Monday, February 5, 2018

Gwadar: look and feel


The first expo in Gwadar may have missed the point. But make no mistake; Gwadar is happening. The timely construction of expo centre and the business centres in Gwadar Port’s Free Zone as well as the setting up of five new cranes at the port is a testimony that the Chinese are committed to the cause. The Chinese commitment can also be gauged by the fact that they are expected to increase the number of cranes in the next 12-18 months, whereas feasibility work is currently underway for the five additional berths expected to be added in the next three years as per the agreed upon timeline of Gwadar port development. But whether Pakistan is or not committed is another question, and in today’s piece, BR Research attempts to answer that (See also BR Research columns Feb 1, 2018).

Progress on most of the hard infrastructure projects is slower than earlier planned. This is bad news. But not really ‘news’ per se, considering that the responsibility of completing most of these projects lies with Pakistan, and everyone knows just how slow things move in Pakistan. By that account, the delays in some of the projects are not extraordinary (see table). Compared to the timelines given to BR Research in our field survey in January 2017 plans, the expected delays as of January 2018 are no more than one year at the most. Which isn’t too bad considering that some projects in Pakistan take 18 long years to complete; whereas some never see the light of the day.

Consider also Gwadar is a city being built from scratch. The city was no more than a small sleepy fishing village since the beginning of time, or at least throughout recorded history. Gwadar’s fate should have begun to change in Singapore Port Authority days. But it didn’t for reasons well documented. The city’s fate began to change after January 2016 i.e. after 6-8 months of policy spadework following the signing of the CPEC in spring 2015. Context matters!

The city’s fate can change for the better once Gwadar’s port – the CPEC’s reason of existence – opens for business. One low hanging fruit to that end is the migration of Afghan transit trade from Karachi to Gwadar (See BR Research column: Kicking-off CPEC, Nov 1, 2017). Sources say both the Chinese port management company’s officials and the Afghan traders are open to the idea, but permissions and policy framework are pending from Islamabad. And that brings us to the subject of governance.

At present, a lot many bodies and departments are involved in deciding the future of Gwadar; some more, some less – but all are involved in one way or the other. There is Gwadar Development Authority; Balochistan Development Authority; Balochistan Coastal Development Authority; departments of Balochistan’s planning & development; fisheries; industries; public health; local government; and the CM Secretariat, over and above a host of federal and provincial ministries and institutions. This begs the question whether Pakistan can indeed match China’s need for speed without changing the city’s urban governance structure (See also Fixing Gwadar’s governance structure, October 13,2017).

Be that it may, the city’s pulse in our field visit last week was much faster than last year’s. It is difficult to differentiate between the natural pulse and that because of the expo in which more than 3000 people visited (of which at least 2000 from outside of Gwadar). But new construction was visible last week; both in public areas such as Gwadar Port Authority’s housing complex, and in private housing schemes as well as new restaurants and hotel expansions. While the management of solid waste remains poor impairing local lives, local inclusiveness programme has begun.

The building for the much-awaited Vocational Training Institute for local community isn’t yet in place, but classes have begun in a boys’ degree college. The road to Quetta is also operational, opening up Gwadar’s access to the rest of Pakistan via Karachi and via Quetta. The presence of security apparatus was all too visible. It was so visible that we are not sure if the prospective FDI players would feel safe. Guns, whether goods ones or bad, are not the kind of things investors want to see while prospecting around a town.

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