Revealed to Senate panel: Six years on, Gwadar port costs spiral to 100b

Lack of coordination among stakeholders, irregularities, mismanagement inflated the budget.

ISLAMABAD:

The construction cost of the Gwadar deep sea port is likely to reach Rs100 billion, far surpassing its initial price tag of Rs8 billion, the Senate Standing Committee on Ports and Shipping was told on Tuesday.

During a meeting with ministries for ports and shipping, railways, and water and power, the committee was told that absence of coordination between key stakeholders and irregularities and mismanagement in the acquisition of land and machinery contributed to the escalated cost.

The initial cost, Rs8 billion, was formulated nearly six years ago, according to the Gwadar Port Authority chairman, Dostain Khan Jamaldini.

He said a key hurdle in the project’s completion is the water and power ministry’s failure to construct grid stations at the Gwadar port site as well as the railways ministry to acquire land to lay tracks despite the payment of funds to the Balochistan government.

The committee was also told that the Chinese government, a key partner in the project, is reluctant to release funds prior to the provision of basic services such as electricity, communication and road links in the area.

Jamaldini told the committee that there is a need for electricity in order to operate cranes at the site and WAPDA has failed to work at the site to date. “Gwadar city would be in darkness if we start operating cranes at the port without additional electricity,” he said.

He said WAPDA officials have purchased machinery and electricity pylons without following the port’s layout plan, wherein there is a provision only to lay underline electricity and other service wires.

“It seems that the procurement of machinery and poles without considering the layout plan is waste of resources and time,” said Committee Chairman Fatah Mohammad Mohammad Hussaini. He recommended taking action against those responsible for the mismanagement.

Officials from the Planning Commission concurred, saying WAPDA officials have procured the machinery in order to receive kickbacks, leading to a waste of machinery and poles worth millions of rupees.

According to WAPDA officials, they have spent over Rs300 million on this machinery.  The committee has asked WAPDA officials to arrange a meeting next month at the port site to look into the matter.

An official of the National Transmission and Dispatch Company said the company has planned to import electricity from Iran via a 190-km transmission line in order to provide 100MW for the port’s operation. If funds are provided in time, the project will be completed by 2015, he said.

Gwadar Airport

The committee informed that development work on Gwadar airport has commenced, but the Civil Aviation Authority (CAA) has yet to acquire land for connecting roads; the land mafia is also active on this site, the committee was told, and the price of land has increased significantly.

The committee asked the Planning Commission and CAA to take steps to acquire land for these roads.

Railway tracks

The committee was also told that despite a payment of Rs450 million in 2006, the Balochistan government has not handed over 373 acres of land to lay railway tracks at the port in order to link it with the Makran Highway.

Additional General Manager of Infrastructure in the railways ministry, Mohammad Khalid stated that the Balochistan government has demanded Rs943 million in addition to the first payment. The committee chairman referred the issue to the Federal Investigation Agency.

Published in The Express Tribune, March 19^th, 2014.