China finds another route to the Indian Ocean


The Singapore Port Authority’s decision to pull out of a 40-year contract to operate the new Gwadar deep sea port in southwestern Pakistan, now to be taken over by the Chinese, is causing consternation in India and the United States.

Located at the entrance of the Persian Gulf and about 460 km from Karachi, Gwadar has considerable geo-strategic significance. The growing rivalry between China and India, the continued unstable regional environment in the Persian Gulf following the Iran-Iraq and Gulf Wars and the emergence of the new Central Asian states have added further added to its importance.

The development of the port, in southeastern Balochistan, had already attracted considerable attention from the west because it was constructed with Chinese aid. Although not commenting publicly, US and Indian officials in particular regard it as a strategic expansion into the Indian Ocean and claim that China is intent on using the port as a naval base in its “string of pearls strategy.”

Gwadar, said a Hong Kong-based security analyst, “has long been stitched into China’s strategy of building or upgrading ports between Burma and West Asia, incorporating Sri Lanka and more recently the Seychelles. The reality is that Pakistan has been reliant on a single port, Karachi, since independence and Gwadar, close to the Iran border, offers quicker access to the booming Gulf countries as well as putting greater distance between its naval assets and India.”

SPA International, which operates 20 port projects across 11 countries, was awarded operational control of the Gwadar facility by former Pakistani President Pervez Musharraf in 2007. Islamabad was rumored at the time to have been pressured into allowing SPA to take over the port by the Pentagon so as not to upset Indian sentiments and simultaneously prevent Beijing from gaining heft in the region and influence over Islamabad.

However, friction soon developed between SPA and Islamabad due to the Pakistani government’s inability to free the port’s 236 hectares from the control of its navy. In addition, the Pakistani high court in October 2010 forbade its government from allotting the contract to a foreign company. The final straw was provided by the volatile security situation in Balochistan, which hindered SPA from investing the money it had promised for the development of the port and off-shore infrastructure.

The US-led war on terror, insiders say, also constituted a major hurdle for the development of the seaport. The Americans used the port to promote their own interests at the cost of Pakistan’s commercial ambitions in the region. Since the war on terror was being fought on Pakistan’s north-west frontiers with Afghanistan, located some miles away from the newly built port, the Pentagon was keen that it be retained as a military base support only. Apparently officials with the UAE, which operates ports in the region, also hindered Gwadar’s development to maintain Dubai’s hegemony.

The Gwadar port has already received a cash infusion of US$ 220 million from China. The port’s new operator will further invest another US$10 billion on the project. The Chinese-built first phase of includes three multipurpose berths of 602-meter quay length, one 100 meter-long service berth, and 4.35 kilometers of deep-water channel, alongside roads, operational craft and equipment and shore-based port buildings and facilities.

Analysts say China has plans to use the port as a linchpin for its global oil trade and may resuscitate a US$12-billion oil and refinery project around the port which fell through in 2009. Pakistan, say sources, has long been pushing for China’s takeover of the port to make it an oil pipeline hub for the region.

Strategically located between three important regions of the world: the oil-rich Middle East, the populous South Asia and resource-rich Central Asia, the port guards several important sea-lanes from Europe, Africa, East Asia, and the Pacific region through the Red Sea, the Strait of Hormuz and the Persian Gulf.

For Pakistan though, the port is endowed with enormous security and economic significance. It also marks the realization of Islamabad’s dream to own a world-class duty-free port and free economic zone a la Dubai.


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