ISLAMABAD: Pakistan’s deep-sea port at Gwadar, pitched as the next regional transshipment hub, can contribute up to $25 billion to the country’s economy, an official said this week, as experts pointed to challenges that continue to limit its role in global shipping and trade.
Located in Pakistan’s southwestern Balochistan province, the port is the crown jewel of Beijing’s over $60 billion investment in China-Pakistan Economic Corridor (CPEC) projects in Pakistan and presents significant opportunities for maritime trade in the region, including giving access to landlocked Central Asia.
Pakistani officials, industry experts and lawmakers say that Gwadar’s geography — sitting just 87 kilometers from Iran’s border and close to the mouth of the Strait of Hormuz — offers rare advantages, though they differ on how quickly those advantages can translate into economic gains.
Gwadar Port Authority (GPA) Chairman Noor-ul-Haq Baloch says Gwadar has the potential to rival regional hubs like Dubai’s Jebel Ali, the world’s largest man-made harbor and the busiest container port in the Middle East, and Colombo, and to contribute $18–25 billion annually to Pakistan’s economy.
“Gwadar offers a unique advantage over other regional ports due to its land connectivity with Iran and Central Asia,” he said this week, adding that the port provides competitive tariffs and incentives such as free storage.
“It is strategically positioned and can serve as a cost-effective, less congested alternative.”
Commercial activity at the port is beginning to pick up, according to the official.
“Only one ship docked last year, but this year we have already received two vessels and expect five more in the near future,” Baloch said, adding that authorities were actively engaging shipping lines and traders in this regard.
Gwadar could fully realize its potential if supported by industrial zones, export facilities and a broader logistics ecosystem, according to the GPA chairman.
TECHNICAL LIMITATIONS
However, industry experts caution that technical limitations remain a major constraint in this regard.
Mohammed A. Rajpar, chairman of the Pakistan Ships’ Agents Association and former vice chairman of the Karachi Port Trust (KPT), said Gwadar is “not yet a true deep-water port.”
“Pakistan’s only deep-water port, at present, is Karachi’s Port Qasim, which has a draft of around 16 meters,” he said. “Gwadar’s designed draft is 14 meters, but it has not been maintained due to expensive dredging. Operationally, it is around 12.5 meters.”
That limitation effectively blocks large container vessels, according to Rajpar.
“Ships with a draft of 13 to 14 meters, which are standard for major container traffic, cannot dock at Gwadar,” Rajpar said. “If the mother vessel cannot come, the entire transshipment model becomes limited.”
Still, he stressed, Gwadar is not without utility.
“Breakbulk, general cargo, fertilizer, steel and project cargo can still be handled at current depth. But we must be realistic about what the port can and cannot do today,” Rajpar said.
“Countries like China or Japan could store oil in Gwadar and use it during crises. That potential has always been part of the master plan.”
‘MISSED OPPORTUNITIES’
Beyond technical issues, policymakers point to “missed economic opportunities.”
Ex-senator Kauda Babar Baloch, who hails from Balochistan’s Gwadar district, said the strategic value of the southwestern Pakistani port has long been understood but not fully leveraged.
“Since 2001, we have been telling the world that Gwadar is a natural gateway for transshipment and an energy corridor,” he said. “Its importance has increased even more in the context of developments around the Strait of Hormuz.”
While policy shortcomings have slowed Gwadar’s progress, it could still evolve into a regional energy hub if investments in refineries and storage facilities materialize, according to Kauda.
“Pakistan has not fully capitalized on Gwadar’s potential,” the ex-senator said. “We need tax exemptions and incentives to attract export-oriented industries, but these have not been implemented effectively.”
He also highlighted the untapped potential of trade with Iran.
“If sanctions ease and raw materials start coming from Iran, Gwadar could become a major industrial hub. That would reduce costs and attract investors from Karachi and Punjab to shift industries there,” Kauda said.
SECURITY CONCERNS, LACK OF HUMAN RESOURCE
Pakistan’s Balocistan’s province has been the site of a long-running insurgency that has intensified in recent years, with separatist and other militant groups frequently attacking security forces, government officials and interests as well as residents and people from other provinces.
These security, connectivity and human resource challenges further complicate the matters for Gwadar, where three members of Pakistan Coast Guards paramilitary force were killed in the first-ever attack on one of the PCG patrol boats in the Arabian Sea last week.
“Shipping is a real-time business. Frequent communication shutdowns and lack of trained local labor create uncertainty,” Rajpar said, pointing to operational challenges deterring global shipping lines from establishing operations in Gwadar.
“Without security, connectivity and skilled workforce, serious business cannot grow.”
However, the GPA chairman insisted that security arrangements are in place in Gwadar and the government has removed several policy and customs bottlenecks in recent interventions.
“The prime minister has formed a committee, and steps have been taken to facilitate trade,” Baloch said. “We have conveyed a clear message to shipping companies with attractive incentives and are hopeful of a positive response.”
