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Govt’s lacklustre approach affects development pace at Gwadar


Tahir Niaz

May 01, 2019

ISLAMABAD   -   The lacklustre approach adopted by the federal and Balochistan governments has affected the pace of development at Gwadar Port and the Gwadar city in Balochistan province, according to the officials. The issues including pending decisions on application of taxes in the Port Free Zone, approval of Gwadar Master Plan, budget allocations pertaining to water, electricity, gas and basic infrastructure projects, lack of the railway linkage, putting Smart Port City project on no-priority list, slow funding and meager allocation for Gwadar Development Authority (GDA) business plan, power deficiency and non-connectivity with the national grid, water deficiency, completion of water projects, security issues, scarcity of clean drinking water, road linkages, poor IT infrastructure and no decision on the case for tariff rate for 300 megawatt coal-fired power plant in Gwadar have largely affected the pace of development at Gwadar, according to the documents and officials who spoke to The Nation on condition of anonymity.

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They said local and foreign investors, foreign governments and different port authorities are interested to sign agreements for investment at Gwadar but the so far unresolved issues have been hindering progress in this regard. They said the pending decisions on application of taxes in the Port Free Zone, approval of Gwadar Master Plan and budget allocations pertaining to water, electricity, gas and basic infrastructure projects have largely affected the development progress of the Gwadar Port. As per practice, no taxes are applied to free zone areas, however, the federal and the provincial government charge all taxes on import of all items as well as supplied from the local markets, they added.

The authorities at the Gwadar Port Authority (GPA) have sought removal of anomalies in the existing tax SROs. However, the Ministry of Maritime Affairs is yet to move a summary to the Finance Division, FBR and provincial government of Balochistan for issuance of SROs granting exemptions from local and provincial taxes as per Concession Agreement with China Overseas Ports Holding Company Ltd.

Similarly, the railway linkage, Gwadar Master Plan and Smart Port City have not been finalized yet. These projects are mutually funded by the federal and Balochistan governments and with the support of Chinese government. Slow funding and meager allocation for GDA Business Plan, power deficiency and non-connectivity with the national grid, water deficiency, and completion of water projects are major issues being faced by the Authority at the moment.  

Similarly, the case for tariff rate for 300 megawatt coal-fired power plant in Gwadar is under consideration of the NEPRA since long. Due to urgent power requirements, the NEPRA authorities should decided the matter as early as possible, according to the officials.

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Financing of some of the projects of Gwadar including Gwadar Fish Harbour, renovation of old town and solid waste management have also been stopped by the federal government due to financial cut in the PSDP. These projects are very important for development of the area and the residents and unless these projects are completed, the issue of unemployment of the local people cannot be resolved, said the officials. The authorities had also proposed a ferry service between Karachi and Gwadar for tourism purposes but it could not be materialized due to requirement of NOC from ministry of defence, according to the documents.

On the other side, China Overseas Port Holding Ltd (COPHC) with the support of Chinese government is actively participating in extending all possible support for the welfare of local people and development of the area. In this regard, an amount of Rs 5 billion was granted by Chinese government for health, water and basic infrastructure projects in the Gwadar Port area. However, the company has highlighted major issues as security, scarcity of clean drinking water, road linkages, electricity, gas, poor IT infrastructure and anomalies in the taxes currently being applied in the Port Free Zone area. Furthermore, the optic fiber line provided by the PTCL is not operational since very long which has been a major hindrance in progress of the area. 

As far as housing at Gwadar is concerned, 79 private housing schemes and 17 private industrial schemes were issued NOC but none of the sponsors/builders of these schemes have developed any scheme so far. It is responsibility of the GDA to get these schemes developed through the sponsors within the stipulated time and also protect investment of billions of rupees in these schemes but it seems the Authority has been unable to get it done. Five housing schemes were issued NOC in 2004 to provide living within a period of three years and fulfill the housing demand at Gwadar but none of them have started development work so far. Non-completion of private industrial schemes has also led to slow pace of industrialization in Gwadar. Furthermore, according to the officials, East Bay Expressway passes through the land of Pakistan Navy and Coast Guards and the project is being delayed because possession of the land is not being handed over by the Pakistan Navy and Coast Guards to the project developer.


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