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Gwadar awaits Chinese takeover

The best news for Gwadar is that the Chinese are coming back. This once-thriving town has seen its fortunes falter since 2008, when President Musharraf left office and the current political government came into power.

world Updated: Feb 27, 2013 23:06 IST
Imtiaz Ahmad

The best news for Gwadar is that the Chinese are coming back. This once-thriving town has seen its fortunes falter since 2008, when President Musharraf left office and the current political government came into power.

"Suddenly the grand plans that were made for our town came crashing down," says Hazir Baloch, a 29-year-old councillor.

Gwadar was seen as a pet project of General Musharraf and his exit meant that money allotted to Gwadar was diverted elsewhere.

Musharraf's policy on Balochistan was long term, says analyst Farrukh Pitafi, who writes extensively on Balochistan.

Pitafi says that the Musharraf government had invested heavily in infrastructure and Gwadar was a starting point for an economic corridor that the then government envisaged.

Musharraf's departure meant that the government machinery, which was going out of the way to complete projects in Gwadar, diverted funds to other places.

The fund shortage, however, had a domino effect.

The delay in construction of roads which were to take goods from Gwadar to other parts of the country affected the projected volume of traffic that the PSA International, which was awarded the contract to run Gwadar Port, was expecting.

As a result, PSA also suffered heavily on its investment.

As a concession holder, the PSA installed two Gantry cranes, 200 meters of single rails and one sub-station at Gwadar Port.

Under the deal, the PSA was bound to invest $775 million for the development of the port, but it was unwilling to make investment without getting free of cost land. The port ended up being a commercial failure and was operating at about 15% of its capacity.

But it was not just the departure of the military strongman that caused the fortunes of this former fishing village to flounder. A number of other factors seem to have come into play.

Militancy in Balochistan and attacks on Chinese nationals forced Beijing to abandon plans of setting up a refinery here in 2008.

The worsening law and order situation affected the town's commercial prospects as a number of real estate projects and businesses went bust.

Possibly no other building in Gwadar illustrates the fate of the town than the majestic Pearl Continental Hotel, which sits on a hill, the Koh-e-Batil, on one side of town. The 200-room hotel has remained shut for the past three years waiting for better days.

With its balconies overlooking the Gwadar Port on one end and the Strait of Hormuz on another, the PC has unrivalled views. But there is no one to admire the super tankers that silently pass view in clear view, transporting a sizable quantity of the world's oil supplies.

Even if the hotel opened today, it would be unable to cater to guests because of an acute shortage of water in Gwadar.

Aslam Hingoro, an official at the Gwadar Development Authority, estimates that over 20,000 people have left Gwadar in the past year because of the shortage of fresh water.

"A water tanker costs Rs. 5,000 and many people simply cannot afford to spend so much on a basic necessity," he says, and the reason for the shortage is that the local water plant has broken down.

It was attacked by miscreants last year and since then there is no reliable supply of water. Militants who are fighting for an independent Balochistan target government installations on a regular basis.

Most hotels are now closed.

Government offices are deserted and the only industry that seems to be functioning is the seafood export processing plants that line the sea shore.

Most sell their produce in Karachi, which is a seven-hour ride away, but some owners say that they cannot run their businesses in the face of deteriorating law and order in the area.

"Militants ask us for protection money. They stop our consignments. They kidnap our workers," says one factory owner.

Two years back, the Balochistan government decided to shift its capital from Quetta to Gwadar in the winter months.

But in practice, this was just a political gimmick as the provincial chief minister or governor never stayed here for long. That effort at reviving Gwadar was seen as the last nail in the coffin. At the same time, the same government is angry that the Centre did not take it into confidence on the deal with China.

And yet, for many, the signing of the agreement with the Chinese Overseas Port Holdings is seen as a return to better days. Many of the young men who stand outside video shops and sit in small restaurants say that they hope they will get jobs once the port resumes its full operations.

Others look forward to providing the Chinese employees with hotels, food, and other requirements.

China has not only committed to running the port but also investing heavily in the infrastructure around Gwadar so that goods can be transported upcountry.

Akeel Dhedi, chairman of the AKD Securities which previously held a 20% share in the Gwadar port, told HT in Karachi that the Chinese company has assured to invest $750 million immediately to improve infrastructure. He said he was confident that Gwadar would boom again soon.

Most hope that the government will once again focus on addressing the basic issues. In the face of this, the comments by some analysts that handing over Gwadar to the Chinese is a challenge on the country's sovereignty is dismissed by many.

"What sovereignty? We need to live, we need to eat and we need to work," says an angry Islamuddin, who works as a motor mechanic in main Gwadar town.

One enterprising man has already set up a Chinese training institute with classes expected to start in a month or so.

For the rest of Pakistan, however, there are many questions that need to be answered.

"If the same was done where the Americans were handed control of a Pakistani port, we would have had an avalanche of criticism," comments Aisha Siddiqa, a defence analyst.

"This is not just about a port," says one analyst, "it is much deeper."