Is CPEC Development Focus Shifting From Gwadar to Karachi?
China has agreed to invest $3.5 billion in Karachi, according to Pakistani and Chinese officials. In a separate announcement earlier, Saudi Arabia said it is moving its planned $10 billion petrochemical complex from Gwadar to Karachi. These announcements have triggered speculation that the focus of development of China Pakistan Economic Corridor (CPEC) is moving from Gwadar to Karachi.
|Karachi Port, Pakistan|
The Karachi project dubbed "Karachi Coastal Comprehensive Development Zone project" or KCCDZ includes additional new berths to Karachi port, development of a new fisheries port and a 640-hectare special economic zone near the port. The project also envisages building a harbor bridge connecting the port with the nearby Manora islands, according to Nikkei Asia.
|Gwadar Port City|
Saudi decision to shift the $10 billion petrochemical plant from Gwadar to Karachi was triggered by the fact that there is no oil pipeline nor a rail line planned to support it at Gwadar. Karachi already has well-developed roads, rails, telecommunications and pipeline infrastructure for connectivity with the rest of the country.
There are 10 submarine cables currently connecting or planned to connect Pakistan with the world: TransWorld1, Africa1 (2023), 2Africa (2023), AAE1, PEACE, SeaMeWe3, SeaMeWe4, SeaMeWe5, SeaMeWe6 (2025) and IMEWE. PEACE cable has two landing stations in Pakistan: Karachi and Gwadar. SeaMeWe stands for Southeast Asia Middle East Western Europe, while IMEWE is India Middle East Western Europe and AAE1 Asia Africa Europe 1. PEACE cable is the latest. It is a privately owned submarine cable that originates in Karachi, Pakistan and runs underwater all the way to Marseilles, France via multiple points in the continent of Africa.
|Gwadar East Bay Expressway, Pakistan|
China already has a lot invested in Gwadar. Krzysztof Iwanek, head of the Asia Research Center at Warsaw's War Studies University, told Nikkei that the challenges of developing a major port in an underdeveloped area like Gwadar must have been factored in by China from the outset. "[I]t may be assumed that Chinese involvement in Gwadar may be at least partially strategic. Karachi, in turn, is Pakistan's most important port, and, hence, Chinese involvement there may be of purely economic nature," Iwanek said.
My own view is that Gwadar remains very important to China for strategic reasons. Gwadar sits very close to the strategic Strait of Hormuz that is used by tankers carrying the bulk of China's and the world's energy imports. Karachi is the fastest and most economical route to making CPEC operational but it does not diminish the long-term importance of Gwadar for China.
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The plant will supply electricity to the national grid
In Sindh, the 330-megawatt Thar Energy Limited Power Project Block-II is being completed under China-Pakistan Economic Corridor or CPEC.
According to an official, the power plant would supply electricity to the national grid under a 30-year power purchase agreement.
According to APP news agency, the power plant is a 330MW mine-mouth lignite-fired power project being built by Thar Energy, which is owned by the Hub Power Company or Hubco, China Machinery Engineering Corporation or CMEC and Fauji Fertilizer Company or FFC.
Similarly, two more coal-fired power plants, Engro Thar Block II power plant and Thal Nova, are also being developed in Thar Block II.
Engro’s Thar Block II power plant is a coal-fired power station in Sindh’s Tharparkar district. It was Pakistan’s first power plant to use the indigenous coal reserves of Thar.
The 660MW power plant, which was part of CPEC, was developed by Engro Powergen Thar or EPTL, a joint venture of Engro Powergen or EPL, CMEC, Habib Bank, and Liberty Mills. Construction on the Engro Thar Block II power plant commenced in April 2016. Trial operations at the plant began in July 2018 while commercial operations began in July 2019.
The coal-fired power plant is located five kilometres away from Thar Block II near Thar coalfields. It consists of two 330MW units, which integrated circulating fluidised bed or CFB boilers, tandem compound steam turbine units, and generators. CFB is an ideal option for the low-calorific-value Thar lignite coal.
It helped to regulate the plant’s environmental footprint by reducing nitrogen oxide emissions and capturing sulphur oxides. The 20kV, 50Hz, three-phase intercooled generators featured a hydrogen-cooled rotor and stator core, as well as water-cooled rotor windings.
The power plant is also equipped with associated equipment and systems such as cyclones, air pre-heaters, and water walls. Sindh Engro Coal Mining Company or SECMC supplied nearly 3.8 million tons per annum of coal for the coal-fired power plant from a new opencast mine.
The SECMC is a joint venture by the government of Sindh and Engro Powergen. The joint venture was formed for extracting coal available at the seventh biggest coal mine site in the Thar Desert.
The new coal-fired power plant fed electricity to a 500kV double-circuit transmission line of the grid network between Thar and the Hesco grid station in Jamshoro. The estimated cost of the Engro Thar power plant was $995.4 million – funded by a syndicate led by China Development Bank with the support from China Export and Credit Insurance Corporation.
The syndicate included Habib Bank, United Bank, Bank Alfalah, National Bank Pakistan, Faysal Bank, Construction Bank of China, and Industrial and Commercial Bank of China.
ThalNova is a similar 330MW power plant being developed in the same block. The financial closing for the power plant was achieved in September 2020 and the commercial operations are scheduled to begin in 2022.
A top Pakistani official has said that a proposed $3.5 billion coastal development project in the port city of Karachi is part of the China-Pakistan Economic Corridor, denying that the focus of the multibillion-dollar project was being shifted from Gwadar to Karachi.
Gwadar, in the southwestern province of Balochistan, is the crown jewel of China’s more than $60 billion CPEC investment in Belt and Road Initiative projects in Pakistan. The plan was to turn Gwadar into a trans-shipment hub and megaport to be built alongside special economic zones from which export-focused industries would ship goods worldwide. A web of energy pipelines, roads and rail links would connect Gwadar to China’s western regions.
However, growing insecurity and a rise in attacks by militants in Balochistan has rattled China, which has publicly demanded that Pakistan improve security for Chinese workers. Nine Chinese were killed this year in northwest Pakistan in an attack on a bus carrying them to a construction site. In a separate attack, a convoy of Chinese officials was targeted by a suicide bomber in Gwadar.
Thus, the announcement last month by Pakistan and China to include the Karachi Coastal Comprehensive Development Zone in the CPEC framework unleashed frantic speculation that the corridor project was being moved from the deep-sea port in the volatile Balochistan province.
“CPEC is not moving from Gwadar to Karachi,” Syed Ali Zaidi, the country’s maritime minister, told Arab News in an exclusive interview on Monday. “Rather, the corridor project is moving into Karachi in addition to Gwadar and is expanding its framework, which is great for us.”
“It (CPEC) is going to develop a whole new district in Karachi, which is going to be a state-of-the-art district equipped with technology and all modern infrastructure,” he said.
Elaborating on the financing plan for the project, he said that the $3.5 billion Chinese investment was not a loan or a grant, but the project was a partnership between a Chinese state-owned enterprise and the Karachi Port Trust, which owned the land.
“$3.5 billion will be invested to develop infrastructure where the KPT and (the Chinese) investor both will make money,” Zaidi said. “Instead of a loan or a grant, we have decided to do a win-win project, which means that people who are investing will also make some returns.”
The maritime minister said that the project would add four more berths to the targeted coastal area, providing greater depth to Pakistan’s expanding maritime sector and creating space for cruise ships to dock.
“We will build four berths maybe for cruise ships, and if we build for cruise ships there may be some hotels around it and this all has to be backed by real estate development,” he said. “But the real estate development is not the primary objective; the primary objective (is) to fix our marine environment and, on the top of it, build state-of-the-art modern infrastructure.”
A state-of-the-art fishing port would also be built, Zaidi said, along with a world-class fisheries export processing zone.
“A water treatment plant at the mouth of Lyari River would be built to improve marine ecosystem and reduce pollution in the Arabian Sea,” the minister said.
Zaidi said that the coastal development plan would also benefit the poor slum of Machar Colony in the area, mostly inhabited by the Bengali and Burmese communities: “We have decided to make 20,000 to 25,000 apartments in accordance with Prime Minister Imran Khan’s vision to promote low-cost housing to give respectable living (conditions) to our people.”
ISLAMABAD: The recent inclusion of the Karachi Coastal Comprehensive Development Zone (KCCDZ) project in the China-Pakistan Economic Corridor (CPEC) will boost Pakistan’s economy and enhance industrial and development cooperation between Pakistan and China, said experts and officials.
The decision to include the project in Karachi into the CPEC was made at the CPEC’s recent 10th Joint Cooperation Committee Meeting.
Covering a total area of about 930 hectares, of which 640 hectares are reclaimed, the environment-friendly KCCDZ envisages four new berths for the Karachi Port Trust (KPT), according to a statement from the Ministry of Maritime Affairs of Pakistan.
The mega project, being built with an expected investment of $3.5 billion, will also house a state-of-the-art fishing port, with a world-class fisheries export processing zone to boost the country’s trade potential, said the ministry.
It will also drastically improve the marine ecosystem and reduce pollution with the establishment of a water treatment plant, the ministry said.
Terming the project a game-changer for Pakistan, Prime Minister Imran Khan recently said the coastal development project will bring Karachi on a par with developed port cities of the world.
The project will present opportunities for investors, he said on Twitter, adding that it will also help clean up marine habitats for fishermen and develop 20,000 low-income housing units.
The KCCDZ is the first of its kind under the CPEC, which reflects the commitment of Pakistan and China to forge high-quality cooperation to improve people’s livelihoods, Minister for Maritime Affairs Ali Haider Zaidi told Xinhua.
“As all-weather strategic cooperative partners, China and Pakistan are stepping up cooperation in various sectors, giving impetus to the growth of bilateral relations, economic and social development of the two countries,” the minister said.
Speaking to Xinhua, Syed Hasan Javed, director of Chinese Studies, School of Social Sciences and Humanities at the National University of Science and Technology in Islamabad, said the KCCDZ is a 21st-century modern project replete with the latest technologies, town planning, urban infrastructure, municipal amenities and environment-friendly marine development.
“It will take Pakistan’s economy to the next level of prosperity by attracting foreign direct investment, generating employment and revenue, boosting exports and promoting regional and global connectivity,” Javed said.
FDI in the fiscal year that ended in June was also markedly down. Excluding fiscal 2019, which included a general election, the inflow totaled $757 million -- the least seen since 2015. In most years, Chinese FDI is 30-50% of the total, so the downward turn is a warning light for the economy.
The Chinese slowdown is also evident in Pakistan's trade figures. United Nations' data shows that China's exports to Pakistan have been declining since a $15 billion peak in 2017. There is a clear downward trend in manufactured goods and materials; iron and steel -- both crucial to infrastructure development -- fell steadily by 40% overall between 2016 and 2020.
The discord is not new, but generally kept behind closed doors. China's displeasure has, however, occasionally been leaked.
Around early 2019, Yao Jing, the Chinese ambassador, met in Quetta with officials from the Balochistan provincial government. Although it was never officially confirmed, he was extremely critical. "You people are not taking seriously the delays in the issuance of permission to a Chinese company to start working on a coal-fired power plant in Gwadar," he said.
Such rifts between the two sides have become more evident, and led to reduced Chinese investment and exports to Pakistan.
Islamabad is alarmed by the costliness of Chinese projects. Tabish Gauhar, Pakistan's special assistant to the prime minister on power and petroleum, stated in cabinet in August that a CPEC power project is 25% more expensive than the international norm.
"The Chinese ambassador has complained to me that you have destroyed CPEC, and that no work was done in the past three years," Saleem Mandviwalla, chairman of Senate Standing Committee on Planning and Development, said at a September committee meeting after Chinese diplomats and officials defended the 135 Chinese companies operating in Pakistan.
"China has become more cautious in general and with regard to Pakistan," James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies in Singapore told Nikkei. "As many investors do, they look more at the return on investment than they did before."
Dorsey believes the turning point for China came in early 2020 with the COVID-19 pandemic and continuing trade disputes. He believed another significant reason to be the growing number of foreign governments failing to keep up with repayments.
Other factors may be playing into the slowdown, power generation being a good example. With its new plants online, Pakistan's installed capacity has reached almost 40,000 megawatts while peak electricity demand is 25,000 MW.
China and Pakistan remain bonded by their perception of India as a common enemy. China wants a friendly neighbor to its south, while Pakistan seeks the blessing of a global power that is not transactional like the U.S.
Can Pakistan re-energize Chinese interest and investment? One Pakistani official believes not.
"With the end of the early harvest phase of CPEC, China-led infrastructure development has peaked in Pakistan," a government official told Nikkei on condition of anonymity.
"CPEC is not over yet, but in the remaining nine years, we can't expect to see even a fraction of the infrastructure development that took place between 2015 and 2020," he said.
Pakistan is working to boost the capacity of its shipping fleet to draw on its strategic geographical position and help tackle the effects of a global supply chain crisis, the country’s maritime minister told Reuters.
Pakistan has a coastline of over 1,000 kilometers (621 miles) and three major ports, including Karachi. It is two days sailing time from destinations in Africa and the Middle East and its western shoreline is close to the Strait of Hormuz oil chokepoint.
A surge in demand for retail goods from people stuck at home under pandemic-related lockdowns and logjams impacting the supply of container ships and boxes to transport cargo have led to bottlenecks around the globe, which are set to continue into 2022.
Pakistan's Federal Minister of Maritime Affairs Ali Haider Zaidi said the country is in negotiations "through a public private mechanism to create joint ventures to expand into container shipping".
"The supply chain problems are faced by everyone and Pakistan is also affected. There are issues everywhere and this is one of the ways we are trying to deal with this longer term," he said on a visit to London.
The state-controlled Pakistan National Shipping Corporation has a fleet of 11 ships including oil tankers and dry bulkers and has issued a tender for another four ships, Zaidi said.
Pakistan would initially charter space on container ships "and test the market before we start discussion on how many (container ships) we acquire," he added.
Pakistan was also seeking to develop as a port hub for landlocked central Asian countries, Zaidi said, and that it was vital critical supplies reached neighboring Afghanistan after the Taliban's victory in August.
"The world and the financial superpowers cannot and should not abandon Afghanistan. If they do, it will be a catastrophic humanitarian (crisis)," he said. "It is our moral obligation to help them."
U.N. agency UNCTAD said in November smaller countries are expected to feel the most impact from the higher costs of importing goods.
by Arif Rafiq
Rather than transforming this isolated Pakistani city, China’s Belt and Road Initiative has only created great expectations and even greater disappointment. Ultimately, the responsibility for this failure lies on the Pakistani state, which adopted a fundamentally flawed strategy ill-suited for Gwadar, built on a series of assumptions that have been proven to be incorrect.
For starters, Pakistan assumed that Gwadar was absolutely vital to Chinese interests, especially in helping Beijing overcome its reliance on energy imported via the Malacca Strait. But as a 2020 U.S. Naval War College study makes clear, Chinese analysts generally see a Pakistan-based overland energy pipeline to Xinjiang as economically unviable. And there is even some pushback in China’s strategic community on whether it really faces a “Malacca dilemma.”
These perspectives rarely make it into Pakistan’s domestic discourse on China. One reason for this is that Pakistan lacks independent China experts, despite its close strategic partnership with China. Most Pakistani commentators—some of whom are paid by Beijing—stick to the official script. It’s no wonder Pakistani officials are then left blindsided when Beijing’s policy priorities and risk appetite shift.
A second reason: Pakistan—like Djibouti, Kenya, and Sri Lanka—assumed that China’s Shenzhen or Shekou model is not only replicable but also plug and play. This discounts the fundamentally different natures of the Chinese and Pakistani states. China is an authoritarian, hierarchical, developmental state. Pakistan is a semi-democratic, disaggregated rentier state marred by criminality and incompetence from the top down.
The Pakistani state simply lacks the will to create value in the global economy. It is largely focused on extracting from its populace and foreign donors. And it dithers on any sort of policy reform. In the case of Gwadar, it took years for Islamabad to simply pass into law tax exemptions for the port and free zone that are key to attracting foreign direct investment there.
Third, Pakistan’s trickle-down strategy for Gwadar is inappropriate for Balochistan. To begin with, there’s been little economic growth in Gwadar to actually trickle down to locals. And the province, which is Pakistan’s poorest but also home to its oldest and largest natural gas field, has been hit by multiple secessionist insurgencies since Pakistan’s founding, driven in part by resource nationalism. Separatist terrorist groups have also targeted Pakistani nationals from other provinces, including teachers, deemed as “settlers.”
But insensitive claims of an imminent influx of Chinese nationals, including by a luxury real estate developer in 2017, intensified Baloch fears they would be displaced by outside capital and labor in Gwadar. Those specific fears may be unfounded. But instead of an influx of foreign residents, Gwadar is seeing a surge in fishing trawlers from the neighboring Sindh province and China, whose massive hauls are destroying local incomes.
The original plan for Gwadar under CPEC did contain some admirable social sector projects. For example, China has funded the expansion of a middle school and established an emergency medical center in Gwadar. But these are just drops in the bucket for an area with a population close to 100,000 in 2017. Major projects—including a vocational training center, medical hospital, and desalination plant—have either been delayed, scaled down, or dropped. Given Balochistan’s fraught history with Pakistan’s central government, Islamabad should have front-loaded projects that would have provided basic services, especially clean water.
by Arif Rafiq
Fourth, Islamabad structured its plans for Gwadar based on an incorrect assessment of the city’s natural advantages. It has envisioned Gwadar as a “gateway port” serving the hinterland of Pakistan, Afghanistan, other countries in Central Asia, and Xinjiang. But given its isolated location, Gwadar stacks up poorly in terms of cost and efficiency when compared to regional competitors, including Pakistan’s own Karachi and Qasim ports.
The Gwadar port, however, can be dredged to a depth of 20 meters, making it a potentially viable location for transshipment—allowing very large, cost-efficient vessels to offload cargo to be loaded on to smaller ships servicing shallower regional ports. Indeed, the consulting firm that developed the original master plan for the port assessed that transit trade with the Central Asian republics via Gwadar had “little potential” but that there were decent prospects in the longer term for transshipment.
Finally, Pakistan’s top-down political model in Gwadar doesn’t work. Protests in 2018 by fishermen against an expressway that cut off their access to the sea made clear that locals were afterthoughts in the design of key infrastructure projects. Gwadar’s fishermen once again taking to the streets indicates a failure of the political process to address their needs. They simply do not trust the government.
Last week, in a Twitter Spaces discussion, Balochistan Provincial Minister Zahoor Buledi noted that he had held five or six meetings with protest leader Maulana Hidayat ur Rehman Baloch of the Jamaat-e-Islami party. But the maulana (an honorific given to Islamic clerics) and other participants in the session felt promises made to them would not be fulfilled once the protests stopped and media cameras went away and suggested that some corrupt officials were acting in connivance with various “mafias.”
The reflex of the Pakistani state—particularly in Balochistan, where enforced disappearances by security forces are rampant—is to respond to large-scale protests and unrest with intimidation and, sometimes, violent coercion. Given New Delhi’s hand in the Baloch insurgency, which has conducted high-profile attacks in Gwadar in recent years, the opportunistic, heavy coverage of the protests by state-aligned “private” Indian news outlets also triggers the anxieties of the Pakistani security services. But these protests are simply an organic reaction by Gwadar’s people to the endangerment of their livelihoods and the failure of their own state to respond to their basic needs.
The cries of Gwadar protestors should serve as a wake-up call for Islamabad. While terrorist attacks, including a 2019 assault on Gwadar’s only major hotel, serve to deter foreign investment, a heavy security crackdown will only further alienate locals and compound the problem. Islamabad needs to break out of the cycle of violence by developing a new strategy to win the peace in Balochistan.
That strategy should include several specific elements. For one, Islamabad and the Balochistan provincial government need to develop a political framework to include locals in the developmental design process, city governance, and security services. They should also fast-track large-scale desalination projects to better address local water demand. The current water strategy centers on dams—an unreliable source of water for an area hit by drought.
To counter Baloch fears of resource plundering, CPEC needs a strong redistributive policy for southern Balochistan. Islamabad and the provincial Balochistan government in Quetta city should create a wealth fund for natives of Gwadar and the Makran coastal region, providing them with an annual basic income sourced from royalties on energy and mining industries and taxes on luxury real estate and tourism.
“I will grow up to become a doctor. I want to travel around the world and show them what we are capable of,” declared Habiba Qadir, a student of China-Pakistan Gwadar Faqeer Middle School, in an interview with the China Economic Net.
The China-Pakistan Economic Corridor (CPEC) reached an important milestone on November 13, 2016 with the first shipment of trade cargo from Gwadar Port to international destinations.
Five years on, Gwadar Port has entered 2022 with hope, determination and achievement.
“For those who have visited it before, they do realise that there has been a lot of development here,” Gwadar Port Authority Chairman Naseer Khan Kashani pointed out while reviewing the five-year journey of Gwadar Port.
Reaching to a bigger world
Gwadar has made huge progress when it comes to port operation and port economy.
“According to our plan, Gwadar will become the logistics hub in this region within five years,” China Overseas Port Holding Company (COPHC) Chairman Zhang Baozhong said confidently.
There had been no single commercial shipping line connecting Gwadar Port for the past 10 years, and the port merely relied on government-diverted cargo with huge subsidised road transport, noted Baozhong.
But things have changed since COPHC took over the port and infrastructure improved, especially when Afghan transit cargo started going through Gwadar Port on January 14, 2020.
In spite of the negative Covid-19 pandemic impact on business development, more than 100,000 tonnes of Afghan cargo have been handled at the port.
“LPG (liquefied petroleum gas) ships and bulk cargo vessels can be seen coming frequently,” he underlined.
All these activities not only generated a lot of business opportunities for Pakistani stevedoring companies, transporters, customer clearance and many others, but also helped stabilise supply to Afghanistan and other landlocked countries in Central Asia.
Talking about Gwadar Free Zone, the first modern industrial park in Pakistan, Gwadar Free Zone Manager Dadaullah Yousuf said that until now 46 enterprises have been registered for investment in the free zone, mainly covering logistics, warehousing, halal food processing, agriculture, textile, etc.
Right now, Gwadar Free Zone phase-1 has been successfully completed, while work on the much larger phase-2, covering an area of 2,221 acres, has been started.
“More and more investors are showing keen interest in investing here,” Baozhong said.
Development benefits local community
The development of the economy relies a lot on people, and it also empowers people to lead a better life. Education, first of all, is the foundation.
China-Pakistan Gwadar Faqeer Middle School, donated by China Foundation for Peace and Development, has been in operation for five years with the sponsorship of COPHC.
Now, this school is one of the best in Gwadar. More than 700 boys and girls are attending the school to receive education.
Naseem Ahmad, descendant of land donator and teacher at China-Pakistan Gwadar Faqeer Middle School, told the China Economic Net that after the school had been made, the locals got more development programmes, and real estate and businesses have increased.
“We can say that this school has contributed as an integral part of our area.”
Port boosting local employment
“Almost 80% of our workers are locals,” Muhammad Saleem Butt, Head of Gwadar Port Operations GITL, told the China Economic Net.
“Actually almost 90% of our local staff was only capable of, maybe, the watchman job when they first came here,” noted Zing, Office Manager of China Business Centre in Gwadar, adding that there were not too many schools nor technical agencies in the city.
The Green Line Bus service has become fully operational, 80 buses could be spotted moving around from 7am till 10pm.
The service was fully started recently. Inside the entrance, one will have to head downstairs to a two level basement and will find the ticketing area on a first level. Moreover, one can buy tickets in two ways one of which is going to the ticketing booth and pay Rs 55 for a ticket for whether you are travelling to the station ahead or to all 22 stations.
However, another better and economical way is to buy a Rs 100 card which can be topped up. As you reach a station to get off, the machines there will deduct your fare as per kilometre of your travelling.
During the first three days of the service going fully operational, a total of 81,000 passengers benefited from the service. 20,000 travelled on the very first day, followed by 29,0
Several terminals for freight service planned: Swati
• Says Railways will become profitable within six months
KARACHI: The huge and powerful dark green locomotive attached to a long line of big and small freight containers awaited the inauguration ceremony to be off on its way at the Hutchison Ports Pakistan, also known as the South Asia Pakistan Terminal, on Monday.
Then as soon as the ribbon was cut, it honked loudly while making the slouching guests sit up straight in their chairs as it chugged away on its new ballastless tracks. Expected to take away the traffic congestion caused by container trucks on roads and highways here, this freight train will reach its destination, Lahore, in up to four days.
The freight train service also coincides with the commissioning of a 3.7km, high-tech train track laid at the Hutchison Ports Pakistan connecting the facility to the rest of the country in a seamless manner through Pakistan Railway’s extensive network spread throughout the country.
This new track laid within the terminal comprised three rail sidings of 700 metres each alongside a crippled wagon sliding. The tracks are embedded in concrete and are ballastless, which is a better, albeit a more expensive option than the traditional sleeper/ballast design used in Pakistan. Switching between the tracks and signalling is carried out using a computer-based interlocking system, eliminating the need for manual switching. As many as three freight trains can be handled simultaneously using rubber-tyred gantry cranes with a quick turnaround. Another track can also be added.
Captain Syed Rashid Jamil, general manager and head of business unit at Hutchison Ports Pakistan, said that with the commencement of the freight train service, they were expanding their contribution towards Pakistan’s trade. “We are extending our physical gates to somewhere in Multan, Sialkot and Lahore as the containers will be discharged from the ships and put on a train that will deliver them to the customers at their factory gates,” he said.
“Karachi needs to be an international standard business hub. Pakistan’s entire business, its industry, its trade all come from here. It only needs good governance to transform this city and this country,” he said.
The federal minister announced they needed to work at connecting Port Qasim Authority with this freight train service too. “We should also be transporting coal and oil via railway,” he said.
Sindh Governor Imran Ismail said port cities across the world were responsible for their country’s prosperity and Karachi was a port city.
Earlier, Pakistan had its flag-carrier PIA, Railways and Pakistan Steel Mills to be proud of, the governor said, “but now PIA is running losses, the Pakistan Railways is running losses and the Steel Mills happen to be a burden on the exchequer. It is so because our country fell in the wrong hands”.
“But now we have people like Railways Minister Swati and Minister for Maritime Affairs like Ali Zaidi, who are powerful pillars. They are doers. [PM] Imran Khan has chosen the best people in his cabinet. We were labelled as incompetent in our first year of governance but we kept working with the uplift of economy as our main focus despite the Covid-19 pandemic and now Imran Khan is the first prime minister in years to have completed the longest term in office,” he said.
PSO, Railways ink MoU
In a related development, Pakistan State Oil (PSO) signed a Memorandum of Understanding (MoU) with Pakistan Railways for the supply of POL products, transportation and other businesses.
THE Pakistan federal government has approved a proposal for the construction and operation of the Karachi Circular Railway (KCR) using a public-private partnership (PPP) model.
Construction of the 43km double track line is expected to take around three years, and will cost Rs 220 billion ($US 2.92bn).
Mr Asad Umar, minister for planning, development and special initiatives chaired the PPP Authority Board meeting in Islamabad on January 25, where the proposals were reviewed.
Under the proposal, the private sector will finance the construction, civil works, electrical and mechanical works, as well as the operations and maintenance of the KCR.
The Pakistan government will provide capital viability gap funding in order to improve the financial viability of the project. This is expected to be around Rs 80-90bn which would be provided in the first three years of the concession being operational.
The PPP Authority Board also decided that the railway board would be requested to make 13 properties on the route available for lease for 99 years. This is designed to meet the initial financing since the profit will ultimately go to Pakistan Railways (PR).
The KCR is expected to serve 457,000 passengers per day when it opens, and this is expected to rise to one million by the end of the initial 33 year concession period. Electric trains will operate on the railway for 17 hours each day.
Asad said that KCR is an important part of the Karachi transformation plan and will play a pivotal role in providing an affordable and reliable public transport system.
During the meeting ahead of the Organization of Islamic Cooperation (OIC) on Tuesday, Wang said that China is willing to work with Pakistan to further synergize their development strategies, conduct systematic exchanges on governance experience and improve long-term cooperation plans. Noting that the Pakistan-China relations are at their best in history, Qureshi described that Pakistani Prime Minister Imran Khan's recent visit to China was very successful, and the leaders of the two countries have reached a large number of important consensus, Xinhua News Agency reported.
The Pakistan-China friendship is the cornerstone of Pakistan's foreign policy, he said, adding that as all-weather strategic partners, Pakistan and China have stood together through thick and thin, helped and supported each other, as well as stood firmly together at critical moments. The Pakistani side stands ready to work with China to implement the consensus reached between the leaders of the two countries, and expand practical cooperation in various fields including agriculture, economy and trade, finance and information technology, Qureshi said while calling for increased investment from China to help push Pakistan's industrialization process, Chinese news agency said.
It further reported that Wang said that the Pakistan-China All-Weather Strategic Cooperative Partnership is unique and time-tested, and the two countries have become good neighbours, good friends, good partners and good brothers who trust each other. The traditional friendship between China and Pakistan is rock-solid, which is a precious treasure for both sides, he added. China hopes that Pakistan will get more deeply involved in China's new development landscape with a further convergence of interests, Wang said.
China is willing to expand imports from Pakistan and support Chinese enterprises in investing in Pakistan, so as to help Pakistan enhance its capacity of independent development. Qureshi welcomed Wang who had come over to attend the 48th session of the Council of Foreign Ministers of the Organization of Islamic Cooperation (OIC), saying that the first time participation by a Chinese foreign minister in the meeting is of historical significance, which shows China's support for Pakistan and that China attaches great importance to Islamic countries.
As an OIC founding member, Pakistan is willing to push the OIC to deepen its friendly ties with China, he said, according to Xinhua News Agency. Wang arrived in the Pakistani capital on Monday to attend the 48th session of the Council of Foreign Ministers of the Organization of Islamic Cooperation. (ANI)
Read more: https://www.al-monitor.com/originals/2022/04/saudi-arabia-pakistan-work-long-term-business-strategy#ixzz7PVFlPNsl
Meeting on the sidelines of the Tashkent International Investment Forum last week, the chairman of Pakistan’s Board of Investment (BOI) and minister of state, Azfar Ahsan, and the Saudi Minister for Investment, Khalid Al-Falih, discussed options for promoting bilateral investment.
According to the official statement issued by Pakistan’s investment board, “It was agreed that shovel-ready projects, including the expansion project of Pakistan Refinery, will be evaluated by the Saudi government.”
In 2019, the kingdom had announced plans for a $10 billion oil refinery at Gwadar port, but logistics issues hampered the project. A 600-km oil pipeline connecting Gwadar to the main oil hub, Karachi, would be needed to make the Saudi investment worthwhile, and — according to the feasibility report prepared by Aramco — the transportation of processed oil from Gwadar would be too expensive even then.
This time, Saudi Aramco will be kicking off “preferred projects” in Pakistan’s oil refinery sector, and the expansion of a decades-old refinery in Karachi is most likely. Next, Saudi investors will receive some exceptional incentives in special economic zones in Pakistan. According to the BOI chairman, several proactive measures have been taken to facilitate investment.
“Saudi Arabia and Pakistan are historically close allies," Mohammed Alhamed, president of the Saudi Elite Group, told Al-Monitor, "and Riyadh’s investment comes to make Pakistan’s economic development stable and strong.”
Agriculture, mining, renewable energy, food processing, refineries, petrochemicals and information technology have been identified as potential areas of investment. Proposing a joint BOI-NCPP team for finalizing projects in Pakistan, Falih also suggested that the Pakistani side visit the kingdom and market investment projects both from the public and private sectors.
Alhamed said, “The Saudi investments in Pakistan today are an example of a power, security and economic partnership which will lead to shared prosperity, regional stability and mutual respect based on long term-investment, strategic and social ties.”
Despite a gradual increase to around $2.181 billion in 2020, low bilateral trade volume still remains a major shortcoming in Saudi-Pakistan relations. However, nearly 2.5 million Pakistani expats live in the kingdom, which is still Islamabad’s largest source of remittances.
Without strong bilateral economic connections, the Saudi-Pakistan relationship is incomplete. Even though it was once described as “probably one of the closest relationships between any two countries” by the former head of Saudi intelligence, Prince Turki bin Faisal, it has been affected by regional issues in recent years.
Pakistan adopted a neutral stance in the Yemen war and refused to send any troops in response to the kingdom’s request in 2015, as it was trying to balance Saudi Arabia and Iran.
Then in August 2019, India abrogated Article 370 and ended the special status of the disputed part of Kashmir valley in its control. As one of the three claimants in the Kashmir issue, Pakistan felt that the cause was not highlighted by the Saudi-led Organization of Islamic Cooperation (OIC), of which it is a founding member since 1969.
Next, in November 2019, Qatar, Turkey, Iran, Pakistan and Malaysia organized an Islamic summit in Kuala Lumpur without Saudi Arabia, which feared a rival bloc of Muslim countries outside the OIC, which it heads. Pakistan’s Prime Minister Imran Khan had planned to attend the event but backed out at the last minute due to Riyadh’s insistence.
GWADAR, Pakistan, June 5 (Xinhua) -- The inauguration ceremony of the China-aided Eastbay Expressway of Gwadar port was held on Friday in Gwadar city of Pakistan's southwest Balochistan province.
As an important early harvest project under the China-Pakistan Economic Corridor (CPEC), the 19.49-km expressway was officially started in 2017 by the China Communications Construction Company, with an aim to meet the urgent need of the locals in Gwadar and promote the sustainable development of the area.
Addressing the ceremony, Pakistani Prime Minister Shahbaz Sharif thanked China for the grant and said that China has built a very high-quality expressway which links the port to the coastal highway ahead.
It will enhance connectivity and help the transportation of goods from the port all the way to the country's southern port city of Karachi in the future, said the prime minister.
"Pakistan is determined to speed up the development of Gwadar," Sharif said, adding that China has donated solar panels to thousands of families in Gwadar, aided the construction of a hospital and other livelihood infrastructures, and will fund a desalination plant.
On the same occasion, Pang Chunxue, charge d'affaires of the Chinese Embassy to Pakistan, said China attaches great importance to people's livelihood in Gwadar, and is willing to continue promoting the development of Gwadar's healthcare, education, vocational and technical personnel training and other livelihood fields.
Pang said the construction of the expressway aims to benefit the local people, and the concerns of local fishermen were fully considered in the design and construction.
China will strive to continue to help solve local people's problems such as shortage of electricity and fresh water, and promote the construction of a smart, green and modern Gwadar Port, so that local people can share the high-quality development of the CPEC, Pang said.
"It is our joint efforts that ensured the successful delivery of this CPEC project in Gwadar."
"When the New Gwadar International Airport is completed in the future, it will work with the Eastbay Expressway to promote Gwadar as a regional transportation hub and create a better life for the local people," Pang added. ■
The airport's 4C, 4D, 4E, 4F... are the flight zone levels, which are represented by numbers + letters. The number indicates the length of the runway, and "4" indicates 1800 meters or more. The letters indicate the wingspan and wheelbase of the aircraft that can take off and land, from A to F, the larger it becomes.
Karachi Airport Certified for Aircraft Operation up to Aerodrome Reference Code 4E
Islamabad Airport has been certified for aircraft operation up to aerodrome reference code 4F that allows Airbus A380 flight operations.
The purpose of this AIRAC AIP Supplement is to notify the aviation industry of the aeronautical
ground facilities, navigational equipment and services that are available at Islamabad Int’l airport for
aerodrome reference code 4F Cargo / Commercial Operations. The airport is located at a distance of
14.08NM from Islamabad city.
Karachi is an ideal place to locate for Ecommerce & Retail, Transportation and Marketing & Sales startups. As the most popular industries in Karachi, there is a sample of 12 Ecommerce & Retail startups in Karachi, 10 Transportation startups in Karachi, and 8 Marketing & Sales startups in Karachi, on the StartupBlink Map.
On the StartupBlink Global Startup Ecosystem Map there is also a sample of 53 startups in Karachi, no accelerators in Karachi, no coworking spaces in Karachi, no organizations in Karachi and no leaders in Karachi.
StartupBlink ranks the startup ecosystems of 100 countries and 1,000 cities. Download our latest Global Ecosystem Report.
Karachi has been ranked among South Asia’s top ten start-up-friendly cities by the startup ecosystem rating website, Startup Blink, in its 2022 report.
Pakistan’s port city has broken India’s monopoly on the list by jumping up four ranks within a year to join the top ten cities.
While the other 9 cities are all in India, Karachi has reportedly surpassed Pakistan’s top city, Lahore, this year, as well as other cities that are considered to have startup-friendly environments.
However, on a global level, Karachi’s ranking has dropped by five places and is now at number 291.
Meanwhile, Lahore fell 48 places to the 305th rank internationally this year. Islamabad was ranked third in Pakistan and dropped one rank to 438th on the global list.
Overall, Pakistan’s ranking as a favorable environment for startups decreased by two places and it stood 76th globally.
It was also ranked second in South Asia and fourth among the Central Asia Regional Economics Corporation (CAREC) countries.
The report detailed that successful start-ups and digitization are of prime importance in Pakistan’s economic development.
Digital entrepreneurship and investment in startups got a boost in Pakistan during the pandemic, and startups were supported by improvements in broadband coverage and digital infrastructure, and a new framework for digital payments. Local IT companies also received tax incentives and exemptions through Special Technology Zones.
Pakistan has come a long way to strengthen its legal framework to promote digitization, according to the report, but still needs clarification on taxes and incentives for local investment.
The country’s climate of political chaos hinders the creation of stable policies and an environment of trust to actually strengthen its startup ecosystem, Start Blinkup detailed. Apart from this, increasing capital demand for emerging startups and the supply of experienced manpower are also causing concern.
To meet these needs, it is necessary for Pakistan to increase the capacity of the startup ecosystem to provide qualified and trained manpower amid the growing demand for capital for emerging start-ups.
ISLAMABAD -- A company from Oman is looking to invest in a train line that would link the Pakistani port town of Gwadar -- envisioned as a key stop on China's Belt and Road infrastructure network -- with Pakistan's main railway system.
The proposed multibillion-dollar project could go a long way toward resolving the seafront city's lack of rail connectivity. It also conjures up the past of Gwadar, which was part of Oman for 175 years. But at the same time, Pakistan's turbulent political situation is casting doubt on the prospects for pushing the plan forward and realizing the port's potential.
Earlier this month, officials from Anvwar Asian Investments, an Omani project financing firm, met with officials of Pakistan's Board of Investment and expressed interest in building a 1,087-kilometer railway between Gwadar and Jacobabad in central Pakistan. The investment would be worth $2.3 billion, and the Omani side says it is ready to provide an immediate tranche of $500 million as initial financing, according to the BOI.
Many see the plan as fitting, given the history that binds Gwadar with Oman -- about 450 km away, across the mouth of the Gulf of Oman.
In 1783, the ruler of what was then Kalat State -- now Balochistan -- gifted Gwadar to Oman's Taimur Sultan, a defeated prince on the run, who later mounted a comeback and reigned as sultan in Muscat. Gwadar remained part of Oman until roughly a decade after Pakistan's inception, when Islamabad purchased it in 1958 with British help.
Many of Gwadar's older residents still have Omani nationality as well.
Nasir Sohrabi, president of the Rural Community Development Council in Gwadar, said Oman has been the primary overseas destination for the people of Gwadar, even after the town became part of Pakistan. "Plenty of people from Gwadar live in Oman and do business or work as employees in many sectors, including the army," he told Nikkei Asia.
Oman is well-regarded among many locals. Sohrabi added that when Gwadar suffered severe power shortages in 2001, Oman's then-ruler, Sultan Qaboos, gave the city 45 power generators.
"This is one instance of the people of Gwadar having a special bond with Oman," Sohrabi said.
The railway investment offer, if it comes to fruition, would significantly ease access to Gwadar and its Chinese-built and operated port, part of the $50 billion China-Pakistan Economic Corridor.
Despite being in the middle of BRI activity in Pakistan, no train lines run to Gwadar, and uncertainty shrouds plans for other railway upgrades under CPEC. Plans call for improving tracks between Peshawar and Karachi, the latter of which is about 600 km from Gwadar. But this project, known as Main Line-1 or ML-1, appears at risk of being shelved due to a disagreement on costs between Islamabad and Beijing, according to local reports in April.
"China wanted ML-1 to have a price tag of $9 billion, which Pakistan reduced to $6.8 billion," an official who deals with the planning of federal projects in Pakistan told Nikkei Asia on condition of anonymity, as he is not authorized to talk to the media.
The official added that Islamabad wants loans at a lower rate than what Beijing is prepared to offer.
Sohrabi stressed that Gwadar can never be a successful major port without a strong railway network.
"Currently, the cargo which is unloaded at Gwadar Port is transported by road to Karachi [and] from there it's shipped to other parts of the country via rail," he said. "If this is the case, then it makes more sense to unload cargo directly at Karachi Port instead of Gwadar."
"Currently, the cargo which is unloaded at Gwadar Port is transported by road to Karachi [and] from there it's shipped to other parts of the country via rail," he said. "If this is the case, then it makes more sense to unload cargo directly at Karachi Port instead of Gwadar."
Some see the Omani offer to develop Gwadar's infrastructure as a quid pro quo effort to support CPEC. China is investing in an industrial park in Oman's Duqm, a port town about 1,000 km south of the Strait of Hormuz, a key shipping lane.
Yet, Oman's Anvwar Asian Investments is not the only one interested in building a railway link for Gwadar.
"A Singaporean company, Pathfinder, has expressed its interest to invest $5 billion to develop a high-speed rail network from Gwadar to Hub," a town in Balochistan, Saeed Ahmed Sarparah, chairman of the Balochistan Board of Investment and Trade, told Nikkei. He added that the Singaporean offer is undergoing an assessment by the federal government.
Neither the Omani company nor the Singaporean one had responded to requests for comment as of publication time.
Some are skeptical about the chances of moving forward with such a high-stakes, long-term endeavor given the persistent political instability in Pakistan. The coalition government of Prime Minister Shehbaz Sharif is locked in a power struggle with the man he replaced, Imran Khan, amid an economic crisis. Khan now faces terrorism charges. And investments in Balochistan, whether by China or a Canadian gold miner, have become targets of separatists.
Aslam Bhootani, a member of the National Assembly representing Gwadar, told Nikkei he was unaware of the rail investment offers as he had "not been taken into confidence yet."
But Bhootani said, "I do not see how Oman and Singaporean companies can benefit from investing in the rail network of Gwadar at such a turbulent time."
Beijing’s Belt and Road investment strategy meets resistance in the developing world it seeks to influence
China is the largest lender to the developing world, mainly through Chinese leader Xi Jinping’s Belt and Road infrastructure program. The country has worked to portray itself as a benevolent partner to the countries where it is spending money, in an attempt to draw a distinction with Western powers.
Still, as its global reach expands, China is increasingly grappling with the consequences of projecting power around the world, including corruption, local resentment, political instability and violence. For developing countries, China offers perhaps the best chance of quickly building major infrastructure.
Beijing accepts a degree of security risk in pursuing its Belt and Road program and is committed to working with partner governments, such as in Pakistan, to mitigate threats to Chinese personnel and assets, Chinese experts say.
“We couldn’t possibly wait until all terror attacks cease before starting new projects,” said Qian Feng, a senior fellow at Tsinghua University’s National Strategy Institute. “We have to keep working, studying the issues, and undertake preventative measures at the same time.”
Chinese businesses and workers in several countries where it is making investments have become favored targets. Chinese nationals are seen as wealthier than most locals and, in some cases, are perceived to be reaping too much of the economic benefits and job opportunities created by Beijing’s investments.
Gunmen in Nigeria abducted four Chinese workers in June during an attack at a mine in the country’s northwest. In October, unidentified “thugs” attacked a Chinese-funded business in Nigeria and killed a Chinese employee there, according to the Chinese consulate in Lagos. The consulate urged Chinese companies to hire private security and fortify their work areas.
In the Democratic Republic of Congo, where Chinese investors dominate the mining industry, Chinese business groups and workers have sounded alarms about armed robberies and kidnappings in recent months. Beijing has urged local authorities to step up security for Chinese assets and personnel.
There were about 440,000 Chinese people working abroad for Chinese contractors in Asia and roughly 93,500 in Africa at the end of last year, according to the China International Contractors Association, a Beijing-based industry group.
The Oxus Society, a Washington-based think tank, counted about 160 incidents of civil unrest in Central Asia between 2018 and mid-2021 where China was the key issue.
Beijing recognizes the rising threat to its workers in developing countries but doesn’t want to send in its army as it professes noninterference abroad, said Alessandro Arduino, author of “China’s Private Army: Protecting the New Silk Road.” Instead, China is deploying technology such as facial recognition and hiring more private Chinese security contractors, he said.
China chose Pakistan—one of its closest allies, with deep military ties and a common rival in India—as a showcase of its investment in developing nations. Beijing has spent about $25 billion here on roads, power plants and a port.
The Pakistan Publishers and Booksellers Association (PPBA) has organised the annual exhibition at the Karachi Expo Centre that is open from 9am to 10pm daily.
Some 40 foreign publishing houses from 17 countries and over 130 noted publishers from Pakistan are participating in the event by setting up 330 book stalls.
According to the event organisers, the annual exhibition serves as a platform to let book publishers and retailers around the world share with each other the latest trends, technological improvements, and innovations introduced to upgrade the publishing industry.
Sindh Education and Culture Minister, Syed Sardar Ali Shah, said such events provided the opportunity to teach the new generation to stay away from violent and gory video games played on smartphones and reconnect with their native culture that stands for peace and security for everyone.
He conceded that the number of book readers had sharply gone down over the last several years due to excessive reliance on digital means of communication but still books play an important role in the lives of coming generations.
He advised the PPBA to organise fairs in other cities including in Hyderabad, Sukkur, Mirpurkhas, and Larkana as the authorities would provide all help in this regard.
The provincial government aims to expand the network of public libraries to small towns and in the first phase the number of libraries was being increased in Karachi.
The retired bureaucrat and former lawmaker, Mehtab Akbar Rashdi, said that the recent pandemic had provided an opportunity for many people in the world to reconnect with the hobby of book reading.
PPBA Chairman, Aziz Khalid, appealed to the government to lessen the duty on paper and also introduce incentives for local paper producers for promoting the Pakistani publishing industry which had been facing a challenging situation due to economic woes.
Haroon Aziz, a first-year college student, said it was an amazing sight for him that the Karachi Expo Centre, which just a month back had hosted an international arms expo was now exhibiting thousands of books under one roof.
He said the books displayed at the expo would be highly helpful in his studies in addition to encouraging him to adopt the reading habit in his leisure time.
Sindh Chief Minister Syed Murad Ali Shah inaugurated the headquarters of Rescue 1122 established in cooperation with the World Bank in Karachi on Friday.
Addressing the ceremony on the occasion, Syed Murad Ali Shah said Rescue 1122 service is already working in Karachi, Larkana, Thatta, Sujawal, Qambar-Shahdadkot and Hyderabad districts and from tomorrow it will also start working in Badin as well.
He said that Rescue 1122 emergency service has been established under World Bank Sindh Resilience Project.
The Chief Minister Sindh said that ambulance service, fire service, urban rescue and search service, water rescue service will be provided in Karachi city under this service.
He said that the rescue service will be started at main roads and highways every after 50 kilometers to ensure provision of immediate services to the people in emergencies in the province.
Sindh Chief Minister Syed Murad Ali Shah inaugurated the service.
The service is aimed at providing immediate medical aid to people and shifting them to hospitals in emergencies.
Initially, fifty ambulances have been provided for the service which will be increased to 230 across the province.
The service will be initiated in other Divisions and districts in the second Phase.
He (Ambassador Non Rong) recalled that under the CPEC, 192,000 jobs were created, 6000MW of electricity was generated, 510 km of highway was constructed and 886 km of transmission was set up, which laid a solid foundation for Pakistan’s socio-economic development. “In fact, Pakistan’s trade surplus of agricultural products is expected to exceed a record high of $1 billion in 2022,” the ambassador said.
The Chinese sources said the ML-1 is the largest infrastructure project of CPEC worth $6.86 billion. The project involves the up-gradation and dualization of ML-1 to increase the operating speed from the current 60 km/h and 105 km/h to a proposed 160 km/h. The project also involves the establishment of a dry port near Havelian. ML-1, the Karachi to Peshawar line, is one of four main railway lines in Pakistan, operated and maintained by Pakistan Railways. The line begins from Karachi City Station or Kiamari station and ends at Peshawar Cantonment Station. The total length of this railway line is 1,687 kilometers. There are 184 railway stations from Kiamari to Peshawar Cantonment on this line. The line serves as the main passenger and freight line of the country. 75 percent of the country’s cargo and passenger traffic uses the ML-1. The existing timeline for the completion of ML-1 extends to December 2024. Under the umbrella of this project, level crossing will be converted into flyovers or underpasses so that the speed can be increased by getting rid of the obstacles.
The project could not be started during the PTI government due to China’s concerns over debt repayment plan, the sources pointed out. ML-I railway line project is very important to achieve connectivity between Gwadar (Pakistan) and Kashgar (China) through a train track that will provide the easiest and safest way to transport oil between China and the Middle East, saving China travel costs. The railway line upgrade will provide faster travel facilities to the people of Pakistan and commercial benefits like bringing raw materials to the Special Economic Zone (SEZ) and faster delivery of finished goods to remote areas of the country as well Gwadar port. Another great benefit is that coal will be delivered for fuel to the power plants through the railway track, which will also generate good revenue for the railways. Due to unnecessary delays, the cost of this historic project has increased. The Imran’s PTI government failed to convince the IMF and the Chinese government to start the project. Another reason for the increase is the recent floods in Pakistan, which has destroyed the railway lines of most parts of the country. As soon as the new government was formed in April, 2022, Pakistan’s Minister for Planning Ahsan Iqbal restarted the discussion with the Chinese authorities on revival of the project.
The revived KCR operation is intended to become an inter-regional public transit system in Karachi, with an aim to connect the city centre with several industrial and commercial districts within the city and the outlying localities. In May 2017, the then government approved Rs27.9 billion ($120 million) restoration package for the KCR. However, delays and disputes with the Sindh provincial government ultimately led to cancellation of the funding. KCR would be constructed with the cost of Rs294 billion and used by 500,000 passengers/day, which would increase to 1 million in later years. KCR will have 250 modern driverless electric bullet trains, which would run 17-hours a day throughout a week. The KCR project would be run by the Sindh government through Karachi Urban Transport Corporation (KUTC) and likely to be completed by 2025.
India’s goal of being a trade hub hit a major snag on January 11, when the world’s biggest boxship, Ever Alot, gave it a miss because of port infrastructural issues. Meanwhile, the economically hit Sri Lanka and the south-east nation Malaysia have been visited by Ever Alot in recent times.
Although the Jawaharlal Nehru Port Trust highlighted that the Mundra Port run by Adani could handle the 24000 TEU ship, Ever Alot decided to skip it over the lack of a 17-meter draft. To berth the 400 meters long ship, such a draft was crucial.
So far, the Mundra Port has handled ships as big as APL Raffles, a 17,292-TEU ship, in January last year. The vessel was carrying 13,159 TEUs onboard at that time.
February 22, 2023
Based out of the NED University of Engineering and Technology, NIC Karachi is funded by Pakistan’s national technology fund, Ignite, and operated by LMKT, a private tech company which runs two other NICs in the cities of Hyderabad and Peshawar.
Atif Khan, the chairman and CEO of LMKT, says the philosophy behind the incubation centres “was not to create unicorns”, but to act as digital skills development centres: “We are training and grooming a lot of talent in the country.”
NIC Karachi has already incubated more than 250 start-ups, such as ride-hailing app Bykea and London-based proptech platform Gridizen. Kamran Mahmood, the CEO of Gridizen, who recently returned to Pakistan to join NIC Karachi, says he has found it even easier to meet decision makers at large companies in Pakistan than the UK.
“[NIC Karachi] is doing an excellent job of internationalising and progressing the start-up scene in the country,” he says. Data Darbar figures show that Karachi-based start-ups attracted $236.7m of funding in 2022, equivalent to two-thirds of Pakistan's total and almost double the previous year. The financial capital is followed by Lahore ($69.2m) and Islamabad ($41.6m).
In July 2022, Pakistan’s fledgling start-up scene was dealt a major blow. Airlift, a fast delivery start-up that had raised $85m barely a year earlier, said it would permanently close operations due to the “devastating impact” of worsening economic conditions.
“This has been an extremely taxing decision that impacts a large set of stakeholders and an emerging technology ecosystem,” Airlift wrote in a statement. Start-up failures are common in more mature markets, and seen as an integral part of the innovation and disruption process. But the collapse of a company hoped to be Pakistan’s first ‘unicorn’, or start-up valued at above $1bn, rattled the country’s nascent tech scene.
Several advisors, investors and entrepreneurs tell fDi that Airlift’s failure has caused Pakistani start-up founders and investors to shift their focus away from pursuing “hyper-growth” to building more “sustainable” business models.
Similar to the caution permeating the global tech and venture capital (VC) industry, start-up funding in Pakistan has dropped considerably. Start-ups in Pakistan raised just over $15m in the final quarter of 2022, the worst volumes since the first quarter of 2020 and 79% lower than the same period a year earlier, according to Data Darbar, which tracks the Pakistani start-up scene.
“Given the global slowdown and Pakistan’s macroeconomic and political challenges, things are tough right now and will likely remain so in 2023,” says Aatif Awan, the founder of early stage venture fund Indus Valley Capital, which is focused on Pakistan and had invested in Airlift.
Several acute challenges currently facing the country — including dwindling foreign exchange reserves, security issues, blackouts and severe flood risks — are causing many young Pakistanis to leave. Despite significant obstacles, those involved in Pakistan’s ecosystem believe that the country’s demographics and rapidly digitalising economy make it an untapped opportunity with potential for long-term growth.
When Shamim Rajani co-founded her software development business Genetech Solutions in Pakistan’s commercial capital Karachi back in 2004, she remembers a “lot of stubbornness” from the government and local corporates towards the IT sector.
“Pakistan wasn’t [even] ready for women CEOs in the tech sector then,” remarks Ms Rajani, adding that she had to look for global clients in countries like the US. “Saying these words today, I don’t even believe it myself.”
These projects entail desalination potable water plant, Gwadar Free Zone North (Phase 11), Gwadar Safe City Project, New Gwadar International Airport, three electricity projects, Gwadar Smart Port City Master Plan, Gwadar Tourism Project, New management model of Pak-China Technical and Vocational Institute (PCT & VI), State of Art Shipyard Project, Oil Refinery project, Green Gwadar Project, Pak-China Friendship Hospital, fisher community projects, Gwadar Port dredging project, Export-oriented projects, Fishing industry, Warehouse industry, and Gwadar Huafa Exhibition and Trading Center.
According to the report, over the last 10 years since CPEC set its foot in 2013, Gwadar outlook is changing gradually and constructively, getting over daunting challenges including poverty, civic issues, water, electricity, employment, infrastructure, agriculture and on top of them blue economy.
In the past Gwadar was in shamble and disarray. Later in the course of 10 years, Gwadar has been making headway toward progress in a sustainable manner.
Many development projects have been completed so far including Gwadar Port, Gwadar Free Zone South (Phase I), Eastbay Expressway, Pak-China Technical and Vocational Institute (PCT & VI), China-Pakistan Gwadar Faqeer Middle School, Fiber Optic, E-Custom system (WeBOC), Plant Tissue Culture Lab & Green House, livestock, women-led garment factory, Gwadar University and GDA-Indus Hospital.
The city’s strategic location at the mouth of the Persian Gulf, coupled with its deep-sea port and modern infrastructure, makes it a hub for trade, transportation, and investment.
As a result, Gwadar is expected to attract a significant amount of foreign investment and economic activity in the coming years, emerging as a major contributor to Pakistan’s economic growth.
One of the most significant projects is the 1.2 Million Gallon Per Day (MGD) de-salination plant, expected to be fully operational by April 2023. This plant will provide a reliable source of clean drinking water to the residents of Gwadar.
In 2023, more than 4 lakhs of people of Gwadar are going to get rid of painful power woes as three electricity projects will power up Gwadar. The first project is about 100 MW Irani electricity from Gabd-Remdan (Pak-Iran border) to Jiwani Grid Station to Gwadar that will come on 1st March.
The second project is another 100 MW from Iran-Pangjur-Turban-Pasni to Gwadar that is going to be completed in current year. The third project is from Quetta, Nag-Besima section to Pangjur and then Turbat-Pasni to Gwadar.
Meanwhile 5 MW power supply will be available to Gwadar Free Zones North (Phase II). If all goes well, in the second step 12 MW power supply will be ensured for Gwadar Free Zone South (phase I) and Gwadar Port in coming months. Finally, the government also approved 300 MW coal-fired power project for Gwadar.
Another major project that is expected to pick more pace in 2023 is the development of the Gwadar Free Zone North (Phase II) spreading over 2,221 acres of land. Currently, export-based Chinese companies are very near building and running their factories in a few months.
The year of 2023 has also brought many fortunes for Gwadar’s fishermen regarding their livelihood to new housing schemes. The Balochistan Government has approved 200 acres of land for new fishermen housing colony for low-income fishmen of Gwadar.
Around Rs300 million has been allocated. Around 3,291 poor fishermen of Gwadar are going to get free of cost boat engines as the government has allocated funds of Rs823 million.
Abu Dhabi’s AD Ports Group has reached an agreement with Pakistan to develop and enhance port projects in the country, after a senior UAE delegation visited Karachi.
Peter Shaw-Smith | May 19, 2023
“The UAE aims to foster economic growth in Pakistan by signing an MoU with the Karachi Port Trust (KPT),” AD Ports Group said. “The MoU paves the way for enhancing bilateral cooperation and increasing efforts in the development, expansion, and digitalisation of port projects within Pakistan.”
AD Ports Group said the collaboration encompasses a wide range of initiatives and projects aimed at enhancing port infrastructure, optimising operational efficiencies, and embracing digitalisation. The group will leverage its technical expertise to conduct feasibility studies and analysis, to ensure commercial success of the project.
Related: AD Ports Group expands dry bulk fleet, moves into tankers
“We aim to leverage our group’s extensive experience and capabilities to transform Karachi Port’s Container Terminal into a premier hub for transshipment as well as imported and exported cargo,” said Captain Mohamed Juma Al Shamisi, CEO and Managing Director of AD Ports Group.
“In line with [the UAE’s] economic diversification, we anticipate that this collaboration will propel Karachi Port towards becoming a global hub of global trade and reinforce its significance as a key player in the trade and maritime industries, further stimulating economic prosperity in the region.”
"This partnership with AD Ports Group is a significant milestone for Karachi Port Trust. By combining our strengths and expertise, we are poised to unlock unprecedented growth opportunities for our port and the wider trade community,” said Syed Syedain Raza Zaidi, Chairman Karachi Port Trust.
“Together, we will work towards transforming Karachi Port into a world-class maritime hub that can effectively meet the demands of the evolving global trade landscape."
AD Ports Group’s move into Pakistan is not the UAE’s first foray into Pakistan. DP World has been operating Qasim International Container Terminal (QICT) for several years.
“The Muhammad Bin Qasim Port Project is the one of the largest port privatisation projects in Pakistan and is a testament to the Government’s commitment to providing the international trade community with a world class port facility supported by the latest technologies and second to none efficiency,” it said.
Qasim International Container Terminal started operations in 1997. “Today the capacity of Terminal 1 and Terminal 2 is 1.38m teu. Over the last 25 years of operations the terminal has grown and now handles more than 650 vessels annually,” DP World said.
Hutchison Ports also operates in the Port of Karachi.