SOURCE:
http://defence.pk/threads/chabahar-vs-gwadar-port.328698/
Chabahar vs Gwadar Port
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The Great Game redux: China and India maneuver over Arabian Sea ports, Gwadar (top) and Chabahar (below)
Both Pakistan and Iran being close neighbours have cordial and fraternal relations with each other. Both have evolved master plan to create economic, trade and transport ties with Central Asian countries, Afghanistan and beyond. The two countries have offered all sorts of facilities and generous incentives to shipping companies and other countries of the world to do business in their respective ports. For Central Asian countries, both the ports are most likely to become major link to global market.
Construction of Gwadar Port was necessitated due to the fact that Karachi Port was already heavily-loaded with serious congestion from commercial, fishing, civil and military shipping. It may be recalled that in 1971, the Indian Navy targeted the Karachi Port leading to a massive harm to the economy of Pakistan. It was felt that any future blockade by India would further devastate Karachi Port and economy of the country. In order to relieve too much reliance on the Karachi Port, another port by the name Port Qasim was established in Karachi. Now, with the establishment of Gwadar Port in the province of Balochistan the reliance on Karachi Port will be further reduced.
Port of Bandar Abbas in Iran is of strategic importance as it is situated on the Strait of Hurmuz leading to the Persian Gulf. This is problematic for Iran because of the high traffic and probably the penetrations of US Navy. To be more secure, the Iranians established Port of Chabahar for more congenial trade with other countries. They foresee that Chabahar Port as an instrument in their policy to escape international isolation. Iranian officials state that they desire to have Bandar Abbas Port remain as the port for Russian and European trade.
Chabahar Port is situated on the Makran Coast of the Sistan and Balochistan of Iran and is officially declared as a free trade and industrial zone by the Iranian government. The port has been developed by India. It is the closest and best access point to the Indian Ocean. Its location is at the most secure and closet route to Central Asia and Afghanistan market. It has proximity to the largest energy resources of the world. Its economic sectors are fishery industries and commercial. The port is well-connected to other cities of the country by road and airlines. A strategic partnership will be established between Iran, India and Russia to establish a multi-model transport link connecting Mumbai with Saint Petersburg, providing Europe and the former Soviet Union Republics of Central Asia access to Asia and vice versa. Iran and Afghanistan have signed an agreement to give Indian goods leading for Central Asia and Afghanistan, preferential treatment and tariff reduction at Chabahar Port.
The berths in Port of Chabahar include general cargo and bulk. Berth capacities range from 2,000 to 2,500 tonnes. Chabahar Shahid Beheshti Jetty has a length of 600 metres and can berth four vessels of up to 25,000 gross tonnage and 11-metre draught simultaneously. The other Shahid Kalantary Jetty has a length of 1100 metres, four metallic ready-made jetties. Adequate reserves of water and electricity efficient telecommunication network, warehouses and cold storage facilities are already available.
Gwadar Port is located on the Gulf of Oman, close to the entrance of Persian Gulf. It is a deep warm water sea port, about 460-kilometer west of Karachi and approximately 75-kilometer east of Pakistan border with Iran. The port is close to the important Strait of Hormuz, through which more than 13 million bpd of oil passes. It is strategically between the oil-rich Middle East, the economically shortest route to the oil-rich Central Asian States through land-locked Afghanistan, and heavily populated South Asia. It is at the mouth of the Gulf through which 40 per cent of world's daily oil passes. Much of it has been financed by China. At present, the project is estimated to be $1 billion or even more. In 2007, the government of Pakistan handed over the operations of port to PSA, Singapore for 25 years and gave the status of a Tax-Free Port for 40 years. The port became somewhat a little bit functional in 2008 with first ship to dock bringing 52,000 tonnes of wheat from Canada.
Gwadar Port has the capacity to handle large crude containers of up to 500,000 tonnes deadweight. It will have three containers terminal, a bulk- cargo terminal, a grain terminal and an oil terminal. It would promote economic development in the country and would provide vast employment opportunities to the Baloch people. The establishment of Free-Trade and Economic Zones and Export Processing Zone would attract foreign investment, and employment opportunities to the local people. The port will not open large avenues for the people of Mekran engaged in fishing and agriculture but will also facilitate easier transportation of date export to foreign markets. Gwadar would generate massive revenues for the Balochistan province. It would become a trade hub, once road and rail links are linked to the rest of Pakistan, Afghanistan and Central Asia. Pakistan has future plan for development of Gwadar to cater foreign trade of the Central Asian Republics and the Xingjian and the Sichuan provinces and the Tibetan region of China. It also proposes the construction of a rail and road network between Gwadar and Xingjian.
Gwadar Port will have to face stiff competition from Chabahar. It is still not operating vigorously as Chabahar. The supporting structures at Gwadar Port are still not existent. Two years have passed away and there is no visible economic activity in this port. Several projects such as 950-km railway and 900-km motorway to link with railway and highway of the country have so far remained only in files. The 200-km branch road which would link coastal road to the Indus Highway at Ratto-Dero is still not developed. There are no internal roads and services and water, gas, power and communication services for the new township and industrial zone. There are no warehouses and cold storages there.
India's financing and engineering assistance is not only limited to Chabahar Port but it is also actively developing a highway that leads from the Chabahar Port to Afghanistan. Chabahar Port is well-suited for linking southern ports of Afghanistan and a few Central Asian States. For Pakistan in the present condition the Southern Afghanistan is not ready to be a reliable transport corridor for Pakistan access to Central Asian states. Gwadar Port can be operated efficiently if there is no kidnapping and deadly attacks on foreigners and the government of Pakistan makes favorable concessions to Baloch people living in Gwadar and its surrounding areas.
As long as peace and tranquility prevails in the region and there is no cutthroat competition between Chabahar and Gwadar ports and India does not unduly interfere in the affairs of Balochistan by supporting the insurgency there the Gwadar Port trading activities will be accelerated. Further, the current confirmed involvement of terrorism activities by India in Swat and tribal areas and rising Indian economic and political influence in Afghanistan would exacerbate the tension in the region and would harm the normal activities of the Gwadar Port.
With the full operation of Gwadar Port, there are bright prospects for Balochistan for attaining on economic par with other provinces of Pakistan. The real value of Gwadar Port could be witnessed when Chinese trade grows with Gulf States, Middle East and European countries. Any transport or defense problems in the Strait of Malacca, the Strait of Hurmuz and the Suez will promote the significance of Central Asia as a strategic trade corridor. China, Iran and India are desperate in having closer ties with Afghanistan and Central Asian states. Iran's main considerations are not only boosting trade but securing its borders and avoiding American Navy in this region. Pakistan wants peace in its region and it does not want that militants spoil further its economy and it hopes for the best relations with Afghanistan and Central Asian states. According to the Iranian officials, both Chabahar and Gwadar can equally benefit from Central Asian business.
Conclusion
The countries of Central Asia will likely benefit from both Chabahar and Gwadar. Diversifying its import and export routes is a logical economic and political step. Although one should not exaggerate the economic benefits to be reaped. As for the competition between the two ports, it will not be a “winner take all” outcome but rather one port earning the greater share of trade. And the “winner” in this respect will likely be Chabahar, at least in the short term. Iran is more stable than Pakistan, it has better relations with Afghanistan and the Central Asian states, and unlike the Gwadar route its proposed route goes through relatively stable parts of Afghanistan. As long as Iran avoids outright conflict with the United States or any sort of domestic turmoil it should come out of this competition with an advantage.
For further readings;
Central Asia’s Seaport: Gwadar or Chabahar? — Registan.net
Chabahar Versus Gwadar | The Pakistani Spectator
Their Gwadar, Our Chabahar
Chahbahar and Gwadar
Chabahar To Central Asia Highway
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- Afghanistan is a land-locked country. Most of its international trade is done through Pakistani sea-ports.
- Therefore, India wished to connect to Afghanistan via an alternative route (through Iran).
- So, In 2003 a trilateral agreement was signed among India, Iran and Afghanistan.
- Under this agreement
- Iran was to build a highway from Chabahar (a Port City of Iran) upto Afghanistan border.
- India was to build a road connecting Delaram (border city of Afghanistan) to Zaranj (Capital of Nimruz province of Afghanistan)
- Delaram–Zaranj Highway, also known as Route 606.
- It connects Delaram (border city of Afghanistan) to Zaranj (Capital of Nimruz province of Afghanistan).
- India totally financed this project. (about 600 crore rupees).
- Border Roads Organization (BRO) of India, has constructed this highway.
- Construction started in 2005, and in 2009 the road was opened for public use.
- All these years, India was requesting Iran to allow them to do some port Development on this port. And now the permission is issued.
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Chabahar is situated on the Makran
Central Asia’s Seaport: Gwadar or Chabahar?
By
Both Iran and Pakistan have developed strategies to create strong economic and transport ties with Central Asia and beyond. Anchoring these strategies are two new seaports: Gwadar in Pakistan and Chabahar in Iran. Spreading out from these ports are existing or planned transportation infrastructure that leads into their respective country’s economic center and importantly for Central Asia, northwards. Both ports are well towards becoming fully operable and are offering generous incentives for companies and governments to do business in their ports. However, serious political, economic and logistical problems remain. For Central Asia one of these two ports, or indeed both, will likely become important links to world markets.
Tip: look way down into the bottom left-hand corner to see the ports.
The problems with Karachi and Bandar Abbas
Karachi is already overburdened with severe congestion from commercial, fishing and military shipping. And from a strategic vantage point it is quite problematic. The Indian Navy targeted the port in 1971 and any blockade in the future would devastate Pakistan since that country has an overreliance on the port of Karachi. The port of Qasim, built in the 1970s was to relive some of that burden and the port of Gwadar is expected to further reduce the reliance on Karachi.
Bandar Abbas is of enormous strategic significance to Iran as it is located on the Strait of Hormuz leading into the Persian Gulf. But that is also a problem for Iran. The area is already burdened with high traffic and of course, the U.S. Navy. Iran wishes to have another port that is more conducive to trade and further growth.
Gwadar
Gwadar, being much further away from India than Karachi, makes obvious strategic sense. But it is its commercial potential that will provide the most benefits. Gwadar is not some long-term project. Its first phase, with 75% of the costs covered by the Chinese government, is already completed. The existing docks, built by the Chinese Harbor Engineering Company, are now being operated by Port of Singapore. Port of Singapore won the contract over Dubai Ports World, the company that was forced out of America by opportunistic xenophobes in both political parties there. Phase two will be completed by 2010, adding even more capacity. Ziad Haider, a researcher at the South Asia Program at the Henry L. Stimson Center, noted that Pakistan can make the project succeed if it maintains the financial and political support of China for the project and if it makes some concessions to the Baluchis near Gwadar, who have already carried out deadly attacks on Chinese engineers.
The problem with Gwadar, wrote Ammad Hassan in his thesis for the US Naval Postgraduate School, is that while the port has been built, “the supporting infrastructure of railroad link, industrial capacity, and civic structures at Gwadar is almost non-existent.” And of course, all analysts mention Pakistan’s extremely problematic relations with the ethnic Baluch in the area who, in addition to having been in a low-grade insurgency for some time, are not at all supportive of the port. And to understate another issue, southern Afghanistan is not quite ready to be a reliable transport corridor for Pakistan to access Central Asia, despite the Afghan government’s voiced support for the project. Nevertheless, the idea of further integrating Central Asian and Russian resources southward with the Asian and Middle Eastern market has others optimistic about the long-term prospects. The Asian Development Bank is somewhat cautious though, noting that initially the port will be significant only to Uzbekistan, Turkmenistan and Tajikistan.
Chabahar
Gwadar’s competition for trade and transport will come from Chabahar, the new Indian-financed port in Iran. A port outside of the Persian Gulf makes sense from a strategic and logistical viewpoint for Iran. The port of Chabahar was part of a plan to develop transportation infrastructure in Iran’s east for many years. Initially put in hold in 1984 it was revived in 2002 with Indian help. And the financing and engineering assistance from India is not limited to the port. India, wishing to bypass Pakistan, is also cooperating on a highway system that leads from the port into Afghanistan as well as a planned railroad to Afghanistan. Iranian officials state that they wish to have Bandar Abbas remain as the port for Russian and European trade and have Chabahar become the port for trade with Afghanistan and Central Asia. Iran already has good relations with everybody along the route leading north (including the local “warlords”) into Tajikistan. And significantly, it is in Tajikistan where Iran has already been financing several transport projects including the Anzob tunnel. And luckily for the Iranians, the U.S. constructed a bridge over the Amu Darya that fits in nicely with the Chabahar to Khojent route.
Prospects for economic integration of Central Asia with the South
For energy and mineral resources to be sent south from Central Asia a much more expensive transport infrastructure will be required than what is being built at the moment. Another limitation is the lack of a business friendly environment in most Central Asian states. And consumer goods are already entering Central Asia from Russia and China. What more is there a demand for? Furthermore, many Central Asian leaders are obsessed over local issues and haven’t been overly enthusiastic about regional integration (with Uzbekistan being the worst offender).
What is a long-term prospect is Central Asia being a transport route from the ports to Xinjiang, Russia and Kazakhstan, all of them important markets. The routes to Gwadar and Chabahar cut off thousands of kilometers for certain trade routes.
Strategic Considerations
Any transportation or military problems in the Straits of Malacca, the Straits of Hormuz, the Suez or anywhere along Asia’s southern coastline will further boost the importance of Central Asia as a transport and trade corridor. Beyond Pakistan and Iran, both China and India are seeking closer relations with Afghanistan and Central Asia. The planned transport and trade routes will have the obvious effect of building solid ties. Iran’s considerations are boosting trade, having secure borders, and avoiding “encirclement” by American proxies (no matter how much a figment of the Iranian government’s imagination). As for Pakistan, the governments there has hoped for better relations with Central Asia. However, their Afghanistan policy always got in the way. Now they hope to move away from that era.
Conclusion
The countries of Central Asia will likely benefit from both Chabahar and Gwadar. Diversifying its import and export routes is a logical economic and political step. Although one should not exaggerate the economic benefits to be reaped. As for the competition between the two ports, it will not be a “winner take all” outcome but rather one port earning the greater share of trade. And the “winner” in this respect will likely be Chabahar, at least in the short term. Iran is more stable than Pakistan, it has better relations with Afghanistan and the Central Asian states, and unlike the Gwadar route its proposed route goes through relatively stable parts of Afghanistan. As long as Iran avoids outright conflict with the United States or any sort of domestic turmoil it should come out of this competition with an advantage.
Primary Sources:
Ahmed RashidAmmad Hassan (pdf)Asia TimesAsia Times #2Gwadar CornerJamestown FoundationRizwan ZebIran DailyDaily TimesZiad Haider (pdf)
The distance between Gwadar port, Pakistan and Chabahar port, Iran is just 72 kilometers (around 38 miles). The very close proximity of these ports make both of them geographically equally important. Pakistan has always eyed Gwadar as its Ace card, because nobody thought that someday Iran would blink, acquiesce to the world’s demands, and sanctions would be eased. Just until yesterday, the only cargo coming and going from Chabahar belonged to India, the arch-rival of Pakistan.
With Iran’s ground-breaking nuclear pact with the United States has changed the game altogether. It has not only angered Saudi Arabia and Israel, it has in fact made Pakistani policy makers worried and anxious, as Iran’s return to normal relations with the world will snatch the strategic lever from Pakistan. Afghanistan’s transit trade, NATO supplies, corridor to Central Asia, and Russia’s aspirations to get trade window through warm waters can easily be accomplished through Chabahar, rather than Gwadar, which we always thought.
Chabahar has multiple advantages over Gwadar too. Chabahar is located in southeastern province of Sistan-o-Balochistan of Iran, and its not restive and lawless as our Balochistan. There is no military operation there. Indians are investing in Chabahar like crazy. They haven’t invested that much money even in any of their province at the same time in such a short span time, but they have developed a highway from Chabahar to Kandhar-Herat. India has completely bypassed Pakistan for trade with Afghanistan, central Asia and Russia. It has also got direct access to Afghanistan’s $3 trillion mineral reserves. Both Iran and Afghanistan are keen to use this corridor as much as possible, as this corridor not only bypasses Pakistan, it also bypasses Taliban stronghold areas in Afghanistan.
While India invests money in Chabahar, China is pouring money into Gwadar, though not as fastly as compared to Indians in Iran. Still there is no good road or rail infrastructure linking Gwadar to rest of Pakistan. Military operation is going on, and lawlessness is rampant. Writ of the government is also shaky. To add insult to the injuries, recent blockage of Afghan transit trade in Peshawar by political parties has sent a very wrong message to the world. When other nations are joining hands, opening windows of opportunities, we are closing the doors, threatening others.
So what we can do to keep Gwadar attractive? Firstly, we need to understand that merely speaking about Gwadar won’t get us anywhere. We need to work hard to build that port. Make it a true trade free zone, and most importantly ask China to speed up building road network and provincial and federal governments must ensure safe passage. India and Iran are planning to build a rail link from Chabahar to Hagigak region of Afghanistan. We must take lead and complete our Gwadar to Kashgar route.
What we can do to exploit our situation is to take sides with Saudi Arabia, and along with China ask them to sponsor Gwadar and other infrastructure. UAE might also jump in, as all of them feel very threatened by the Iran, and there is also Sunni-Shia dimension to this whole scenario. Our relations with Iran are just so-so always, and we must not aggravate them, while ensuring that our interests in the region remain intact.
Their Gwadar, Our Chabahar
(http://www.dailypioneer.com/columnists/business/their-gwadar--our-chabahar.html )
The economic corridor taking off from Kashgar in Xinjiang to Gwadar is a game changer as far as this region is concerned,” South China Morning Post quoted Pak prime minister Nawaz Sharif ahead of a 6-day visit to China Wednesday.
Beijing and Islamabad plan a series of SEZs, a rail link, and a pipeline running from the Arabian Sea port of Gwadar to the old Silk Road town of Kashgar in Xinjiang’s western border.
Our bid is limited to rebuilding the Chabahar Port in Iran, merely 100 km west of Gwadar. Even these baby steps are much to the discomfiture of the US lobby within our system. Last month, Union shipping secretary PK Sinha was in Chabahar, fast-tracking this long-pending $100-million investment.
The Iranian port can serve as our direct entry point to Afghanistan and Central Asia, circumventing Pakistan. Not surprisingly, Beijing recently offered Tehran a matching line of credit of 60 million euros! If there’s sloth on our part, Sharif’s port of good hope is steeped in poor economics.
Typical of Pakistan, all eggs have been stacked with a Chinese entity, the State-owned Overseas Port Holding Company. That’s after PSA International of Singapore, owned by Temasek, the island nation’s sovereign fund, walked out despite the tax breaks. Gwadar’s flawed commercials and Pakistan’s troubled business environment and endemic corruption broke their back.
Surely, Beijing’s plans are more strategic than tiny Singapore’s. A Chinese naval base in Gwadar, just 330 km from the Straits of Hormuz, the chokepoint of 20 per cent of the world’s oil, worries India’s strategic community. Yin Zhon, a Chinese rear admiral, stoked this. “It would be appropriate if we could have a relatively stable, fixed base for supplies and maintenance,” Yin said.
Naval Chief Admiral DK Joshi has steered clear so far. But what Joshi said in December, on the South China Sea, “country’s interests [are] at stake, we will be required to go there and we are prepared for that” might apply to Gwadar.
Joshi’s grand predecessor, Admiral Sureesh Mehta, has been direct. Gwadar would allow China “to take control over the world energy jugular and interdiction of Indian tankers,” Mehta has warned.
“The location provides China a means of keeping an eye on ships moving through Hormuz. In a future conflict this could aid the Pak navy,” concurs Manoj Joshi, distinguished fellow at the Observer Research Foundation.
The counter to Mehta and Joshi is that China’s ‘String of Pearls’ among ports from Port Sudan to Myanmar suffers from financial limitations. Business wise, Gwadar is a dud. China might be able to afford it as ‘place’ but not as a ‘base.’
Beijing’s keenness to invest in sea lanes coming from the Middle East, and her hunger for energy in the western regions notwithstanding, Gwadar means more to Pakistani navy’s pursuit of depth rather than a Chinese need for favourable terms in a number of overseas ports for maintenance, repair and refueling.
Sheer costs and the perils of evoking the world’s suspicions might stop Beijing from splurging $1 billion needed for Phase II of Gwadar. (It has spent $198 million on the construction so far). Given Baluchistan’s insurgency, including attacks on Chinese employees, relative economics of the Karachi port is distinctly superior. Also, to Gwadar’s west, 1,000 km nearer the ‘action,’ China has already cozied up to Oman: developed infrastructure is for the taking at Salah Port.
Sharif and his predecessors market Gwadar as a hub for exporting LNG from Turkmenistan. This is a piped dream. The Pakistani State isn’t credible enough to deliver on long-term commercial contracts that deep investments in liquefaction entail. Even assuming that Sharif or a future regime in Islamabad won’t use the pipes to blackmail the world, infrastructure running all the way from Turkmenistan via Afghanistan’s eastern regions, and Pakistan’s own north-south, is a sitting duck for terrorists. An ocean of Australian LNG, not to mention East Africa, are an added risk to green-field processing in Pakistan.
“Gwadar holds no obvious and immediate economic benefits for Pakistan or China. China has stepped in to help Pak develop an alternative to Karachi, but more because Gwadar will always have more military significance than economic, unless Afghanistan stabilises and Gwadar can become a gateway to Central Asia. That does not seem likely in the near future,” says geo-strategist Sanjaya Baru.
That said, if fears on Gwadar can push us out of slumber, so be it. From available indications, stakes in Chabahar will be routed through Kandla and Jawaharlal Nehru ports, which operate as trusts. Kandla and JNP need their moment of truth without the accompanying domestic constraints.
Emulating ONGC Videsh on energy security, a ministerial body needs to resurrect the ‘Indian Ports Global,’ a vehicle we should have had long back, placing overseas bets via state-owned ports on the lines of PSA, DP World Dubai and Antwerp. If that happens, more than Manmohan Singh, we’ll have Nawaz Sharief and Xi Jingping to thank.
(The columnist is CEO & Co-Founder, India Strategy Group, Hammurabi & Solomon Consulting. Tweets @therohitbansal).
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