The success of Gwadar Port could be more a strategic project for China than a commercially viable one, a report by a respected US think tank has said. Given its geographical location, Gwadar may help China cut down the total distance that oil has to travel from the Gulf states to the Chinese heartland, but it would be more expensive than existing shipping methods and comes with the risks of travelling through Pakistan.
The report also identified other major challenges for Gwadar to even glimpse success - availability of basic resources like water, connectivity the larger rail and road network and the profile and quality of services offered at the port.
The report from the Washington-based Center for Strategic and International Studies (CSIS) is titled 'China's Maritime Silk Road Initiative: Economic Drivers and Challenges' says these challenges are not only restricted to Gwadar, but also to other port projects under Chinese President Xi Jinping's pet Belt and Road Initiative (BRI) - Hambantota in Sri Lanka and Kyaukpyu in Myanmar.
"Gwadar's proximity to shipping routes is less optimal than it appears at first glance. It is located at the mouth of the Gulf of Oman… Gwadar is too close to ports of departure to serve as an effective waypoint for ships traveling from the Persian Gulf to China."
"Beijing and Islamabad's longer-term vision for Gwadar includes high-speed rail and road networks that could carry oil from ships arriving at Gwadar to Western China. This would reduce the total distance that oil would travel from the Persian Gulf to China, but increase transportation costs while incurring other risks, namely those associated with traveling through restive western Pakistan," the report read. It said for these reasons that Gwadar could be more about providing berths to Chinese warships than to merchant vessels.
But the larger challenge, the authors of the report concluded were to do with connectivity, infrastructure and services.
"At Gwadar, port facilities have advanced faster than the area's supporting infrastructure… An uptick in shipping traffic at Gwadar, particularly cargo destined for locations elsewhere in Pakistan, would result in serious delays due to the area's limited connectivity… the appeal of building a "game-changing" port in an undeveloped area almost always brings with it broader connectivity challenges, most of which are not captured in the cost of the port itself," the report read.
It also noted that Gwadar faces a crunch in even the most basic of resources. "Importantly, connectivity isn't just limited to transportation. Ample water and power supplies are also critical. Reports also indicate a shortage of basic services at Gwadar, including potable water," the report read.
Not just Gwadar, the report noted that similar problems of connectivity and resources plague the nearby India-backed Chabahar Port in Iran.
The report however did concede to the possibility that Gwadar could turn out successful in the long run. "Maritime trade is a fluid business. Shipping lanes are slow to change, but they are not immune to revision... Individual ports may rise and fall, based not only on their location but also on their ability to compete and provide services," the report concluded.