Chinese co terminates container liner services to Gwadar; inadequate cargo & lack of use of port for transit to Afghanistan cited as reasons
By Dipanjan Roy Chaudhury, ET Bureau | Sep 09, 2019, 08.20 AM IST
The Gwadar port container liner service was launched to improve maritime trade.
NEW DELHI: Pakistan's Gwadar Port, built and managed by China, has run into rough weather due to inadequate cargo handled at the port and lack of use of port for transit to Afghanistan casting a shadow over Beijing’s Belt and Road Initiative (BRI) in the region.
China's COSCO Shipping Lines recently terminated its container liner services between Karachi and Gwadar due to slow construction of Gwadar Free Trade Zone leading to insufficient pick up in export and import volume at the port terminal, ET has learnt.
Insufficient functioning of Gwadar customs, high inland shipping cost and non-acceptance of transit items by the Karachi Port have further contributed to the decision by COSCO, ET has learnt. COSCO has alleged that inadequate policies and measures in Pakistan had seriously impacted market development and yield of COSCO’s Gwadar service, according to persons familiar with situation at Gwadar port.
Port operator Gwadar International Terminal Limited, the subsidy of China Overseas Port Holdings Corporation (COPHC), had also expressed disappointment to the Pak federal authorities over the recent developments, ET has reliably learnt.
The Karachi-Gwadar services launched as first container liner service at Gwadar Port in March 2018 was strategised to target the untapped market of coastal trade between sea ports in Pakistan, apart from eyeing Afghanistan transit trade. However, Chabahar port in Iran, and not Gwadar, has emerged as gateway to landlocked Afghanistan. India is helping expand and manage Chabahar port.
The Gwadar port container liner service was launched to improve maritime trade of sea-food, fruit, vegetables, marbles and minerals that did not materialise and had been facing difficulties since its launch, according to a person who follows the functioning of the Gwadar port.
The container liner service was heavily subsidised by COPHC for weekly vessel calls at Gwadar. Without much cargo and few containers being loaded, COSCO has now quit the Gwadar services for lack of economic feasibility, claimed the person quoted above earlier. COPHC has conveyed to the Pak authorities that it would be impossible to restart a new liner services within Pakistani ports.
The Chinese subsidised Gwadar container service was largely used to load and unload CPEC related construction equipment, machinery and other cargo. It has been learnt that China has warned Pakistan that the developments will adversely impact China Pakistan Economic Corridor as Gwadar is the jewel in crown of CPEC -- the key pillar of BRI in South Asia.