Poor logistics hinders Gwadar port activity

ISLAMABAD:

The government is struggling to make Gwadar port fully operational due to a lack of transportation infrastructure and higher costs, as no entity is willing to shift imports and exports there.

A government committee was formed to facilitate the plan of diverting 60% of imports and exports from Karachi to Gwadar. However, sources reveal that ministries and entities have failed to comply with the decision due to deficient road and railway connectivity and the absence of oil pipelines.

Despite granting permission to the private sector to export 50,000 metric tons of rice to Bangladesh via Gwadar on behalf of the Trading Corporation of Pakistan (TCP), traders have refused to use the port due to higher transportation costs.

Regarding oil and crude oil transportation, Pakistan State Oil (PSO), the committee was informed that fuel products and crude oil cargo imports require dedicated and specialised port infrastructure, including oil piers, LNG terminals, pipelines, storage facilities, and logistics arrangements.

Regarding oil and crude imports, Pakistan State Oil (PSO) informed the committee that fuel and crude oil cargo require dedicated infrastructure, including oil piers, LNG terminals, pipelines, and storage facilities.

Shifting fuel imports to Gwadar, it noted, would necessitate significant investments and create logistical redundancies at Karachi Port and Port Qasim.

It explained that this would cause logistical challenges due to the lack of cross-country transportation pipelines.

Therefore, a holistic approach must be adopted in consultation with relevant stakeholders, including port authorities, refineries, OMCs, pipeline companies, and transportation entities.

The Ministry of Railways said that inland transport relies heavily on rail connectivity, which is currently only available at Karachi Port. It further informed that various ministries and divisions had submitted 'nil' reports, indicating no progress on shifting trade to Gwadar.

Regarding rice exports, TCP informed that negotiations were underway for the export of 50,000 MT of rice to Bangladesh. Since the exports would be conducted on a CIF + Liner Out basis, the private sector would be responsible for the task on behalf of TCP. TCP has requested the private sector to consider using Gwadar Port for rice exports.

However, increased transportation costs may impact competitiveness against Indian rice in the market.

The government's decision to divert 60% of trade to Gwadar was sent to all Ministries and Divisions for implementation on October 24, 2024.