Gwadar Port

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Gwadar Port

Location

Location Gwadar, Balochistan,
 Pakistan

25.1105°N 62.3396°ECoordinates: 
Coordinates
25.1105°N 62.3396°E

UN/LOCODE PK GWD[1]

Details

Built Phase I: (2002-2006) 12.5 meters (41 feet)

max draft (hull) of channels

Phase II: (2007–2029) 20.5 m (67 ft) max draft of

channels

Phase III: (2030–2045) 24.5 m (80 ft) max draft of

channels

Operated by  Maritime Secretary of Pakistan

 China Overseas Port Holding Company

(2016-present)

Size 2,292 Acre Free Trade Area

Available berths Current: 23 in 2021

Phase I: 3 by 2006

 Phase II: 75 by 2029

Phase III: 150 by 2045

Type of ships Phase I (Current): Bulk carriers of

30,000 Deadweight tonnage (DWT), and

container Panamax vessels of 52,000 (DWT)

Phase II (Proposed): 200,000

(DWT) Neopanamax vessels

Phase III (Proposed): 400,000+

(DWT) Chinamax (Valemax) vessels, and TI-class

supertanker

Rail lines Khunjerab Railway (Proposed)

Rail gauge 5 ft 6 in gauge railway (1676 mm) (Proposed)

Truck types Tank truck

Karakoram Highway (OBOR) (CPEC)

Statistics

Annual TEU Current (2018): Total capacity of 30 million

(tonnes) of cargo per year

Phase I: 11 million (tonnes) of cargo per year

Phase II: 200 million (tonnes) of cargo per year

Phase III: 400 million (tonnes) of cargo per year

Website

gwadarport.gov.pk

The Gwadar City Port CPEC(Urdu: ‫گوادر بندرگاہ‬ ); IPA: gʷɑːd̪əɾ bənd̪əɾgɑː) or Gwadar

Port Authority (Urdu: ,‫مقتدرہ گوادر بندرگاہ‬ ) situated on the Arabian
Sea at Gwadar in Balochistan province of Pakistan and is under the administrative
control of the Maritime Secretary of Pakistan and operational control of the China
Overseas Port Holding Company.[2] The port features prominently in the China–Pakistan
Economic Corridor (CPEC) plan, and is considered to be a link between the Belt and
Road Initiative and the Maritime Silk Road projects.[3] It is about 120 kilometres (75 mi)
southwest of Turbat, and 170 kilometres (110 mi) to the east of Chabahar Port (Sistan
and Balochistan Province in Iran).[4]
Gwadar's potential to be a deep water sea port was first noted in 1954, while the city
was still under Omani sovereignty.[5] Plans for construction of the port were not realised
until 2007, when the port was inaugurated by Pervez Musharraf after four years of
construction, at a cost of $248 million.[6]
 In 2015, it was announced that the city and port would be further developed under
CPEC at a cost of $1.62 billion,[7] with the aim of linking northern Pakistan and western
China to the deep water seaport.[8] The port will also be the site of a floating liquefied
natural gas facility that will be built as part of the larger $2.5 billion Gwadar-Nawabshah
segment of the Iran–Pakistan gas pipeline project.[9] Construction began in June 2016 on
the Gwadar Special Economic Zone, which is being built on 2,292-acre site adjacent to
Gwadar's port.[10] In late 2015, the port was officially leased to China for 43 years, until
2059.[11]
Gwadar Port became formally operational on 14 November 2016, when it was
inaugurated by Pakistan's Prime Minister Muhammad Nawaz Sharif; the first convoy
was seen off by the then Pakistan's Chief of Army Staff, General Raheel Sharif.[12] On 14
January 2020, Pakistan operationalized Gwadar Port for Afghan transit trade. [13] On 31
May 2021 Gwadar Port become fully Operational, along with the availability of online
booking for the delivery of goods.[14]

Contents
 1Location
 2Background
 3Construction
o 3.1Phase I (2002–2006)
o 3.2Phase II
o 3.3Longer term plans
 4Expansion under CPEC
o 4.1Financing
 5Gwadar Special Economic Zone
 6Operations
o 6.1Port of Singapore Authority (2007–2013)
o 6.2China Overseas Port Holding Company (2013–present)
 7Geopolitical impact
o 7.1Gwadar Port as a means to circumvent the Straits of Malacca
o 7.2Improved access to western China
o 7.3A new transit hub for the Central Asian Republics
o 7.4Comparison to Chabahar Port projects
 7.4.1Indian financial commitments in Chabahar
 7.4.2Chinese financial commitments in Gwadar
 7.4.3Iranian and Pakistani responses to Chabahar development plans
 8Future environmental impact
 9Numismatics
 10See also
 11Notes
 12References
 13External links

Location[edit]
 Gwadar Port is located in southwestern Pakistan near the Iranian border.

Gwadar Port is situated on the shores of the Arabian Sea in the city of Gwadar, located
in the Pakistani province of Balochistan. The port is located 533 km from Pakistan's
largest city, Karachi, and is approximately 120 km from the Iranian border. It is located
380 km (240 mi) away from Oman, and near key oil shipping lanes from the Persian
Gulf. The greater surrounding region is home to around two-thirds of the world's
proven oil reserves. It is also the nearest warm-water seaport to the landlocked, but
hydrocarbon rich, Central Asian Republics, as well as Afghanistan.[15]
The port is situated on a rocky outcropping in the Arabian sea that forms part of a
natural hammerhead-shaped peninsula protruding out from the Pakistani coastline.
[16]
 The peninsula, known as the Gwadar Promentory, consists of rocky outcropping
reaching an altitude of 560 feet with a width of 2.5 miles that are connected to the
Pakistani shore by a narrow and sandy 12 kilometre long isthmus.[17] The isthmus
separates the shallow Padi Zirr bay to the west, from the deep water Demi Zirr harbour
in the east.

Background[edit]
 Gwadar near the Iran–Pakistan border

Pakistan identified Gwadar as a port site as far back as 1954 when Gwadar was still
under Omani rule.[18] Pakistan's interest in Gwadar started when, in 1954, it engaged
the United States Geological Survey (USGS) to conduct a survey of its coastline. The
USGS deputed the surveyor, Worth Condrick, for the survey, who identified Gwadar as
a suitable site for a seaport.[18] After four years of negotiations, Pakistan purchased the
Gwadar enclave from Oman for free as friendly gift on 8 September 1958 same as Khan
of Khalat has gifted it to Omani Prince and Gwadar officially became part of Pakistan on
8 December 1958 back, after many years of Omani rule. [18]

Map including Gwadar (SoP, 1965)

A small wharf at Gwadar was completed in 1992, and formal proposals for a deep sea
port at Gwadar were unveiled a year later in 1993. [19] The federal government approved
the construction of the port in December 1995 but the project could not get started
because of shortage of funds. In 1997, a government-appointed task force identified
Gwadar as one of the focus area of development, but the project did not launch due to
economic sanctions imposed against Pakistan following its nuclear tests in May 1998.
[18]
 Construction on Phase 1 of the project began in 2002 after the agreement for its
construction was signed during the state visit of Chinese Premier Zhu Rongji in 2001.
[20]
 After completion of Phase 1 in 2007, the first commercial cargo vessel to dock at the
port was the "Pos Glory," with 70,000 Metric Tonnes of Wheat on 15 March 2008. [21]
The port is part of the 21st Century Maritime Silk Road that runs from the Chinese coast
through the Strait of Malacca, to Mombasa, from there via the Suez Canal to the
Mediterranean, there to the Upper Adriatic region with its rail connections to Central
Europe and the North Sea.[22][23][24][25]

Construction[edit]
Gwadar Port is being developed in two phases: Phase I covered building of three
multipurpose berths and related port infrastructure and port handling equipment, and
was completed in December 2006, but inaugurated on 20 March 2007. [26]
Phase I (2002–2006)[edit]
The first phase of construction at Gwadar Port began in 2002, and was completed in
2006, before inauguration in 2007. [27]
 Berths: 3 Multipurpose Berths
 Length of Berths: 602 m in total
 Approach Channel: 4.5 km long dredged to 12.5 m depth and max draft (hull) of
channel.(capacity: bulk carriers of 30,000 deadweight tonnage [DWT] and container
vessels of 25,000 DWT)[28]
 Turning basin: 450 m diameter
 Service Berth: One 100 m Service Berth
 Related port infrastructure and handling equipment, pilot boats, tugs, survey
vessels, etc.
 Built at a cost of $248 million.[6]
Phase II[edit]

A 6-lane highway built, as a part of CPEC project, along Gwadar coastline

The second phase of construction is currently underway as part of planned

improvements under CPEC and other ancillary projects. The total project is expected to
cost $1.02 billion.[29] In Sep 2018, the Pakistan Senate expressed concern at slow rate of
progress of most projects of Phase II at Gwadar as construction had not started for
most projects.[30]
Ongoing:
 Approach Channel: To be dredged to 14.5 m depth and max draft (hull) of
channel
 6 lane East Bay Expressway to connect the port to the Makran Coastal Highway
 New international airport to be built in vicinity of the port
 Desalination plant
 300 megawatt coal-fired power plant
Planned:
 4 Container Berths along 3.2 kilometres of shoreline
 1 Bulk Cargo Terminal (capacity: 100,000 DWT ships)
 1 Grain Terminal
 1 Ro-Ro Terminal
 2 oil terminals (capacity: 200,000 DWT ships each)
 Floating liquefied natural gas terminal with capacity of 500 million cubic feet of
gas per day
 2,292-acre special economic zone to be developed adjacent to port
Longer term plans[edit]
 Dredging of approach channel to depth of 20 meters
 100 berths to be built by 2045[28]
 Capacity to handle 400 million tons of cargo per year

Expansion under CPEC[edit]

The Western Alignment of CPEC is depicted by the red line. The 1,153 kilometre route will link the M1
Motorway near Islamabad with Gwadar Port. The Western Alignment will also connect to the Karakoram
Highway, which is being rebuilt and overhauled as part of CPEC to provide improved access to Gilgit
Baltistan and the Chinese region of Xinjiang.

Under the China-Pakistan Economic Corridor plan, the state-owned China Overseas

Port Holding Company (COPHC) will expand Gwadar Port with construction of nine new
multipurpose berths on 3.2 kilometres of seafront to the east of the existing
multipurpose berths.[31] COPHC will also build cargo terminals in the 12 kilometres of
land to the north and northwest of the site along the shoreline of the Demi Zirr bay. [31]
In total, COPHC has awarded $1.02 billion worth of contracts for expansion of the port.
[29]
 In addition to construction of nine berths and cargo terminals, plans for expanded port
infrastructure also include several projects that will be financed by loans extended by
Chinese state owned banks. The Gwadar Port dredging project will deepen approach
channels to a depth of 14 meters from the current 11.5-meter depth, at a cost of
$27 million.[32] Dredging will enable docking of larger ships with a deadweight tonnage of
up to 70,000 at Gwadar Port,[8] while current capacity permits a maximum 20,000 DWT.
[33]
 Future plans call for dredging of the harbour to a depth of 20 meters to allow for
docking of larger vessels.[34] Also included as part of the CPEC infrastructure
development package for port infrastructure is a $130 million breakwater around the
port.[35]
Ancillary infrastructure projects for the port will also be built as part of CPEC. A
$114 million desalination plant will be developed to provide potable water to the city,
while the Government of Pakistan will also contribute $35 million towards infrastructure
projects in the Gwadar Special Economic Zone.[36][37] A 19 kilometre-long dual
carriageway known as the Gwadar East Bay Expressway will also be built at a cost of
$140 million to connect Gwadar Port to the existing Makran Coastal Highway and the
planned $230 million Gwadar International Airport.[38]
A floating liquefied natural gas facility that will have a capacity of 500 million cubic feet
of liquified natural gas per day will also be built at the port as part of the $2.5 billion
Gwadar-Nawabshah segment of the Iran–Pakistan gas pipeline,[9] which is being built as
a joint venture between Pakistan's Inter State Gas System, and the China National
Petroleum Corporation.[39] The Pakistani government also intends to establish a training
institute named Pak-China Technical and Vocational Institute at Gwadar which is to be
completed at the cost of 943 million rupees to impart skills to local residents to train
them to operate machinery at the port.[40]
It was expected that by 2017, the port will handle over one million tons of cargo, [41] most
of which will consist of construction materials for other CPEC projects. [42] However, the
project has faced multiple challenges. The Pakistan government has curbed expansion
of mega project due to mounting debt on country's exchequer. The Covid19 pandemic
has further impacted the work on the project.[43] COPHC plans to eventually expand the
port's capacity to 400 million tons of cargo per year. [44] Long terms plans for Gwadar Port
call for a total of 100 berths to be built by 2045. [45]
In Sep 2018 the Ministry of Maritime of Pakistan submitted a report in Senate that
during the last five years, 99 ships loaded with cargo from seven different countries
anchored at Gwadar Port. The weight of shipments was 1.439 million tons. [46]
Financing[edit]
The government of China in August 2015 announced that the previously announced
concessionary loans for several projects in Gwadar totalling $757 million would be
converted 0% interest loans for which Pakistan will only be required to repay
the principal value.[35] The projects which are now to financed by the 0% interest loans
include: the construction of the $140 million East Bay Expressway project, installation
of breakwaters in Gwadar which will cost $130 million, a $360 million coal power plant in
Gwadar, a $27 million project to dredge berths in Gwadar harbour, and a $100 million
300-bed hospital in Gwadar.[35]
In September 2015, the government of China also announced that the $230 million
Gwadar International Airport project would no longer be financed by loans, but would
instead be constructed by grants which the government of Pakistan will not be required
to repay.[47]

Gwadar Special Economic Zone[edit]

Physical model of Phase-I of proposed Gwadar Special Economic Zone

The expanded port will be located near a 2,282-acre free trade area in Gwadar which is
being modelled on the lines of the Special Economic Zones of China.[48] The swathe of
land was handed to the China Overseas Port Holding Company in November 2015 as
part of a 43-year lease,[49] while construction of the project began on 20 June 2016.
[50]
 The special economic zone is expected to employ approximately 40,000 people,
[51]
 with possibility for future expansion.[52]
The special economic zone will include manufacturing zones, logistics hubs,
warehouses, and display centres.[53] Business established in the special economic zone
will be exempt from Pakistani income, sales, and federal excise taxes for 23 years.
[54]
 Contractors and subcontractors associated with China Overseas Port Holding
Company will be exempt from such taxes for 20 years, [55] while a 40-year tax holiday will
be granted for imports of equipment, materials, plants, machinery, appliances and
accessories that are to be for construction of Gwadar Port and special economic zone. [56]
The special economic zone will be completed in three phases. By 2025, it is envisaged
that manufacturing and processing industries will be developed, while further expansion
of the zone is intended to be complete by 2030.[40] On 10 April 2016, talking to The
Washington Post, Zhang Baozhong, chairman of China Overseas Port Holding
Company said that his company could spend a total of $4.5 billion on roads, power,
hotels and other infrastructure for the industrial zone, which he said would be open to
non-Chinese companies. The company also plans to build an international airport and
power plant for Gwadar.[57]
Saudi Arabia has promised to build US$10 billion oil refinery at Gwadar Port in 2019. [58][59]

Operations[edit]

Urea is being unloaded from a ship at Gwadar Port for transit to Afghanistan

Gwadar Port is owned by the government-owned Gwadar Port Authority [60] and operated
by China Overseas Port Holding Company (COPHC), a state-run Chinese firm. [61] Prior
to COPHC, the port was operated by the Port of Singapore Authority.
Port of Singapore Authority (2007–2013)[edit]
Following the completion of Phase I, the Government of Pakistan in February 2007
signed a 40-year agreement with PSA International for development and operation of
the port, and an adjacent 584-acre special economic zone. [62] PSA International was the
highest bidder for the Gwadar Port, after its competitor DP World withdrew from the
bidding process.[63] PSA was granted a wide range of tax concessions, including
exemption from corporate tax for 20 years, land for a special economic zone, duty-free
imports of materials and equipment for construction and operations of the port, and
duty-free shipping and bunker oil for 40 years. In addition to these incentives, the
provincial government of Balochistan was also asked to exempt PSA International from
the levy of provincial and district taxes. According to the agreement with PSA, the
Government of Pakistan was to get a fixed 9% share of the revenue from cargo and
maritime services, in addition to 15% of revenues earned from the adjacent special
economic zone.
In September 2011, The Wall Street Journal reported that Gwadar was being
underused as commercial port, and that Pakistan had asked the Chinese government to
assume operations of the port.[64] PSA also reportedly sought to withdraw from its
contract with the Pakistani Government, and expressed willingness to sell its share in
the project to a Chinese firm after the Pakistani Navy failed to transfer land required for
development of the planned 584-acre free trade zone. [62] PSA also did not invest the
agreed $550 million into the port, on account of the poor security situation in
Balochistan in the period between 2007 and 2013. [62] The government of Pakistan also
failed to invest in requisite infrastructure works.[65] The Supreme Court of Pakistan further
issued a stay order against the allotment of land to PSA on account of a public petition.
[62]
China Overseas Port Holding Company (2013–present)[edit]
On 18 February 2013, Pakistan awarded a contract for construction and operation of
Gwadar Port to a Chinese state-owned enterprise. As per details of the contract, the
port would remain as property of Pakistan, but would be operated by the state-run
Chinese firm – China Overseas Port Holding Company (COPHC). [66] The contract
signing ceremony was held on 18 February 2013 in Islamabad, and was attended by
Pakistani President Asif Ali Zardari, Chinese Ambassador Liu Jian, as well as various
federal ministers and members of parliament, as well as senior government officials.
[66]
 The ceremony was also marked the transfer of the concession agreement from the
PSA to the COPHC.[66]
As per this agreement, 91% of the revenue generated by Gwadar Port will go to
COPHC and 9% to Gwadar Port Authority. [67] In March 2019, the Pakistani Senate was
informed that during last three years, total gross revenue of Rs 358.151 million had
been generated from Gwadar Port, out of which the share going to Gwadar Port
Authority was Rs 32.324 million.[68]

Geopolitical impact[edit]
Gwadar Port as a means to circumvent the Straits of Malacca[edit]
The Straits of Malacca provide China with its shortest maritime access to Europe,
Africa, and the Middle East.[69] Approximately 80% of its Middle Eastern and African
energy imports also pass through the Straits of Malacca. [70] As the world's biggest oil
importer,[71] energy security is a key concern for China while current sea routes used to
import Middle Eastern and African oil are frequently patrolled by the United States Navy.
[72]
 The sea-route via the Straits of Malacca is roughly 12,000 kilometres (7,500 mi), while
the distance from Gwadar Port to Xinjiang province is approximately 3,000 kilometres
(1,900 mi), and another 3,500 kilometres (2,200 mi) from Xinjiang to China's eastern
coast.[70] However, the cost of moving oil overland is far greater. An oil pipeline from
Gwadar to China's population centers (not yet built), will cost up to $8/barrel, while the
cost of shipping oil from the Persian Gulf to China is $2–3/barrel. [73]
In the event that China were to face hostile actions from a state or non-state actor,
energy imports through the Straits of Malacca could be halted, which in turn would
paralyse the Chinese economy in a scenario that is frequently referred to as the
"Malacca Dilemma".[70] In addition to vulnerabilities it faces in the Straits of Malacca
region, China is heavily dependent upon sea-routes that pass through the South China
Sea, near the disputed Spratly Islands and Paracel Islands, which are currently a
source of tension between China, Taiwan, Vietnam, the Philippines, and the United
States.[74][note 1] The CPEC project will allow Chinese energy imports to circumvent these
contentious areas.[75] The Sino-Myanmar pipelines have also been constructed by China
to address this so-called "Malacca Dilemma".[76]
In addition to China's potential weaknesses against the U.S. Navy, potential
vulnerabilities could stem from a decline in China–India relations. The Indian Navy has
recently increased maritime surveillance of the Straits of Malacca region from its base
on Great Nicobar Island.[77] India has expressed fears of a Chinese "String of
Pearls" encircling it.[78][79] Were conflict to erupt, India could potentially impede Chinese
imports through the straits.[80] Indian maritime surveillance in the Andaman Sea could
possibly enhance Chinese interest in Pakistan's Gwadar Port. The Kyaukpyu Port,
which is currently being developed in Myanmar by the Chinese government as another
alternate route around the Straits of Malacca, will likely be vulnerable to similar
advances by the Indian Navy. The proposed Bangladesh-China-India-Myanmar
Corridor (BCIM) would also be vulnerable to Indian advances against China in the event
of conflict, thereby potentially limiting the BCIM Corridor's usefulness to China's energy
security, and thereby increasing Chinese interest in CPEC.
China's stake in Gwadar will also allow it to expand its influence in the Indian Ocean, a vital route for oil transportation between
the Atlantic and the Pacific. Another advantage to China is that it will be able to bypass the Strait of Malacca. As of now, 60
percent of China's imported oil comes from the Middle East, and 80 percent of that is transported to China through this strait, the
dangerous, piracy-rife maritime route through the South China, East China, and Yellow Seas.
Council on Foreign Relations[81]

Improved access to western China[edit]

Planned investments in Gwadar Port as part of CPEC will improve connectivity to the
restive Xinjiang Uyghur Autonomous Region, thereby increasing the region's potential to
attract public and private investment.[69] The CPEC is considered central to China–
Pakistan relations; its central importance is reflected by China's inclusion of the project
as part of its 13th five-year development plan.[82][83] The Gwadar Port project will also
complement China's Western Development plan, which includes not only Xinjiang, but
also the neighbouring regions of Tibet and Qinghai.[84]
In addition to its significance to reduce Chinese dependence on the Sea of Malacca and
South China Sea routes, the port of Gwadar will provide China an alternative and
shorter route for energy imports from the Middle East, thereby reducing shipping costs
and transit times. The currently available sea-route to China is roughly 12,000
kilometres (7,500 mi), while the distance from Gwadar Port to Xinjiang province is
approximately 3,000 kilometres (1,900 mi), and another 3,500 kilometres (2,200 mi)
from Xinjiang to China's eastern coast. [70] As a result of the CPEC, Chinese imports and
exports to the Middle East, Africa, and Europe would require much shorter shipment
times and distances.
A new transit hub for the Central Asian Republics[edit]
Upon completion of CPEC-related infrastructure projects, transit times between
Kashgar, China and Pakistan's Gwadar Port will be greatly reduced. This will in turn will
also reduce transit times to the Kyrgyzstan and hydrocarbon-rich Kazakhstan through
already existing overland routes. The Chinese government has already upgraded the
road linking Kashgar to Osh, Kyrgyzstan via the Kyrgyz town of Erkeshtam while a
railway between Ürümqi, China and Almaty, Kazakhstan has also been completed as
part of China's One Belt One Road initiative.[85] Numerous land crossings already exist
between Kazakhstan and China as well. Additionally, the Chinese government has
announced plans to lay railway track from Tashkent, Uzbekistan towards Kyrgyzstan
with onwards connections to China and Pakistan's coast. [86]
The heads of various Central Asian republics have expressed their desire to connect
their infrastructure networks to the CPEC project and Gwadar Port via China. During the
August 2015 visit of Pakistani Prime Minister Nawaz Sharif to Kazakhstan, the Kazakh
Prime Minister Karim Massimov, conveyed Kazakhstan's desire to link its road network
to the CPEC project, which will also provide Kazakhstan with access to the port. [87]
During the November 2015 visit of Tajikistan's President Emomali Rahmon to Pakistan,
the Tajik premier also expressed his government's desire to join the Quadrilateral
Agreement on Traffic in Transit to use CPEC and Gwadar Port as a conduit for imports
and exports to Tajikistan by circumventing Afghanistan. [88] The request received political
backing by the Pakistani Prime Minister.[88] The Pamir Highway in Central Asia already
provides Tajikistan access to Kashgar via the Kulma Pass. These crossings
complement the CPEC project to provide Central Asian states access to Pakistan's
seaports in Gwadar and Karachi by completely bypassing Afghanistan – a country
which has been ravaged by civil war and political instability since the late 1970s.
Comparison to Chabahar Port projects[edit]
In May 2016, Indian Prime Minister Narendra Modi and his Iranian counterpart
President Hassan Rouhani signed a series of twelve agreements in Tehran in a boon
to India–Iran relations. By these agreements, India Ports Global Pvt. Limited will
refurbish a 640-meter long container handling facility, and reconstruct a 600-meter long
berth at the Port of Chabahar,[89] as well as modernise ancillary infrastructure at the
berths.[90] Improvements at the port are intended to allow Indian goods to be exported to
Iran, with the possibility of onward connections to Afghanistan and Central Asia. [91] A
section of the Indian media described it as "a counter to the China-Pakistan Economic
Corridor,"[92] although the total monetary value of projects has been noted to be
significantly less than that of US$46 billion CPEC project, evaluated at worth about
$500 million.[93]
Indian financial commitments in Chabahar[edit]
As part of the twelve memoranda of understanding signed by Indian and Iranian
delegations as per text released by India's Ministry of External Affairs, India Ports
Global signed a contract with Iran's Arya Banader to refurbish and reconstruct two
existing berths at the port,[94] at a cost of $85 million[95] over the course of 18 months.
[96]
 The berth project represents the only direct investment in port infrastructure
mentioned in the May 2016 agreements. [97][98] Chabahar was developed in 1972 as the
oceanic port in Iran, and already features ten berths as of 2016,[99] with a capacity to
dock vessels of 80,000 deadweight tonnage.[99]
As part of the agreements, India will also offer a $150 million line of credit extended by
the Exim Bank of India for future port development,[100] India further agreed to extend a
$400 million line of credit to be used for the import of steel for the construction of a rail
link between Chabahar and Zahedan,[101] while India's IRCON and Iran's CDTIC signed
a memorandum of understanding for the possible construction and financing of the
Chabahar to Zahedan rail line at a cost of $1.6 billion.[102]
Chinese financial commitments in Gwadar[edit]
China has not offered Pakistan any line of credit for CPEC infrastructure development in
the same manner as India has for Iran. [103][104] As part of CPEC, China has instead has
committed $1.153 billion to finance construction projects and development of the port
and adjacent sites.[105] Chinese commitments in Gwadar as part of the CPEC project
include: the construction of the $140 million East Bay Expressway project to connect the
port with the Makran Coastal Highway,[35] installation of breakwaters at Gwadar port
which will cost $130 million,[32] a $360 million coal power plant adjacent to Gwadar Port,
[106]
 a $27 million project to dredge berths in Gwadar harbour, [32] and a $100 million 300-
bed hospital in Gwadar.[35] A $114 million desalination plant will also be developed to
provide potable water, while $35 million worth of infrastructure projects around the
special economic zone will also be built. [37] China will also grant Pakistan $230 million to
construct a new international airport in Gwadar which is to be operational by December
2017.[107][needs update] A floating liquefied natural gas facility will also be built at Gwadar Port as
part of the $2.5 billion Gwadar-Nawabshah segment of the Iran–Pakistan gas pipeline.[9]
In addition to investments directly under the aegis of CPEC, the China Overseas Port
Holdings Company also initiated $2 billion worth of additional infrastructure projects at
the adjacent Gwadar Special Economic Zone on 20 June 2016.[10] COPHC will also
expand Gwadar Port with construction of multipurpose berths on 3.2 kilometres (2.0 mi)
of seafront to the east of the existing multipurpose berths. [31] COPHC will additionally
build cargo terminals in the 12 kilometres (7.5 mi) of land to the north and northwest of
the site along the shoreline of the Demi Zirr bay. [31]
Iranian and Pakistani responses to Chabahar development plans[edit]
After signing the Chabahar agreement, Iran's ambassador to Pakistan, Mehdi
Honerdoost, stated that the agreement was "not finished," and that Iran would welcome
the inclusion of both Pakistan and China in the project. [108] While clarifying that Chabahar
Port would not be a rival or enemy to Pakistan's Gwadar Port, [109] he further stated that
Pakistan and China had both been invited to contribute to the project before India, but
neither China nor Pakistan had expressed interest in joining. [110][111]
Pakistani analysts have endorsed the view that Chabahar is not a competitor, stating
that Gwadar has an advantage by being a deep sea port and the expansion of
Chabahar would in fact expand trade through Gwadar. Larger vessels that cannot dock
at Chabahar could dock at Gwadar and the cargo transshipped to Chabahar.
[112]
 However, Pakistan's military commentators have characterised the alliance between
India, Iran, and Afghanistan as a "security threat to Pakistan", and it had "ominous and
far-reaching implications" to the region. Pakistan's foreign policy advisor Sartaj Aziz has
further signalled that Pakistan may link the Gwadar port to Chabahar via rail. [113]

Future environmental impact[edit]

Some have expressed concerns on the future of the environment of the region in light of
the Gwadar port's expansion. A report of the LEAD Fellows' Study Group on the Oil Spill
(SGOS) alleges that a port expansion would lead to future damage on the maritime
environment such as oil spills and other human industrial waste pouring into the sea,
also alleging that Pakistan's laws on maritime pollution have weak penalties and lack of
institutional responsibility.[114]
This sentiment was shared by Syed Fazl-E-Haider. In his publication in Pakistan and
the Gulf Economist, Haider put forth the argument that the sea water on the Baloch
coast was pollution free due to the lack of human presence and activity. But ever since
the commence of commercial operations in the port, all this will result in environmental
consequences.[115]
In the jointly written book with Barbara E. Curry, Humpback Dolphins (Sousa spp.):
Current Status and Conservation, Part 1 of Advances in Marine Biology, PhD marine
biologist, Thomas A. Jefferson outlines some of the environmental consequences
suffered by the Balochistan coast. He discusses the problem of sewage waste and solid
waste affecting the coast including that of Gwadar. He argues that a thorough natural
habitat assessment and regulation of fisheries is a solution to this growing
environmental problem.[116]

Numismatics[edit]
Gwadar Port was featured on the back of the five Pakistani Rupee currency note, which
is no longer in circulation.[citation needed]

See also[edit]
 Container transport
 Foreign trade of Pakistan
 Government Shipping Office
 Keti Bandar
 Merchant Navy (Pakistan)
 Ministry of Maritime Affairs (Pakistan)
 Pakistan-China relations
 Pakistan Islands Development Authority
 Port of Karachi
 Port Qasim
 String of Pearls (Indian Ocean)