Impact of Gawadar Port on the

Economy of Pakistan
under the CPEC
 GWADAR PORT
1. MEANING OF GWADAR:

The word Gwadar was actually “Gwat -a- dar” which means the door of wind in Balochi.
2. LOCATION:

Gawadar is located on the western end of coast of Balochistan and have 600
K m long coastline along the Makran coast of the Arabian Sea;' Located at the entrance of
the Persian Gulf and about 460 kms from Karachi .
3. * HISTORY :

❖On 8 September 1958, Pakistan purchase Gawadar Enclave from Oman for $3 Million.
❖Gwadar Port is a warm-water, deep sea port situated on the Arabian Sea at Gwadar in
Balochistan province of Pakistan.
❖The Project (CPEC) was proposed by Chinese premier Li Keqiang during his
visit to Pakistan in May 2013.
❖Phase 1 of Gawadar was completed in 2007, and inaugurated on 20 March 2007
by General Parvez Musharraf in $248 Million.
* In 1993, The government of Pakistan create a plan to develop Gawadar into a
major port city.
In Sep, 2016 the Gwadar development authority published a request for tenders
for the preparation of expropriation and resettlement of old town Gwadar.' The
Government of Pakistan has committed to providing a naval base to china in
Gwadar. ' In April, 2015 Pakistan and china announced there intention to
develop the $46 million for CPEC.
4.A VIEW OF GWADAR IN 1950:

CONSTRUCTION PHASE :Approach Channel: 4.5 km long dredged to 12.5 m

depth ' Length of Berths: 602 m in total ' Berths: 3 Multipurpose Berths ]
'CONSTRUCTION PHASE 1 The first phase of
construction at Gwadar Port began in 2002, and was completed in 2006,
before inauguration in 2007. It consists of
PHASE 1 :

Built at a cost of $248 million.' Related port infrastructure and handling

equipment, pilot boats, tugs, survey vessels, etc.
> Service Berth: One 100 m Service Berth
> Turning basin: 450 m diameter
PHASE 2 :

> 2 Oil Terminals (capacity: 200,000 DWT ships each)

> 1 Grain Terminal
> 1 Bulk Cargo Terminal (capacity: 100,000 DWT ships)
4 Container Berths along 3.2 kilometers of shoreline
It consists of following projects,
❖360 megawatt coal-fired power plant
❖2,292 acre special economic zone to be developed adjacent to port
❖Floating liquefied natural gas terminal with capacity of 500 million cubic feet of
gas per day
❖New international airport
❖4 lane expressway to connect the port to the Makran Coastal Highway 'PHASE 2
5. LONGER TERM PLANS:

Capacity to handle 400 million tons of cargo per year' 150 berths to be built by 2045
' Dredging of approach channel to depth of 20 meters
6. EXPANSION UNDER CPEC :

❖COPHC [CHINA OVERSEAS PORTS

HOLDING COMPANY} will also built Cargo terminals in 12 km of land to the
north and north west of the side along the shore line.' Under the CPEC plan, Chine
oversees port holding company will expand Gwadar port with construction of nine
new multipurpose berths on 3.2 km of seafront to east of existing multi purposes
berth.
❖COPHC plans to eventually expand the port capacity to 400 Million tons of cargo
per Year.' It is
expected that by 2017, the port will handle over 1 Million tons of cargo, most of
which consist of construction material for CPEC. ' COPHC has awarded $1.02
billion worth of contracts for the expansion of port. ‘
7.FINANCING FOR PORT :
This amount is divided into following construction included $140 million for east
Bay expressway.' The Government of China in August 2015 announced that the
previously announced loans for several project in Gwadar totalling $757 Million
would be converted 0% interest loans for which Pakistan will only be required to
repay principle value.
❖$100 million for 300 bed hospital in Gwadar.' $360 Million for coal power
plant in Gwadar and $27 million project for Dredge berth in Gwadar harbour.
And $130 million is for the installation of breakwater in Gwadar.

❖In sep, 2015 China announced that $230 million Gwadar International Airport
project would no longer be finance by loans, but would instead be constructed by
grants which the Government of Pakistan will not be required to pay
 8.GWADAR PORT IMPORTANCE FOR CHINA :
China - largest population. o Energy needs of China. o Importer of oil from
middle east. o Gwadar- surrounded by countries having two third oil
reserves. o Can act as shortest trade route to China.

9.IMPORTANCE OF CPEC FOR CHINA:

Chinese industries are facing problems to compete in global market due to
high transportation cost and delivery time. o China is using a longest way
due to which transportation cost and time increases, which gives a
competitive edge to competitors e.g. Japan, USA.
10.IMPORTANCE FOR CENTRAL ASIAN COUNTRIES :
Gwadar is shortest way to sea.
❖Have no sea port.
❖Landlocked ❖Central Asian countries

:
11.IMPORTANCE FOR PAKISTAN:
Strategic and economic trade routes. o Development of Infrastructure. o Connect all
the Province.
❖Development of Fata, KPK and Baluchistan. o Job opportunities o Equalization
among Provinces. ❖Revenues from Gawadar Port.
12.STRATEGIC AND ECONOMIC TRADE ROUTES:
Iran also unveiled its own plans for setting up the world largest refinery there with a
production capacity of 400000 barrels per day at the cost of $8 billion.' After
Gwadar port was handed over to china a huge investment injected subsequently. '
The Gwadar port is important for Pakistan and also for China from economic point
of view.

13. DEVELOPMENT OF INFRASTRUCTURE:

This is two sided agreed between Chairman GPA and the president of COPHC'
Pakistan and China has agreed to ecpedite efforts to achieve as many as fifteen
targets for development of infrastructure project at Gwadar port. '
14. CONNECT ALL THE PROVINCE :
It is important for ecnomic point of view for transport and trading.' Which is 653 km long.
' Makran Coastal national highway in Pakistan which extend along Arabian sea from
Karachi to Gawadar.
15. ECONOMIC IMPACT OF GWADAR PORT DEVELOPMENT ON THREE
INDUSTRIES:
❖Gwadar port development has the most significant impact on the city’s tertiary
industry, and with the score reaching 79.10.
❖Secondary industries have taken the second place with the score of 73.29, while the
primary industry only reaches the score of 60.05. As noted above, the difference among
the three sub-criteria is relatively high which makes sense since port industry itself is a
component of tertiary industry.
16. REVENUE PERFORMANCE OF GWADAR:

Type Of Activity Share In Percentage Electrical services 4.7%

❖Hotel services 6.2%
❖Real estate development services 12.0%
❖Shipyards and repairing services 12.1%
❖Travel services 2.9%
❖Warehousing distribution services 9.5%
❖Recreation activities 6.7%
❖Fuel oil bankering services 10.6%
❖Agricultural & Fisheries 18.5%
❖Transportation 16.8%
17. REVENUE PERFORMANCE OF GWADAR :
Category Average (2013 to 2014)
❖Average income 7,748,400 ❖Average expenditure 4,175,083 ❖Average
gross Profit 3,573,150
18. GWADAR PORT DIRECT EMPLOYEES INCOME
> Income of Employees Gwadar Port Authority (2014 in Rupees)

❖ Job Position Income (Local) Income (Non-Local) Grade 17th staff (GPA)
Rs. 60000 Rs.60000 Administration Staff (GPA) Rs.18000-35000 Rs.18000-
35000
❖Trading Corporation of Pakistan Rs.750 Per Ton Rs.750 Per Ton
❖ General Manager cum pilot (PSA) Rs.175000 Rs.175000
❖ Administration Staff (PSA) Rs.25000-35000 Rs.25000-35000