” July 2006, www.strategicstudiesinstitute.army.mil

Appendix 1

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