Strategic location of Gwadar, and possible oil lines through the region
The Gwadar deep-sea port emerges as a place of great strategic value, enhancing Pakistan's importance in the whole region, extending from the Persian Gulf through the Indian Ocean to Southeast Asia and the Far East.
Gwadar is located on the southwestern coast of Pakistan, close to the important Straits of Hormuz, through which more than 13 million bpd of oil passes. It is strategically located between three increasingly important regions of the world: the oil-rich Middle East, heavily populated South Asia and the economically emerging and resource-rich Central Asia.
The construction of the Gwadar deep-sea port is just one component of a larger development plan which includes building a network of roads connecting Gwadar with the rest of Pakistan, such as the 650 km Coastal Highway to Karachi and the Gwadar-Turbat road (188 km). This network of roads connects with China through the Indus Highway. Pakistan, China, Kazakhistan, Kyrgizstan and Uzbekistan are developing extensive road and rail links from Central Asia and the Chinese province of Xinjiang to the Arabian Sea coast.
The Pakistani Government has initiated several projects, with majority financial and technical assistance from China, to develop Gwadar's strategic location as a goods transit and trade point. The primary project is the construction of a deep-sea port at Gwadar to enable high-volume cargo movement to and from the landlocked Central Asian states. The new port will also encompass conversion facilities to allow for the movement of natural gas as a part of plans for a termination point for the Turkmenistan-Afghanistan-Pakistan natural gas pipeline. The secondary project is a coastal highway connecting Gwadar to Karachi, whose $200 million cost will be completely financed by the Chinese. Gwadar will serve as a port of entry for oil and gas to be transported by land to the western regions of China.
The project's fate is tied to the decentralization of government in Pakistan. If an agreement is brokered with the Baluch, the Pakistani military will gain a strategic depth southwest from its naval base in Karachi that has long been vulnerable to blockade by the Indian Navy. China is going to be the beneficiary of Gwadar's most accessible international trade routes to the Central Asian republics and Xinjiang. By extending its East-West Railway from the Chinese border city of Kashi to Peshawar in Pakistan's northwest, Beijing can receive cargo to and from Gwadar along the shortest route, from Karachi to Peshawar. The rail network could also be used to supply oil from the Persian Gulf to Xinjiang. Pakistan's internal rail network can also provide China with rail access to Iran. Rail access will however be hampered somewhat by differences in gauge: China and Iran - 1435 mm; Pakistan - 1676 mm; Central Asia - 1524 mm.
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Oman has offered $100 million aid for the development of social and infrastructure facilities in Balochistan. Out of $100 million, Oman has provided $7 million for extending of runway at Gwadar Airport, construction of jetties, upgradation of Gwadar Hospital, provision of 100 engines to fishermen and construction of power house. Oman is also financing construction of Gwadar-Hoshab Road, water supply scheme in Gwadar area and construction of irrigation dams.
Pakistan and Oman have signed a number of agreements including Avoidance of Double Taxation, Promotion and Protection of Investment, Cultural, Technical and Educational Cooperation, Agreement on cooperation between Oman Chamber of Commerce and Industry and FPCCI, Maritime Boundary Agreement and Agreement to establish Pak-Oman Joint Investment Company.
Around 70,000 Pakistani citizens work in Oman.
Pakistan through networking of roads is linking Gwadar with Karachi and the north to enable the Central Asian States to use Gwadar as a port for their trade. Water supply is being improved, seven jetties are being constructed and local fishermen are being given motor engine run boats. The local hospital is also being upgraded.
A number of electric power generation projects are also being carried out in Gwadar and in its surroundings. The Quetta Electric Supply Company (QESCO), a subsidiary of the Wapda, has geared up the work for building the power transmission line. It is expected to be completed soon. Recently Iran is providing 300 MW of electricity to Makran Area.
Gwadar has a big airport for commercial aircrafts. There is a need for the expansion of the airport and enlargement of its runway to facilitate the landing of wide body aero-planes. CAA has been directed to upgrade the Gwadar Airport for the landing of jet planes by the end of 2004. Gwadar port will be open air and after its inauguration the jet planes shall be landing at the Gwadar airport. A sum of 2.3 million dollars is being utilized from Omani grant. The Pakistan government and the Civil Aviation Authority are also contributing additional Rs563.35 million for this purpose.
A dry port in the Sino-Pakistani border town of Sust, 200 km north of Gilgit, was constructed in 2004 at a cost of Rs 90 million. Soon, President Musharraf announced that the state of the art facility would be linked to Gwadar via the Karakoram Highway. According to the president, this provides parts of China with the shortest access to Pakistani deep sea ports, and the Middle East
Rice Exporters Association of Pakistan (REAP)-apex body of the rice exporters in the country- has decided to establish a rice zone in Gwadar to fetch the opportunities in the area after the construction of new port. The establishment of warehouses will provide extraordinary facilities to rice exporters especially for those who export rice to Iran as the Iranian border is only at a distance of three hours from Gwadar.
rs and other plants have been installed in addition to a 50 MW power-house. 33 km railway line from Taftan to Saindak has also been laid. The Chinese company MRDL has so far invested $25 million (Rs 1.5 billion) on the project.
Trans-Afghan Gas Pipeline
The 1400 km Trans-Afghan Gas Pipeline (TAP) from Turkemenistan to Gwadar(Pakistan), a long-dormant project that would pump Turkmen natural gas to markets in South Asia, may finally be poised to begin at a cost of $3 billion. The Government has announced that a massive defense facility will be constructed in the city in order to guarantee the security of the area. The Government has also announced that a new shipbuilding centre will be built at Gwadar, with an as-yet unspecified international partner.
Port of Singapore was scheduled to take over management of Gwadar Port by the end of January 2007. Port of Singapore was the highest bidder for the Gwadar port after DP World backed out of the bidding process. Originally, 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 deep sea 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.
The first ship anchored in the Gwadar port on March 15, 2008. The first ship was a Canadian ship carrying wheat. It was the largest ship to anchor in Pakistan.