Construction of the deep sea port started in April last year, in Gawadar, a city on the south west coast of the country near the border with Iran. The port is strategically located at the mouth of the Persian Gulf, across the Straits of Hormuz from Oman.
Up to 20 countries may benefit from the port, from the isolated Xinjang province of western China to the oil rich states of the Middle East. It will act as a cargo hub, connecting Pakistan, Afghanistan and the Central Asian republics with the states of the Persian Gulf - Oman, Qatar, Saudi Arabia, the United Arab Emirates (UAE), Iran and Iraq.
Originally started in 1992, the project was delayed due to political instability in Pakistan in the late 1990s. However, the first phase, which includes development of a 15.5 meter channel and three berths, is now under way and is due to be completed by 2005. In the second phase a further 18 berths, including oil, chemical and container terminals, will be built.
The total cost of the first phase alone will be around $250 million, with $50 million provided by the Pakistani government. The Chinese government is providing funding worth $198 million, which includes a grant of $49 million and $31 million interest-free credit.
Within Pakistan, work on the project has already started to revitalize the poor Baluchistan region around Gawadar. According to Pakistan's Prime Minister Mir Zafarullah Khan Jamali, the port will give a boost to the country's economy and is set to play a vital role in making Pakistan economically sound in the long term.
The port will considerably improve access from Central Asia to world markets, and lessen their reliance on transit through Russia. Although rich in oil, gas and natural resources, the five Central Asian republics have been unable to fully exploit these resources due to their difficulty in finding viable export routes.
Gawadar will become the closest sea port to regions as far east as Xinjiang, which is 2,500 km from Gawadar but 4,500 km from its nearest port to the east. Currently Xinjiang is under-developed compared to China's eastern coast, where most of the country's economic activity is concentrated. By subsidizing the construction of this port, China hopes to give fresh impetus to development of the Xinjiang region, which is already connected to northern Pakistan by the Karakorum Highway.
Trade from Central Asia to Gawadar will have to be routed through Afghanistan, and a new road linking the Central Asian republics to Pakistan, via Afghanistan, is currently being designed. This road would cover the 515 km between Gawadar and Herat in eastern Afghanistan, via Panjgpur, Khaan, Chaghi.
Afghanistan will therefore benefit from transit trade as well as from increased Afghan exports (chiefly minerals and dried fruit). Afghan finance minister Dr Ashraf Ghani is enthusiastic about the port, and has said he hopes it will become a "port of peace" for all of Central Asia. However, the issue of security needs to be resolved before Afghanistan can become an effective transit route, especially following the recent attack on Pakistan's embassy in Kabul.
Transport links between Gawadar and other regions are already under construction. Within Pakistan, a 700-km coastal highway, linking Karachi on the east with Jiwani (close to the Iranian border) to the west is currently being built. This is due to be completed by the time the port is built in two years time. A railway link between Gwadar and Taftan in Iran via the Saindak copper mine is also being planned.
By Clare Nuttall,
The Times of Central Asia, August 16, 2003